Wednesday, July 26, 2006

Boston’s New Curse?

To say that June was a “rough” month for the Massachusetts real estate market would be an understatement. The numbers are now very obviously bad and surely getting worse.

Having completed spring and now well into summer, June caps three consecutive months of declining sales that have completely enveloped a typically “hot” selling season.

Of course, the market is coming off the historically high “Bubble” run-up in sales and prices that peaked in June 2005, but still, the current trend seems a far cry from the market “stabilization” that the National Association of Realtors would have you believe is occurring.

Locally, it appears that the idea of price correction is gaining some currency even from David Wluka, the President of the Massachusetts Association of Realtors.

“You can’t keep going up forever - at some point you hit the wall” Wluka said. “[sellers] are going to have to face reality and adjust their pricing accordingly,” said Wluka adding “They have to take the longer view of what the house is worth instead of looking back one or two years." Wluka’s prediction for the future, “[prices] will continue to decline until the inventory gets eaten up.”

So far, the only June statistics available are the Massachusetts Association of Realtors numbers. As in past months, the Warren Group will soon release their numbers providing an even more complete view of the market.

Additionaly, be on the lookout for the inflation adjusted charts produced by for an even more accurate "real" view of the current market trend.

Key Statistics for June 2006

  1. Single Family Sales Down 16.6% as compared to June 2005
  2. Single Family Median Price Down 1% as compared to June 2005
  3. Condo Sales Down 14.3% as compared to June 2005
  4. Condo Median Price Down 1.1% as compared to June 2005
  5. Foreclosures “Skyrocketing” Up 66% in just the second quarter of 2006
  6. Single Family average “Days On Market” stands at 111 days in June as compared to 84 days for June 2005
  7. Condo average “Days On Market” stands at 98 days in June as compared to 66 days for June 2005

Key Facts

  1. June marks the third consecutive month of declining sales.
  2. Inventories have now risen for 16 consecutive months.
  3. For June, there was one foreclosure for every 5.2 homes sold.