Northeast Home Sales, Prices Drop Again In May

Home sales in the Northeast declined more than 13 percent in May from year-ago levels, the worst showing in the country, as the specter of job losses loomed over the region.

The median sales price in the Northeast dropped almost 13 percent to $243,600, the National Association of Realtors recently announced.

The association includes New York, Pennsylvania and New Jersey, plus the six New England states, as part of the Northeast region.

According to Walter Molony, spokesman for the Realtor’s group, the Hartford-West Hartford-East Hartford metropolitan statistical area was 0.2 percent above May 2008, while the median price was down 1.6 percent.

Nationally, sales of existing homes tumbled 6.6 percent in May from the previous year, without adjusting for seasonal factors. The U.S. median sales price slid almost 17 percent to $173,000.

But James Diffley, group managing director of IHS Global Insight’s regional services group, focused more on the 7.6 month-to-month sales gain in the Northeast.

“The numbers are giving some comfort that we’re at the bottom,” Diffley said. “We have a more optimistic view than just a few months ago.”

Monthly Gains

In fact, all nine major Northeast cities tracked in the Associated Press-Re/Max Monthly Housing Report showed monthly gains in home sales.

But compared to last May, sales were down across the board with seven metro areas recording double-digit declines.

The report analyzed sales transactions in the metropolitan statistical areas recorded by all real estate agents, regardless of company affiliation.

Jitters are still running high in the suburbs of New York, where sales fell by 30 percent, the worst decline in the region.

RI Gets Hammered

Excluding New York City, the median price in the area fell almost 8 percent to $388,000 as prices in Providence, R.I. continue to get hammered the most in the region, mostly because of a large share of distressed sales.

Almost half of all sales are foreclosures or short sales, said Ron Phipps of Phipps Realty in Warwick, R.I. The median price plunged 24 percent to $189,000 in May. Homes below $250,000 are getting the most attention, especially from first-time homebuyers, while sales activity is “sporadic” above that, he said.

“A lot of people are stepping onto the first-time home-buying ladder,” Phipps said.

The bursting of the housing bubble helped push the U.S. economy into the worst financial crisis in seven decades. Now the economy is hindering the recovery of the real estate market. As companies continue to shed jobs, more cash-strapped homeowners are predicted to go into foreclosure.