Saturday, August 6, 2011

MARKET TRENDS: Housing sales remain tentative, report finds

The state’s housing market continued to sputter last month as buyers remained skittish, making it the slowest June for sales since 1991, figures released yesterday showed.

Last month, 4,313 single-family homes were sold, a 23.5 percent drop from the same month last year, according to Warren Group, a Boston company that tracks local real estate. It marked the fifth consecutive month of sales declines in Massachusetts, pushing volume down 20 percent compared with the same period last year, Warren Group said.

Condominium sales also fell, to 1,706, nearly 32 percent below June 2010. For the first six months of the year, condo sales dropped almost 30 percent compared with that period last year, Warren Group said.

The sales slowdown comes as prospective buyers are scared off by the fragile economy and challenged by stringent financing requirements, real estate specialists say. And with interest rates so low for so long - and no sign of them rising - people also don’t feel pressure to make a decision and lock in a mortgage, they say.

“I don’t see the sense of urgency,’’ said Gary Dwyer, owner of Buyer Agents of Boston, which works exclusively with people shopping for a home. “Buyers are concerned about buying too high,’’ he said, while many sellers can’t afford to reduce prices any further.

Last month’s sales drop appears even more dramatic because it is compared with June 2010, when homebuyers were motivated by the federal homebuyers tax credit, which expired in the fall.

Rick Loughlin, president of Coldwell Banker Residential Brokerage New England, based in Waltham, said the absence of the tax credit combined with concerns about the increasingly heated debt-ceiling talks in Washington, D.C., are factors in the ongoing sales slump. “The consumer is extremely cautious right now,’’ Loughlin said. “It trickles down into real estate.’’

Despite poor sales, median prices for single-family homes largely held steady during June, reaching $325,850, a 0.3 percent increase from the same time last year. For the first six months of the year, median prices dipped to $290,000, a 1.7 percent drop from the same period in 2010.

Condo prices did better. The median price increased to $295,000 in June, 4.6 percent more than the same time last year. For the first half of 2011 the median price rose to $268,050, a 3.5 percent increase compared with the same six months last year, according to Warren Group.

In other data released yesterday, the S&P/Case-Shiller Home Price Indices reported that Boston home values increased 2.7 percent in May compared with the month before, the first time home values have improved since last summer. Over the last year, home values, measured by repeat sales, dropped 3.2 percent, the data shows. Nationwide, home values in the 20 cities tracked by Case-Shiller dropped 4.5 percent during the last year.

David M. Blitzer, chairman of the index committee at S&P Indices, said short-term improvements in housing values are largely expected because of increased demand in the summer months. The concern is whether increases will continue once the weather cools, he said.

“We might have a long way to go before we see a real recovery.’’

Jenifer B. McKim Boston Globe July 27, 2011

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