Home sales, prices mostly fall in Northeast

Homes sales tumbled in most big Northeastern cities last month - with only Passaic, N.J., showing a healthy jump in activity - while sales of distressed properties dragged down median prices in the entire region, according to two reports released Monday.

Sales of existing homes in the Northeast declined nearly 12 percent in July from a year ago, the National Association of Realtors said. The median price in the Northeast was $278,700, down almost 5 percent from July 2007.

That reflected the national trend: sales dropped more than 13 percent year-over-year, while the median price decreased 7.1 percent to $212,000.

But the Associated Press-Re/Max Monthly Housing Report, also released Monday, showed July sales dropped by at least 20 percent in five of the nine Northeast cities tracked. The report analyzed home sales recorded by all real estate agents in those cities, regardless of company affiliation.

In the one bright spot, Passaic, sales jumped 38 percent over July last year. But the rapid sales pace could be stymied by glut of properties coming onto the market. The supply of unsold homes grew 32 percent to 10.6 months, and the median price slid 6 percent to $400,000.

In contrast, Pittsburgh posted the worst sales decline at 31 percent from July 2007. But prices offered a sliver of hope, dipping less than 1 percent to $132,000, the smallest drop in the region.

In Boston, the supply of homes for sale declined markedly, signaling a possible turnaround in the offing. Judy Moore, a local agent with Re/Max Landmark, said the condo market already is showing signs of life.

Overall, Boston home sales fell 12 percent in July and the median price decreased 8 percent to $355,000, according to the AP-Re/Max report. While Moore expects August sales and prices to decline year-over-year, she thinks the drop in both will be less severe than July's.

"It's been fits and starts, but there's always some activity going on," Moore said.

Philadelphia real estate agent Ellen Renish of Continental Realty said the sales pace has improved over the last several months there, though in July were still 20 percent below July last year.

"We're seeing sold signs instead of for-sale signs," Renish said. "We've even seen several properties in the past month that have had multiple offers." She's optimistic about August sales.

But inventory remains high here, up about 6 percent from last year, or a 10 month supply, including homes in or close to foreclosure.

Foreclosures are also leaving their mark in Providence, R.I. Nearly one of five sales in the area were distressed sales, said Ron Phipps of Phipps Realty in Warwick, R.I. The discounted properties are weighing down the market, where the median price fell by 13 percent last month to $234,900, the AP-Re/Max report showed. Sales there also slipped 9 percent in July.

"A lot of sellers are nostalgic for what was, so they're disengaging from the market," Phipps said. The supply of unsold homes shrank nearly 3 percent in July as a result.
Don Plourde, a real estate agent in Waterville, Maine, doesn't expect sales in the state capital of Augusta to turn around until at least next spring. Home sales fell almost 21 percent in July while the median home price lost 10 percent to $149,000.

Buyers are worrying about fuel oil, Plourde said, and out-of-state buyers are sparse this year, hurting sales of higher end homes.

"Maybe they're going to Florida for all the good buys down there," Plourde said with a chuckle.

Foreclosures and short sales - where the bank accepts less than the value of the mortgage - also are adding to inventory. Maine foreclosure filings more than doubled in July from the previous year.

Brenda Perry, 49, bought a one-story ranch home in a short sale at the end of July in a suburb of Augusta. Perry, a development officer at a nonprofit, wanted to move closer to her job. She declined to say how much she paid for it, but said she bought it for less than the $119,900 asking price.

"(Foreclosures) are coming onto the market faster than you could keep up with them," Perry said. "It's an excellent time to buy. There are plenty of houses on the market, plenty to choose from."