End of Building Boom Means Lower Home Prices In Some Locales
In a story in The Day about how shoreline towns have seen home values increase while in other towns prices plummeted, reporter Lee Howard notes that Salem home prices have dropped steeply.
Mystic real estate broker Norm Krayem points out that the town had a building boom a few years ago which resulted in luxury homes with price tags of $400,000 and higher. That helped drive up prices, but now that new-home construction has slowed, prices are retreating.
The median price for homes sold in Salem through July tumbled 25 percent to $262,500, according to The Warren Group. Prices hit a peak two years ago when the median reached $339,950.
It’s a trend that probably has affected plenty of other towns: Home values taking a dive because there are fewer new homes being sold. Take Greenwich. In that sought-after town, already-high prices were bloated from the mega-mansions that sprouted up when the stock market was roaring. By 2007, the median home price had reached $2 million. Today, it’s down to just under $1.5 million.