House sales battered again in January
Condominium deals hit lowest point in 17 years
Each new blow to the economy and the nation's financial system is exacerbating Massachusetts' already struggling real estate market.
The median single-family home price in the state plunged 20.2 percent in January, compared with the same period a year earlier. And the number of sold properties dropped 10 percent, reflecting the fallout from the worsening conditions of the country's top banks, the stock market, and the employment outlook in the weeks before.
New data released by Warren Group showed that last month had the fewest number of houses purchased in a January for at least two decades - just 1,908 single-family homes. The median sale price for single-family homes fell to $259,250 from $325,000 in January 2008. It was the lowest median price since March 2002.
Condominium sales also hit a 17-year low in January - just 806 condo sales statewide, a 29 percent decrease from January 2008, according to Warren Group, a real estate tracking compa ny. The median condo price dropped 22.2 percent to $209,900 in January from a year earlier.
Karl Case, a professor of economics at Wellesley College, said where the sagging house market once contributed to the economy's problems, it is now being affected by them.
"It started with housing and it spread to the rest of the economy and now it's feeding back," said Case, a cofounder of the S&P/Case-Shiller home price index. "We are all in a pretty miserable mood."
Boston area homeowners can take some solace, however, in the fact the situation is far worse elsewhere.
The S&P/Case-Shiller index shows Boston housing prices dropped 1.3 percent in December, from the month before - the smallest price drop of any of the 20 cities monitored by the national index. Since the housing peak in September 2005, home values have fallen about 16 percent in Boston, while places such as Miami and Las Vegas have dropped 40 percent or more, Case said.
Housing prices fell about 15 percent during the state's last housing crisis in the early 1990s, Case said.
The four-year slide in housing prices, very low mortgage rates, and a new $8,000 federal tax credit has put buyers in the driver's seat, said Massachusetts Association of Realtors president Gary Rogers, a broker at Re/Max First Realty in Waltham.
"Affordability has improved in Massachusetts, so even when sellers accept a more modest price for their homes, they find their next home to be much more affordable," Rogers said.
Jenifer McKim can be reached at firstname.lastname@example.org.