Bay State home prices still sliding

July house prices in the Boston area suffered the largest decline since the current housing market downturn began two years ago, while statewide prices had the biggest drop since 1987.

The median price in the Boston metropolitan area fell 8.2 percent last month compared with a year ago, to $484,750, according the Greater Boston Association of Realtors, which released its report yesterday on the housing market roughly inside of Route 128.

For Massachusetts, the median price for single-family houses plunged 12.3 percent in July, to $320,000, Warren Group, a Boston real estate publishing firm, also said yesterday.

"I don't know if the prices are going to keep going down, but I don't think they're going to start going up, not for another six months or more," said Timothy Warren, chief executive of Warren Group.

In Boston, July's fall in prices marked a second month in which price drops were around 8 percent, exceeding the declines posted in the first five months of the year. The Boston-area housing market had been holding up better than the rest of the state, but the drops mean prices are weakening further in the area, an indication the downturn here has yet to hit bottom.

The median price for a single-family house declined to $484,750, from $528,125 in July 2007.

"That's certainly the largest [decline] we've seen in the current downturn," said John Dulczewski, executive director of the Greater Boston Association of Realtors.

Dulczewski said that as the number of foreclosures increases, more of those sales are being handled by agents, causing overall prices to decline. There is also evidence sellers are trying to spark sales by reducing their listing prices, he said.

The real estate association's data come from listings by agents, while Warren Group collects its data from the courts.

Nancy Richards, a Coldwell Banker agent in the Boston suburb of Belmont, said more deals are falling through because prospective buyers concerned about paying too much are skittish. In July, she said, two of her deals fell through, though one of the houses sold later - at a lower price. Financing continues to be difficult to obtain, she said.

"If it's a solid market, people don't duck out of deals," Richards said. She predicted the fall market would improve, because buyers looking for deals are also "getting quite anxious about finding their house."

In a separate report on the state's housing market, the Massachusetts Association of Realtors said yesterday the state's median price declined 10.7 percent, and single-family sales were 10 percent slower last month.

But there is a bright side to the data: The drop in sales activity is losing steam.

According to Warren Group, there was a 6.4 percent decline in the number of single-family house sales closed in Massachusetts in July - breaking a trend all year of double-digit declines. The fall in condo sales - 12.5 percent - was also less dramatic. The state's median condo price dropped 2.5 percent to $287,750.

Kimberly Blanton can be reached at blanton@globe.com.