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Latest Bay State home sales numbers are brutal Ė but they donít tell the full picture

Posted by Scott Van Voorhis March 29, 2011 06:43 AM

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Single-family home sales posted a 12.5 percent year-over-year decline in February, according to the Massachusetts Association of Realtors.

The Warren Group, publisher of Banker & Tradesman, points to an even steeper plunge - 15.7 percent - calling it the worst February since it began tracking local home sales in 1987.

Yet all real estate is local and often micro local. Even as home sales plunge across the state, in the more coveted towns near or within the 128 belt, half decent homes are sparking bidding wars.

Lexington and to some extent Burlington come to mind - I've heard my share of complaints of homes already under agreement before the open house has even ended.

I am not pointing to this a sign for optimism - far from it. This price inflation is as serious, or maybe an even more serious long-term problem, than the big decline in prices we are seeing in many other towns and communities across the state.

The bubble may have deflated a bit along 128 and in the inner suburbs, but it has yet to burst outright.

But statewide, it's not price inflation but deflation that appears to be gathering steam.

MAR, in its press release, points to a winter of epic snowfalls as one reason for the decline. It also notes that early 2010 saw an uptick in sales driven by the since deceased home buyer tax credit.

The second point is right on the mark, though maybe not quite in the way the real estate group intended it.

Stripped of a major government subsidy, the real estate market is finally heading towards the bottom, though how low it will sink before it hits remains to be seen.

Anyway, a couple other numbers stick out.

Prices are down again - MAR contends prices fell just .7 percent to a median of $270,000. The Warren Group points to a more substantial decline.

And despite the quick sales seen within the 128 belt, overall, homes are sitting on the market longer than ever.

Statewide, both homes and condos are on the market for an average of five months before selling.

For single-family homes, that's up from an average 137 days - or 4 Ĺ months - back in February 2010.

There's certainly a lot to argue over here. What's your take?


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About boston real estate now
Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

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