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.