Bank-owned Home Sales Dragging Down Bay State Home Prices
By Aglaia Pikounis
The Warren Group released its home sales and price report for the month of February this morning and the numbers aren’t much different that they were last month. Single-family home sales fell almost 15 percent last month compared to a year earlier, while the median single-family home price dropped 18 percent.
Despite the declines, the Bay State isn’t doing as bad as other parts of the country when it comes to so-called distressed property sales. In Massachusetts, just about 1 in 10 single-family home sales last month were of bank-owned properties – or homes that have been foreclosed.
In other parts of the country, distressed property sales are much bigger share of transactions. The National Association of Realtors reported yesterday that distressed properties accounted for 40 to 45 percent of sales transactions in February.
In California and Florida, distressed sales accounted for roughly two-third of sales during the fourth quarter. And in Rhode Island, nearly half of single-family homes sales were short sales or foreclosures in January.
Still, the sale of real estate-owned property, or REOs, is definitely a drag on home sales prices. The Warren Group found that if the bank-owned property sales were taken out to the equation, the median price for homes sold in January and February would have been $272,000 instead of $251,000.
In fact the median price for the bank-owned homes during the first two months of 2009 was just under $100,000.