Area home sales plummet in July | SouthCoastToday.com

Area home sales plummet in July | SouthCoastToday.com

Plunging home sales are creating fresh uncertainty about the health of the housing market both locally and across the nation.

Local sales fell in July, mirroring the national numbers, which dropped to a 15-year low.

In Bristol County, single-family home sales plummeted 28.9 percent in July compared to the same month in 2009, while Plymouth County's sales dropped 25.2 percent, according to a new report released Tuesday by The Warren Group, publisher of Banker & Tradesman.

The most likely explanation is the now-expired $8,000 federal tax credit moved up potential purchases into the spring, said Dan Briand, retail lending manager at Citizens-Union Savings Bank.

"The mortgage rates are terrific, and (potential buyers) certainly have a good inventory of properties to look at that is more fairly priced than they have been in recent years," he said. "But they aren't buying to the degree which you might think. It was kind of surprising how steep this plunge was."

Under the tax credit program, the deadline for signing a purchase-and-sales agreement was April 30.

Briand cautioned the summer months can be a slow time for home buying, and the numbers can fluctuate from month to month. So future data could show July is an aberration, or the latest declines are the beginning of a trend, he said.

The direction of local home prices was mixed. The median price for a single-family home fell 5.4 percent in Bristol County to $233,000, but edged up by less than 1 percent in Plymouth County to $299,000, The Warren Group reported.

Statewide, single-family home sales dropped 26.2 percent in July, ending a 12-month streak of increases. The median price of single-family homes rose 3 percent to $315,000 in July, up from $305,000 a year earlier.

"Buyers aren't entering the market as aggressively as they were earlier this year," said Timothy M. Warren Jr., chief executive officer of The Warren Group, in a statement. "Whether this is a temporary dip due to the rush to qualify for the tax credit, or whether this is a sign of a declining market for the balance of the year is the big question in my mind."

The Massachusetts Association of Realtors came out with its own numbers Tuesday, saying single-family home sales statewide dropped 28 percent. The association also said this was the first time in 12 months that sales fell.
A new national report showed weaker home sales are not unique to this area or the state.

U.S. sales of existing homes dropped 27.2 percent to a seasonally adjusted annual rate of 3.83 million units in July from the previous month. Sales were 25.5 percent below the 5.14 million-unit level in July 2009, according to the National Association of Realtors.

Single-family home sales, which account for most of those transactions, are at the lowest level since May 1995, the trade group reported.

Lawrence Yun, the national association's chief economist, said sluggish sales likely will continue for a few more months.

"Since May, after the deadline, contract signings have been notably lower and a pause period for home sales is likely to last through September," he said in a statement.

"However, given the rock-bottom mortgage interest rates and historically high housing affordability conditions, the pace of a sales recovery could pick up quickly, provided the economy consistently adds jobs."

The average interest rate for 30-year fixed-rate mortgages fell to a record-low 4.57 percent in the first week of August, down from 4.6 percent, according to the Mortgage Bankers Association.

High unemployment is seen as discouraging home purchases, and locally, matters have not improved much on that front either.

The jobless rate in the New Bedford region rose from 12.2 percent in June to 12.7 percent in July, according to new seasonally unadjusted data released Tuesday by the state Executive Office of Labor and Workforce Development. In the city alone, unemployment rose from 14.4 percent in June to 14.9 percent in July.

"Fears about the economy and the job situation in the larger picture are causing some people to be hesitant," Briand said.

Kim Silva, broker/owner of Kim Silva Real Estate, said the tax credit had ignited a fire that fizzled after the program ended. But she said people are out looking for properties, and she is hopeful about the long-term prospects of the housing market.

"It's not as busy as it was with the tax credits, but I'm starting to see it catch on with rates in the low fours," Silva said.