REOs Make Up 11.3 Percent of Sales in Massachusetts

Bank-owned property sales made up more than 10 percent of Massachusetts’ single-family home sales transactions in February, according to ""The Warren Group"":http://www.thewarrengroup.com, a real estate data and research firm based in Boston.
Of February home sales in the state, 206 were REO properties, representing 11.3 percent of all single-family home sales during the month. Based on The Warren Group's historical market data for the region, that's approximately five times as many as the same month two years ago, when there were only 48 sales of bank-owned single-family homes, representing 1.8 percent of sales.
According to Timothy M. Warren Jr., CEO of The Warren Group, distressed property sales in the Bay State have become a bigger share of the market, and he says they will continue to be a factor going forward as lending institutions try to reduce their portfolio of real estate-owned homes.
The New England research company reported that overall, Massachusetts' single-family home sales fell 14.6 percent from a year earlier. Year-to-date single-family home sales in the state are down 12.5 percent, with 3,732 transactions recorded in the first two months of 2009 compared to 4,264 a year ago.
In regard to property values in Massachusetts, Warren explained that in some communities, REOs are in direct competition with non-distressed properties and are having an impact on property values in the area. ""We found that statewide, the median price for single-family homes last month would have been $21,000 higher - or about 8.5 percent higher - without the bank-owned home sales transactions,"" Warren said.
The Warren Group found that the median selling price for a single-family home in the Bay State dropped 18.3 percent to $245,000, down from $300,000 in February 2008. February was the sixth consecutive month that the median home price in Massachusetts has been under $300,000 and also the sixth straight month that prices have declined by double-digit percentages, The Warren Group said.
The company also reported that condo sales in the state plunged to a 13-year low during the month of February. There were 866 condos sold statewide in February, down 30 percent from 1,236 a year earlier. During the first two months of 2009, condo sales have plummeted 29.5 percent, The Warren Group said. The median condo price also declined in February, dropping 14 percent to $220,000. It was the lowest median condo price recorded in the state for the second month of the year since 2003.