2014 Housing Market Recap
2014 was another good year for the real estate recovery, although it did not quite live up to original expectations for many. Overall home sales across all of Massachusetts for 2014 declined about 1% compared to 2013. There were a total of 76,732 homes sold in Massachusetts in 2014 compared to 77,281 homes sold in 2013. However the average home price did appreciate from $344,298 to $368,490, which represents an increase of 7%.
Home sales were down slightly 7 out of 12 months in 2014, but they were up substantially in June and December which consequently resulted in a net decrease in overall home sales of only 1%. This beat the national trend as reported by the National Association of Realtors, who found that existing home sales dropped 3.1% over the course of the year across the United States.
Every county in Massachusetts saw a slight decrease in overall home sales except for Essex County and Barnstable County, which both saw slight increases. It was particularly good news for Barnstable County since their recovery has been a bit slower due to their continued high inventory of homes for sale.
Average Prices by County:
In terms of average sale price for counties in 2013 versus 2014, Nantucket led the way with a 17% increase in their average sale price which was almost $1,400,000 for 2014. The second largest increase occurred in Suffolk County at 16% at almost $600,000, followed by Middlesex at 9% at $459,000, and Essex and Berkshire Counties with an 8% increase with 2014 average sale prices of $391,000 and $288,000 respectively. The only county with a lower average sale price was Dukes County which saw a decrease of 7% down to an average sale price of $773,000 which is attributable to the high number of homes on the market throughout the year across Martha’s Vineyard.
Summary of the year:
2014 started out with extreme weather conditions from the Polar Vortex which lead to slow start in the Real Estate market that really did not take shape until about March. Early in the year Buyers were ready to buy but Sellers hesitated to list their homes until the cold lifted leaving inventory very low in January and February. At that time it was the lowest inventory in 10 years, which lead to bidding wars and inflated prices. Then by mid spring when many sellers listed their homes and inventory went up the market had already started to correct and bidding wars died down however homes were still selling. Then by the time fall came Realtors realized the market was decelerating. Inventory swelled to a two year high in late September. At first sellers did not believe it but by mid-October they did and many home sellers decided to make price reductions. The price adjustments really helped because by November the market changed course and pending homes sales began to really pick up. This resulted in December home sales to be up about 10% in Massachusetts and 12% in New Hampshire, which was a great way to finish the year. The strong buyer activity also continued into December and pending homes sales rose to over 10%.
Interest rates were in the low to mid 4’s for most of the year which contributed to slower home sales. FHA lending also slowed down due to a notable increase in their annual fee in later 2013. The good news is FHA recently brought that fee back down and interest rates are also back in the mid to high 3’s. These two factors are just two of the 9 Reasons we feel that 2015 will be the biggest year for the housing market since 2005.
Southern New Hampshire:
Overall home sales in the Southern New Hampshire Counties of Cheshire, Hillsborough and Rockingham were down 2% for 2014 compared to 2013. The good news is prices appreciated 12% from $227,295 to $257,346. This is wonderful news as it lifted many more homes out from being underwater.