Mass. home sales tumble 25% over year
But May’s average price tops $300,000
Massachusetts home prices rose modestly last month, but real estate specialists say buyers’ willingness to spend a little more was overshadowed by a 25 percent decrease in sales.
Warren Group, a Boston company that tracks local real estate and publishes Banker & Tradesman, reported that the number of single-family homes sold last month dropped by more than a thousand compared with May 2010, from 4,375 to 3,263. But monthly sales topped 3,000 for the first time in 2011, and the average price of a single-family home increased by 3.4 percent, to $304,000 from $294,000 in May 2010, according to Warren Group. That’s the highest average price since August.
“There’s a lot for sale and there isn’t a whole hell of a lot being sold,’’ said Alex Coon, the Boston manager of Redfin, an online real estate brokerage.
Coon said the latest numbers suggest that people are buying more expensive homes than last year, but there’s a disconnect between the prices sellers need to get and what prospective buyers want to pay.
“All of this inventory is sitting out there not because a bunch of people are being greedy, but because they can’t take less for it,’’ Coon said.
Trisha McCarthy, a broker with Keller Williams in Newburyport and president-elect of the Massachusetts Association of Realtors, said many potential buyers are discouraged by the mortgage application process, which has become even more trying since the economic downturn.
“Mortgages are difficult,’’ McCarthy said. “But even if buyers are stepping up to the plate, they’re hesitating to pull the trigger.’’
Vincent Valvo, editor in chief of Banker & Tradesman, said more homes were sold last May because of one major reason — in 2010, people could still take advantage of the federal credit for first-time home buyers, which was aimed at helping to revive the economy.
“It turns out when you give people $8k to buy a house, they’ll take it,’’ Valvo said of the incentive. “We don’t have that this year, and therefore we don’t have a lot of people in the market this year.’’
Real estate specialists were especially troubled to see that the region’s housing inventory ballooned during the spring, traditionally a prime sales season, despite continued low mortgage loan interest rates.
After April and May’s sluggish reports, Coon said, he’s hoping June housing figures will show marked improvement. “If that doesn’t happen, we’ve not had a true spring or summer market and that will be the first time we haven’t had that in a long time,’’ he said.
Valvo said he expects to see a slight increase in home sales later this summer, but that it won’t signal a turnaround in the market. He’s predicting that 2011 will end up being even worse than 2009 for the Massachusetts real estate market.
“It means that if you’re a buyer, you’re in a fantastic negotiating position,’’ he said. “If you’re a seller, you have to listen very carefully to reasonable advice from your real estate agent.’’
The S&P/Case-Shiller Home Price Indices — which measure repeat home sales nationwide — also released new data yesterday. Case-Shiller showed that home values in April moved higher in many of the nation’s largest cities, but there was a slight drop — two-tenths of 1 percent — in the Boston market.
Taryn Luna can be reached at email@example.com.