NewsMine — economy — united-states — 2005 — 2005-apr-july — Viewing Item

Massachusetts homes sales plunge 11 percent { June 24 2005 } Original Source Link: (May no longer be active)    http://business.bostonherald.com/businessNews/view.bg?articleid=91340 http://business.bostonherald.com/businessNews/view.bg?articleid=91340 Housing bubble trouble - Mass. home sales plunge 11.1 percent By Jay Fitzgerald and Jerry Kronenberg Friday, June 24, 2005 - Updated: 07:28 AM EST The bubble hasn't burst, but the air may be leaking out. Massachusetts may be finally entering a buyer's market for homes, experts said yesterday after new data showed the volume of single-family house sales plunged in May by the largest amount in nearly three years. About 4,142 single-family homes sold last month, down 11.1 percent compared to the same period last year. It was the second straight month in which the number of year-over-year home sales declined in the Bay State, the Massachusetts Association of Realtors reported. The decline was the sharpest since August 2002, when sales drooped 14.1 percent in year-to-year comparisons. Prices of both homes and condominiums continued to rise last month - by 6.2 percent for single-family dwellings and 4.7 percent for condos. The average price for a home was $359,900 in Massachusetts, while condos were going for a red-hot average of $279,900, an all-time record. But the year-to-year percentage increases in prices were still only in single-digit figures, something that's become rare in Massachusetts in recent years. Maggie Tomkiewicz, president of the Massachusetts Association of Realtors and owner of M. Macdonald Realty, said the figures show prices moderating - though she said it's too soon to tell if that moderation will continue. Karl Case, a Wellesley College economist, said ``people are really getting spooked'' by media talk of a housing bubble. ``People are getting cautious with their bids. So it's partially a self-fulfilling prophecy.'' He said continued low interest rates, a low housing supply and strong demand are keeping the market going. But sooner or later those dynamics are going to change, he said. ``I think it's in part the real McCoy,'' he added of a possible fundamental market shift already underway. ``We're not growing the economy very strongly. But if you mean, `Am I anticipating a big price decline?,' I still don't expect that to happen. I don't think (a) crash . . . is likely.'' While no one can give an accurate answer to the big question - If there is a housing bubble, when will it burst? - MAR did release new data indicating that the state is finally entering a buyer's market. There were about 36,259 homes on the market last month, or a supply of 8.8 months, a figure generally thought to be favorable to buyers, experts said. The Massachusetts housing market seems to be running a slightly different path than the rest of the nation. Sales of previously owned homes fell by 0.7 percent in May across the country, but rising demand pushed prices to an all-time high. The median home sales price increased to $207,000, from $205,000.

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