The real estate slowdown along the East Coast continued in August, as markets in Virginia and Massachusetts endured plummeting sales and sinking prices, according to Realtor associations in both states.
In Virginia, August home sales fell for the 12th consecutive month, as prices dipped from a year ago, the Virginia Association of Realtors reported.
Statewide, closed sales were off 24 percent for August compared to a year ago. Last month, 11,044 closings were recorded, down from 14,658 for the same month last year.
Among the areas that actually showed increases in closed transactions for the month included Charlottesville, the Eastern Shore, Lexington/Buena Vista, Williamsburg, Greater Augusta, Chesapeake Bay & Rivers, and Southwest Virginia.
In August, 9,745 homes were placed on the market, a 25 percent decrease from 12,744 in August 2005. Despite the drop in new listings, the average number of days on the market in August increased to 102 from 87 a year ago.
Virginia’s median existing-home price for August was $194,200, about 3 percent less than last year’s $202,175. The median is a typical market price where half of the homes sold for more and half sold for less.
In Massachusetts, sales of single-family homes and condominiums declined in Massachusetts for a fifth consecutive month in August compared to the same period a year ago, while downward pressure continued to be applied to selling prices due to softening demand and a steady gain in the supply of unsold homes, according to data issued by the Massachusetts Association of Realtors.
In the detached single-family home market, sales fell 21.6 percent, from 5,395 homes sold in August 2005 to 4,229 this August. Last month’s sales total is the lowest August home sales volume in more than a decade, dating back to August 1995 when 4,107 homes were sold.
Additionally, condo sales decreased 18.5 percent in the past year, declining from an August record of 2,579 units sold last year to 2,103 this August. The August 2006 sales volume is the third highest on record for any August in state history, topped only by the 2,579 condos sold last August and the 2,338 units sold in August 2004.
“After several years of peak activity, we’re continuing to settle back toward a more normal and sustainable sales pace,” said MAR President David Wluka, of Wluka Real Estate in Sharon. “The market has lost some steam simply because many buyers are waiting to see if prices will go lower, while sellers have been reluctant to adjust prices and, in many instances, are choosing to delay their home search until they have been able to reach agreement on the sale of their own home.”
The number of residential listings rose 20 percent over the past 12 months, from 53,877 homes and condos on the market in August 2005 to 64,735 homes and condos for sale this past August. Meanwhile, the listing time for detached single-family homes has climbed by more than one full month, from an average of 77 days on the market last August to 109 days for homes sold in August 2006. Similarly, in the condominium market, the average listing time rose from 77 days on the market in August 2005 to 108 days for units put under agreement this August.
Across Massachusetts, the median selling price for detached single-family homes declined 6.1 percent in August, from a record high median of $375,000 in August 2005 to $352,000 last month. It’s the largest annual price decline since January 1993 when prices fell 9 percent from the same month one year earlier. Separately, in the condo market, the median selling price slid 3.3 percent in the past year, from $287,500 last August to $278,000 in August 2006, but rose modestly over the July median price of $276,000.
“We’re now in the midst of the strongest buyer’s market since the late ’90s,” Wluka noted. “Up until the last several weeks there’s been little reason to act with a sense of urgency, but with mortgage rates back below 7 percent, sellers more readily willing to adjust prices, and inventory still plentiful, buyers would do well to jump in the market and negotiate hard.”