A total of 12,439 detached single-family homes were sold in the second quarter of 2006 in Massachusetts, a 10.6 percent decrease from second-quarter 2005, the Massachusetts Association of Realtors reported, marking the fifth straight quarter that sales have declined from the same quarter in the previous year.
The statewide median price of single-family detached homes shrunk for the second straight quarter on a year-over-year basis.
Sales of condominiums declined in the second quarter to 6,185 units, an 8.9 percent drop compared to second-quarter 2005 sales.
“Although we saw less activity this spring than in the prior two years, the volume of sales remains quite strong,” said association president David Wluka of Wluka Real Estate in Sharon, Mass. “Sales may be down, but the market is far from dead.”
The second quarter was the third-busiest second quarter on record for the state’s housing market, the association also noted, surpassed by the 20,708 homes and condominiums sold in second-quarter 2005 and the 20,529 properties sold in second-quarter 2004.
Wluka stated, “Between rising mortgage rates and higher energy prices, as well as the wet, damp spring and dismal income and job growth locally, there has been little incentive to rush out and buy in recent months. Today’s buyers can be more patient than those in past years when inventory was tight.”
Sales of detached single-family homes declined in all areas of the state in the second quarter except Western Massachusetts, where sales rose 0.5 percent compared to sales in second-quarter 2005.
Sales fell 4.6 percent in greater Boston in the second quarter compared to second-quarter 2005, declined 13-14 percent in the Northeast region, South Shore and Southeastern areas, and decreased 15-18 percent in Barnstable and Worcester counties.
Most regions also reported a drop in condo sales over the past year, though there was sales growth of 2.2 percent in the Central region and a 26.9 percent increase in sales in the South Coast communities that comprise the Greater Fall River-New Bedford area, the association reported. Sales fell 3.2 percent in Western Massachusetts, 6-8 percent along the South Shore and in greater Boston, and dropped 33.9 percent on Cape Cod.
The number of single-family properties for sale across the state reached a new all-time high, the association reported. Over the past year, the inventory of detached homes and condos on the market rose by 27 percent, from a monthly average of 49,931 listings in second-quarter 2005 to 63,433 in the same quarter this year. At the current sales pace, this represents 10.2 months of supply, up from 7.2 months of supply in the second quarter a year ago.
Wluka said, “Many sellers have been reluctant to adjust their price to mirror the market, and that’s created a bit of a stalemate and led to longer listing times for homes.”
The time it takes to sell residential property in the Bay State has risen an average of three to four weeks in the past year. This spring, detached single-family homes were on the market an average of 120 days before selling, compared with 95 days for homes sold from April-June 2005. Similarly, the market time for condominiums increased from an average of 81 days in the second quarter last year to 112 days for units placed under agreement in the comparable quarter this year, according to the report.
Despite a more plentiful supply of homes for sale, properties priced right are moving relatively quickly, note MAR officials. “Pricing is critical in today’s market. Sellers who over-estimate the value of their home risk limiting the pool of buyers who can afford it, and the longer a property is on the market the more difficult it becomes to sell,” Wluka remarked.
The statewide median selling price for detached single-family homes decreased 1.3 percent in the second quarter, falling from $364,900 in second-quarter 2005 to $360,000 in the same quarter this year. It’s the second consecutive quarter the median selling price has declined on an annualized basis, and reflects a price drop of 2.7 percent from the all-time high quarterly median of $370,000 set in the 2005 third quarter, the association reported.
Meanwhile, in the condominium market, the statewide median selling price remained flat over the past 12 months at $280,000, which marks the first time in 30 quarters that the median price for condos has not risen on a year-to-year basis.
On a regional basis, median selling prices for single-family homes decreased in two areas of the state — Worcester County and the South Shore. Median prices were flat in greater Boston and the Northeast region, and rose 2-5 percent on Cape Cod, the South Coast and in Western Massachusetts, the association reported.
The median selling price for condos also rose in much of the state over the past year, though prices declined in Central Massachusetts, Greater Boston and the South Shore area.
The average rate for a 30-fixed rate mortgage in the state hit 6.8 percent in the second quarter, up nearly one point from 5.91 percent in the second quarter last year and reached the highest level since second-quarter 2002 when the average rate for a 30-year fixed mortgage was 6.95 percent.
Sales and price data from the MAR report reflects transactions occurring through Realtor-affiliated multiple listing services in the Commonwealth, and account for about 80 percent of all real estate sales in Massachusetts.
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