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Home Sales in February Drop – Will It Continue?

February home sales in Massachusetts are down 6% compared to February 2013According to data provided by the Warren Group, there were 3,368 home sales in Massachusetts in February, down 6% compared to February 2013, when there were 3,583 home sales.

Although home sales dipped last month, we don’t expect this downtrend to continue. March month to date sales have been strong, and as we reported earlier this month in our blog, How the Polar Vortex Affected the Real Estate Market, year to date pending home sales are up significantly.

Low inventory levels are really the main factor affecting sales. As of today there are 19,355 homes on the market in Massachusetts, 4% fewer than there were last March when there were 20,048 homes for sale.

Pending Sales Are Up

Year to date pending home sales are up 15% compared to the same period last year. Pending means that a seller accepted an offer on their home but the home is not actually sold yet. This is the best indicator of what’s to come for home sales in the months ahead. January pending sales were up 7% and February pendings were up 19%!  This really showed us that the poor weather did not scare away buyers from making offers.  March month to date pending home sales are up 29% compared to pending sales the same period last March, which will result in an increase in home sales in March and April.

Pending Home Sales

2013

2014

Difference
Year to Date Total

12,887

14,772

15%

Jan

4784

5129

7%

Feb

4783

5,702

19%

March 1-18

3,607

4,647

29%

Source: MLS Property Information Network

Home Prices Going Way Up

With higher demand and fewer homes for sale, home prices are up across Massachusetts. The average price for a single-family home in Massachusetts in February was $389,948, up 8% over last year when it was $360,833. Condo prices have gone up substantially: condos in Massachusetts sold last month for an average of $319,244, up 29% over last February when the average price was $247,534.

The same was true in Southern New Hampshire, where single-family homes sold for an average of $256,257, up 18% over last February when the average price was $216,964. Condo prices in Southern New Hampshire also showed an increase: the average selling price for a condo last month was $186,557, up 4% from February 2013 when the average was $178,704.

With prices going up, we expect more sellers to put their homes on the market.  As we reported in January, home values are going up in many counties across Massachusetts, and some are returning to mid-2000 peak ranges. This will prompt many homeowners to put their homes on the market, improving inventory levels which will help satisfy buyer demand for homes and  positively affect sales in the coming months.