Housing has its worst monthly price drop in 20 years
The Massachusetts housing market experienced its worst monthly price drop in more than 20 years as concerns over the slumping US economy and the stock market worried consumers, the Warren Group reported today.
"The November median home price slumped 16.7 percent to $275,000 from $330,000 during the same month in 2007," said the Warren Group, a Boston firm that tracks local real estate activity and that publishes Banker & Tradesman. "November’s percentage decline exceeds the monthly price drops in September and October, when median home prices were down 15.3 percent and 13.9 percent, respectively."
In a press release, the Warren Group also noted that the number of single-family home sales in Massachusetts fell 18.4 percent in November on a year-to-year basis, after climbing for two consecutive months.
Single-family home sales fell to 2,620 from 3,211 in November 2007, the slowest home-sales pace for the month of November since the Warren Group started collecting real estate statistics more than 20 years ago, the firm said.
The condominium market, which experienced more moderate sales declines in September and October, had double-digit percentage declines in sales and prices in November.
"Sales sank 27.5 percent to 1,204 from 1,660 in November 2007," said the Warren Group, which added that the median condo price dropped 12 percent to $240,000 in November from $272,700 a year ago, the biggest price decline in monthly median condo prices on a year-over-year basis since January 1992.
Warren Group chief executive Timothy Warren said in a statement: “The slow sales volume in November reflects what was happening in the late summer and early fall when most of these sales transactions were being negotiated. Fear and panic gripped consumers as the stock market tanked and financial firms and other companies reported heavy losses which caused many would-be homebuyers to pull back. A similar sales picture is likely to emerge in the next two months, which means the price declines we’ve been seeing won’t level off for quite some time.”
Earlier in the day, the Massachusetts Association of Realtors issued its own monthly report on the local housing market. The two groups use slightly different methods to collect and analyze data.
The number of single-family homes sold in Massachusetts last month dropped sharply as the November median selling price for a single-family home clocked in at $283,000, down 14.2 percent from $330,000 in November 2007 and down 4 percent from $294,900 in October 2008, the Massachusetts Association of Realtors said today.
The number of single-family homes sold in Massachusetts had increased in September and October, prompting hopes that the hard hit housing market might be showing some signs of recovery. The theory was that prices had fallen to the point where they had become more affordable for bargain hunters.
While a drop in the November sales volume would seem to dampen those hopes, the realtors association cautioned that sales traditionally go down from October to November in Massachusetts.
For November, 2,339 single-family homes were sold in Massachusetts, down 21.8 percent from 2,991 sold in November 2007, the Massachusetts Association of Realtors said.
As for condominiums, 906 units sold in November, a drop of 27.3 percent from November 2007, the association said.
The November median selling price for a Massachusetts condo was $250,000, down 9.1 percent from $275,000 in November 2007 and flat with a median of $250,000 for October 2008, the association said.
“While prices still continue to be affordable, the uncertainty created by the September financial crisis on Wall Street caused many would-be-buyers to once again stay out of the housing market,” Susan R. Renfrew, the association's president, said in a statement. “We need a vibrant housing market to help get the economy moving and the recent steps by the Federal Reserve to reduce interest rates combined with affordable home prices are the type of action we need.”
(By Chris Reidy, Globe staff)