The sales of Massachusetts single-family homes fell 26 percent in July, reversing a trend of 12 straight months of increases, the Warren Group reported this morning.
Earlier this year, a temporary federal tax credit for buyers helped give the housing market a lift --- thanks largely to the tax credit, June had the highest number of local monthly sales in four years as home buyers scrambled to take advantage of the tax credit before its expiration. But with the tax credit now mostly out of the picture, local sales fell sharply.
"It's disappointing to see such a big drop in sales," Warren Group chief executive Timothy M. Warren Jr said in a statement. "It appears the expiration of the home buyer tax credit hurt sales volume. Buyers aren't entering the market as aggressively as they were earlier this year. Whether this is a temporary dip due to the rush to qualify for the tax credit, or whether this is a sign of a declining market for the balance of the year is the big question in my mind."
(Under the original federal incentive program, first-time home buyers could qualify for tax credits of up to $8,000 and existing home owners who wanted to buy a new home could qualify for credits of up to $6,500. But there were conditions. Buyers had to have signed a sales contract by April 30 and to have completed the sale by June 30. An extension was later approved that pushed back the second deadline. Buyers now have until Sept. 30 to complete their purchases. The extension only allows people who already have signed contracts to finish at the later date, an AP story noted.)
Headquartered in Boston, the Warren Group tracks local real estate activity. The Massachusetts Association of Realtors also issued a separate monthly report on the local housing market this morning. Although it uses a slightly different method to process data than the Warren Group does, the results of the Realtors' report were roughly comparable to those of the Warren Group's.
One bright spot: Prices for single-family homes rose last month. In Massachusetts, the median price of single-family homes climbed 3 percent to $315,000 in July, up from $305,000 a year earlier, the Warren Group said; it was the second straight month of the year that the median price exceeded $300,000.
On a volume basis, 3,668 single-family Massachusetts homes sold in July, down from 4,967 a year earlier, the fewest number of sales in the month of July since 1990, the Warren Group said.
Bay State "condominium sales also dropped in July, decreasing 32 percent from a year earlier," the Warren Group said in its report. "A total of 1,484 condos sold in July, down from 2,185 a year ago."
The median selling price for a Massachusetts condo was $285,000 last month, up 2.7 percent from $277,500 a year earlier, the Warren Group said.
The report from the Massachusetts Association of Realtors included a statement from association president Kevin Sears.
“It is obvious at this point that the momentum from the tax credit has not been sustained through the middle of the summer,” Sears said. “While the market conditions still favor the buyer - with historically low interest rates, increasing inventory, and more affordable pricing- we may have to wait until the natural supply of buyers builds back up.”
To see the latest Warren Group data on single-family homes, please click here.
To read a press release from the Massachusetts Association of Realtors on July sales figures, please click here.
Boston Globe August 24, 2010