The National Association of Realtors reported Monday that existing home sales dropped 9.6%, and the median price, $156,100, was the lowest since February 2002.
The silver lining, say economists, is that bargain prices, coupled with low interest rates, might finally spur some buyers off the fence as the real-estate industry prepares for its busiest season. Even without the $8,000 federal tax credit that stoked sales last spring, industry watchers predict a larger number of transactions this year.
The job market is getting better and that will help the Wellesley housing market and make people feel more confident about their income-earning prospects. You need that confidence to buy a house. Household formations are also very important. Kids may have moved back in with their parents, or two people may have moved in together, because of job concerns. Now they can move into their own place.
Still, Monday's data painted a picture of pain and price declines that have spared no region.
The housing market is still clearly years away from staging any meaningful recovery.
February sales data are expected to show that the market for new homes is just as lackluster as that for existing dwellings.
Some builders of new homes are increasing discounts on residences and boosting commissions to brokers.
Overall, February's weakness could have been driven by bad weather, deals canceled over lowball appraisals and a higher number of distress sales, according to the National Association of Realtors.
A third of transactions were all-cash sales, and investors accounted for 19% of February sales activity, down from 23% in January. Low prices in many markets also reflect a new reality as sellers finally give in and reduce the asking prices on their homes in hopes of a fast deal.
"After three years of the housing downturn, people are becoming much more realistic in terms of valuing their homes," said Lawrence Yun, the National Association of Realtors' chief economist.
Economists say the number of distressed sales will continue to rise, and put pressure on Wellesley Housing Market prices. But mortgage rates, which were trending upward during the fall and winter months, have been falling in recent weeks amid global turmoil over the crises in Japan. Rates for 30-year loans were well below 5% last week.
"Few think mortgage rates are going lower," said Moody's Analytics chief economist Mark Zandi. "It's more likely they will be 6% than 4% next spring. This lights a fire under buyers."
We have a team of experts to help you with your real estate transaction and assisting you in finding the home of your dreams.Â Call Christine Norcross for more information â€“ cell 781-929-4994 or to research the Boston neighborhoods, visit my Wellesley Real Estate or Newton Real Estate websites.Â Search for homes HERE.Â We have a team, Christine Norcross & Partners, at William Raveis and we can help you find your dream home in theÂ Wellesley Real Estate marketÂ â€“ Natick, Newton, Needham, Wellesley, Wayland, Weston and more.