Posted by Aglaia Pikounis

Home prices on Nantucket, a popular summer playground for the rich and famous, have more than doubled since 2000. The median selling price for a single-family home has exceeded $1 million since 2004.

Realtors will tell you that the island’s real estate market is largely driven by affluent second-home buyers, who unlike most other homeowners don’t have to sell their property unless they get the asking price they want.

So while sales dropped for three years in a row, prices didn’t budge. But 2008 broke that trend.

It seems as the value of the stock portfolios plummeted, bonuses disappeared and high-paying jobs evaporated, some of these wealthy homeowners started to get nervous. The median home price fell 7 percent to $1.57 million from $1.69 million in 2007. It was the first time that prices dropped since 2002, according to The Warren Group. Some long-time real estate professional are predicting that 2009 could bring more grim news for property values on the island.  

Posted by Aglaia Pikounis

The Warren Group reported this week that the median price for a single-family home in Massachusetts fell a whopping 11.5 percent to $305,000 last year. The median price now stands at what it was in 2003, and it’s $50,000 lower than when prices peaked in 2005.

The price drop is tied in part to foreclosure activity, which has dumped bank-owned properties onto the market. Some lending institutions are desperately trying to get these properties off their books. Statewide, about 6 to 7 percent of the single-family home sales were of so-called REOs (real estate-owned properties).

But in some communities, as much as a quarter or more of the sales transactions involved a bank or lending institution. In Hyannis, about 26 percent of the homes sold last year were owned by a lender. In Brockton, a city that had 545 foreclosures in 2008, it was 30 percent. And in Athol, 28 percent of the single-family home sales were REOs.

But the numbers in Massachusetts pale to what’s happening in California, Nevada, and Florida – markets that have been hammered by foreclosures. In California, one in five home sellers in 2008, or 20 percent, sold because their house was in foreclosure or at risk of foreclosure, according to a report by the California Association of Realtors.
 
When real estate agents can’t sell these distressed homes, some lending institutions turn to professional auctioneers for help. Texas-based auctioneer Hudson & Marshall will try to unload some of Bay State REOs this week. Yesterday, the company was scheduled to auction 29 foreclosed properties at the Sheraton Springfield Monarch Place Hotel. Saturday afternoon the same auctioneer will try to sell off 100 properties at the Quincy Marriott Hotel.

It doesn’t take a genius to figure out that 2008 was a tough year for the residential real estate market. Countless of experts, analysts – and yes – bloggers, have spewed out an endless stream of the same old depressing news about plummeting home values and sales.

With Housing Scene, a new blog on Banker & Tradesman’s new Web site, I hope to look beyond some of the most frequently cited statistics. For example, most people already know that prices and home sales in Massachusetts were down last year. And many home sellers weren’t too thrilled with the offers they were getting. A sampling of transactions from The Warren Group shows that roughly 30 percent of single-family home and condo sellers sold at a loss - meaning that they sold their property for less than what they originally paid for it.

The Warren Group, Banker & Tradesman’s parent, will be releasing its year-end data tomorrow morning and the report won’t be upbeat. Seven months in 2008 saw double-digit percentage declines in statewide home prices.

For some who have long complained about the sharp increase in home prices and the lack of affordable housing in Massachusetts, the drops are a welcome relief. But with the median price hovering around $300,000, the Bay State still ranks as one of the most expensive housing markets in the country. And home seekers in some towns aren’t getting the bargains they expected. Single-family home prices actually jumped by 10 percent or more in a few Bay State communities, including Cambridge, Hamilton and Manchester-by-the-Sea. (Cambridge’s median home price reached $750,000 last year!)
 
Keep an eye out for tomorrow’s report.