Home sales in Massachusetts plummeted by more than 25 percent over May in comparison with rates from the same month last year, while home prices shot up, interrupting five months of southerly numbers, according to a report by ""The Warren Group"":http://www.thewarrengroup.com/portal/Home/tabid/116/Default.aspx.[IMAGE]
""It's been a tough start to the year as we've been comparing sales volume against the height of the home-buyer tax credit,"" Timothy Warren, CEO of ""The Warren Group"":http://www.thewarrengroup.com/portal/Home/tabid/116/Default.aspx, said in a statement. ""However, lending standards have also become more stringent, which is slowing the recovery in the real estate market. I expect that in the second half of the year comparisons with 2010 will turn positive.""
The report held that 3,263 single-family homes left the market last month, representing a decline from 4,375 sales in May the previous year. The numbers join a straight four-month decline in year-over-year sales, while this month marked the first time more than 3,000 statewide sales occurred in Massachusetts.
Vincent Valvo, group publisher at ""The Warren Group"":http://www.thewarrengroup.com/portal/Home/tabid/116/Default.aspx, offered the same take as Warren, attributing last year's bump in home sales to the federal home-buyer tax credit. He said that the tax credit, worth $8,000, put ""a lot of money"" into the hands of Massachusetts home-buyers.
""You had an awful lot of folks closing because they had a lot of money in their hands,"" Valvo said, going on to predict a decline in sales over the next three to four months with a possible increase over last year.[COLUMN_BREAK]
Contrasting weak sales, the average price for single-family homes jumped from $294,000 to $304,000 this year, reflecting the highest rate since August. May figures for sales declined to 12,731 from 15,683 the previous year, with year-to-date home sales dropping by almost 19 percent.
The report documented downward figures from January through May, settling at $279,300 from $285,000, the final tally in 2010. Also in May, condominium sales declined even further in Massachusetts, dropping 38 percent from the same period in 2010. Average condo prices rose by 13 percent in May this year, alongside a $290,964 median selling price.
""The increase in prices is surprising to me and a hopeful sign,"" Warren said. ""Perhaps buyers are back in the game and competing for deals.""
The report by ""The Warren Group"":http://www.thewarrengroup.com/portal/Home/tabid/116/Default.aspx arrives amid a flurry of other reports that chronicle weak trends among home sales, with the ""National Association of Realtors"":http://www.realtor.org/ recording a dip in month-over-month sales by 3.8 percent, the lowest since November last year.
Valvo credited mortgage lenders with the pale showing in home sales, citing lenders ""who have tightened up on their underwriting."" He also tied low sales to still-high unemployment and brittle consumer confidence, problems the ""Federal Reserve"":http://www.federalreserve.gov/ highlighted in its Beige Report in June.
""You've got unemployment rates which, despite some improvement, remain at dramatic highs,"" he said. ""You've got consumer levels that are not really way up there.""
Valvo added that tighter interest rates moving forward will ""depress people [from] going back into the market,"" keeping southerly trends for sales from rising in the Bay State.
According to its Web site, ""The Warren Group"":http://www.thewarrengroup.com/portal/Home/tabid/116/Default.aspx, publisher of the _Banker & Tradesman_, specializes in real estate news, research, and information.