Foreclosure-plagued cities gain sales
For rest of state, June real estate deals hit slowest pace since 1991
June homes sales increased in Massachusetts communities that have been slammed by foreclosures, bucking the statewide trend of declining sales.
Massachusetts sales of single-family houses fell 14.9 percent last month compared with a year ago, Warren Group, a Boston real estate publishing firm, said yesterday. The sales activity - 4,663 transactions were closed - marked the slowest June pace since 1991. The statewide median price declined 8.6 percent, to $329,000, as the housing market continued to deteriorate.
For the first half of the year, sales were down 19.1 percent and prices fell 9.2 percent compared with the first half of 2007. "It's more of the same. It hasn't gotten worse, but it certainly hasn't gotten any better," said Timothy Warren, chief executive of Warren Group.
But a handful of communities that have been hit hardest by foreclosures - notably Brockton and Lowell - saw surprising sales gains last month. Real estate agents said buyers are suddenly eager to purchase houses being sold by banks that seized properties from delinquent borrowers, or through short sales in which the homeowner averts a foreclosure by selling the property and paying the lender an agreed upon amount.
Brockton has experienced one of the state's highest rates of foreclosure, depressing prices throughout the city even for homes not involved in the crisis. Janet Baxter, the Brockton office manager for Jack Conway & Co., said lower prices, combined with the prospect of higher interest rates, triggered the sales spurt. In June, Brockton had 71 sales, up from 41 a year earlier, according to Warren Group. The median house price in Brockton is $187,000 - down 28 percent since June 2007 - and Baxter said some buyers' monthly payments are half what they would have been five years ago.
"The rates are going to go up, and if you're waiting for another price drop, you're going to lose that in the rates," Baxter said.
The same phenomenon is occurring in Lowell, which has commuter rail service, making it attractive to people who work in Boston. Re/Max agent Dennis Page, president of the Northeast Association of Realtors, said there are 400 fewer houses for sale in Lowell this year than two years ago, and interest in some homes is high.
For instance, Page said, one client was outbid in an attempt to buy a four-bedroom house in one of Lowell's nicest neighborhoods, Upper Highlands. He said there were 10 bidders on the property, which was listed for $179,900 and sold two years earlier for $317,000. The owner had become delinquent on a subprime mortgage.
Page said he believes the inventory of foreclosed homes "is stabilizing. It's getting absorbed." But, he added, "It's going to take awhile to work out some of the subprime stuff."
Sales in Worcester, Randolph, and Lynn, which also bore the brunt of the foreclosure crisis, were stable in June compared with a year earlier.
The Massachusetts Association of Realtors, which also released its monthly sales report yesterday, said the number of homes on the market is shrinking. On June 30, there were 50,075 houses listed for sale, down from 54,497 a year ago. There is now an 8.3-month supply of homes for sale, which the association calls "a balanced market."
But many homeowners, responding to weak demand and lower prices, have chosen not to list their homes and wait for prices to rebound, agents said.
Boston metropolitan area sales in June were 15 percent below last year, and the median price dropped 7.6 percent, to $524,950, according to the Greater Boston Association of Realtors.
In Brookline, agent Aliza Dash said buyers don't have a lot of choice. There were just 70 homes on the market at the end of June, compared with 86 last year. She said that explains why sales, according to Warren Group, fell to 20 in June - nine fewer than a year ago. The median price rose to $1.33 million from $1.1 million.
The realtor association's statewide sales figures showed wide variation among regions during the second quarter. While sales were down across the state, they fell just 0.6 percent on Cape Cod, and the median price was down 11.3 percent, to $350,000. The western part of Massachusetts had the biggest decline in sales activity - 20 percent - but the price drop of 4.1 percent, to $210,000, was the lowest of any region. South Shore sales fell 11.9 percent, and the 11.4 percent price drop, to $310,100, was the state's biggest.
Massachusetts condominium sales plunged 28.3 percent in June compared with a year ago. Prices are holding up so far, though analysts believe slumping sales will eventually pull them down. The median price increased 1 percent to $295,000.
Kimberly Blanton can be reached at blanton@globe.com. 