UNCHECKED DEMAND:

Mass. home prices fall in September: Decline is the first monthly drop since February as sales slow (Kimberly Blanton, October 26, 2005, Boston Globe)

The median price of a single-family house dropped for the first time in seven months as the pace of home sales weakened across Massachusetts in September, according to the monthly market report yesterday from the Massachusetts Association of Realtors.

The median selling price for a single-family house was $360,000 in September, down 4 percent from $375,000 in August. That was the first monthly price drop since February, though prices were still higher than they were a year ago. The number of single-family home sales that closed in September was 4,464, roughly equal to year-ago sales.

In the state's growing condominium market, the median sale price also declined, by 6.1 percent, to $270,000 in September from $287,500 in August. But strong sales continued: Buyers purchased 22 percent more condos than a year ago, a much stronger year-over-year increase than in recent months. Year-over-year comparisons of home sales are more valid than month-to-month numbers, real estate analysts say, because sales volume is highly dependent on weather and other seasonal factors.

A fall in housing prices comes at a time when real estate agents, especially in the suburbs, are increasingly reporting that clients who are reluctant to reduce their asking prices are not able to sell their homes in a softening market in which the number of houses on the market has spiked.

Same or higher sales. Slightly lower high price. That's not what bursting bubbles look like.

Posted by Orrin Judd at October 26, 2005 9:29 AM