Massachusetts Housing Market Ends 2007 Year Down

January 28, 2008 - Massachusetts single-family home sales fell 23.3 percent in December on a year-to-year basis, and the median price of a single-family home sold in December saw the largest drop all year, falling 10.5 percent to $276,568, the Warren Group reported today.

A Boston-based provider of real estate data, the Warren Group issued one of two reports out today on the Massachusetts housing market, with numbers covering both activity in December and for all of 2007; the Massachusetts Association of Realtors also issued a report on the Bay State housing market.

During December, sales continued the sharp decline that has been evident in every month since September, with sales falling from 4,074 in December 2006 to 3,123 in December 2007, the Warren Group said.

During December, condo sales were down 27 percent from 2,365 in December 2006 to 1,727 in December 2007, and the December 2007 median price for a condo declined 8.5 percent from $271,000 in December 2006 to $247,900, the Warren Group said.

Because of the rapidly rising rate of foreclosures, the Warren Group has opted to also calculate data that excludes the effects of foreclosures deeds; using this method, the median price of single-family homes in in December was down 5.6 percent from $320,000 in December 2006 to $302,000.

When the effect of foreclosure deeds is eliminated, the December 2007 condo price declined 4.7 percent from $275,000 to $262,000, the Warren Group said.

“2007 started with a surprising bang – a 5.8 percent increase in single-family home sales in January – but it has ended on a much more dismal note,” Timothy Warren Jr., chief executive of the Warren Group, said in a statement. “The large drop in sales and median prices in December signal more woes ahead, and it remains to be seen when Massachusetts will pull out of this slump. Indeed, when you look at month-by-month numbers, it seems to be getting a little worse.”

Meanwhile, in a separate report that uses a different methodology, the Massachusetts Association of Realtors said there were 2,532 single-family homes sold in the state during December 2007, a 20 percent decrease compared to the year before when 3,166 homes sold in December 2006.

In December 2007, the median selling price for single-family homes was $323,000, a decrease of 3.6 percent compared with $335,000 in December 2006, the association said.

The state’s condominium market experienced a large decrease in the number of units sold this December, with a 28.3 percent drop compared with December 2006 - from 1,544 units sold in 2006 to 1,107 units sold in 2007, the association said.

The median selling price of a condo in December 2007 was $270,000, unchanged from December 2006, the association said.

“There is no question that 2007 was a challenging year for the real estate market for many reasons, yet people continued to buy and sell homes on a daily basis, contributing $25.7 billion to the Massachusetts economy,” said association president Susan M. Renfrew said in a statement. “When you take a step back and look at the year in historical context, it was actually pretty good. In fact, it was the eighth best year on record for sales, and median residential prices remained essentially unchanged.”

Mass. housing market ends year on down note
By Chris Reidy | Boston Globe