Midyear Housing Report: 2014
Though home sales were off to a slow start this year, a surge in home sales in June allowed midyear sales totals to fall less than 1% compared to the first six months of 2013.
According to data provided by The Warren Group, there were 33,665 home sales for all types of homes (single-family, condo, and multi-family) in Massachusetts from January 1 to June 30 this year, compared to 33,861 home sales for the same period last year, a difference of just 0.6%.
Home sales in March took the biggest hit when compared to March last year: there was a 7% decrease in the number of home sales, a disappointing start to the spring housing market which was caused mostly by a bitter cold winter. But last month’s numbers were large enough to help overall totals approach sales numbers for the same time period last year.
Massachusetts home sales in June rose 6% this year compared to June of 2013. There were 8,846 homes of all types in June compared to 8,363 homes sold in June of 2013.
Earlier this year because of the extended bad weather, some sellers delayed putting their homes on the market which affected housing inventory. As you can see from the chart below, monthly housing inventory numbers were lower earlier this year than they were for the same month 2013. By the end of March numbers began to improve, and housing inventory numbers began to top last year’s inventory numbers. All that pent up demand for homes caused home sales to increase in June. In the early spring we saw a lot of bidding wars, which helped push average selling prices up.
The big news is that prices for homes in Massachusetts have been steadily increasing for the past six months. The average selling price hit $387,818 in June, an increase of 6% compared to June of 2013, and the highest monthly average selling price this year.
The condo market continues to be a strong factor in the housing market. In June, condo sales increased 11%, making it the sixth month in a row condo sales increased compared to the same month in 2013. As we recently reported, the demand for condos is high, particularly in the Greater Boston area. Many first-time home buyers choose condo living because of proximity to work, shops, and cultural attractions. More empty nesters are downsizing and moving into condos because of the convenience and low-maintenance. We expect this trend to continue through 2014.
Another trend we’re watching are interest rates. As of today, interest rates for a 30 year fixed mortgage are 4.15%. Last month, interest rates fell to their lowest point in a year. Low interest rates are making homeownership more affordable and have attracted more people to the market.
New Hampshire Home Sales
For New Hampshire counties Cheshire, Hillsborough, and Rockingham, there were 4,434 home sales for the first six months of this year compared to 4,574 during the same period last year, a decrease of 3%.
As in Massachusetts, June home sales for Southern New Hampshire showed the highest increase of the year: 1,088 homes sold in Southern New Hampshire last month, an increase of 3%.
The average price for these New Hampshire counties hit $242,888 in June, the highest monthly average price this year, which is a 1% increase over June of 2012.
What to Expect for the Rest of 2014
Given increased inventory we don’t really see prices rising, they will most likely stay flat.
We expect home sales to be up in the next 6 months compared to last year for a couple of reasons. Based on data we pulled from MLS, pending home sales from June 1st to mid-July this year are 5% higher than the same period last year. There are currently 13,122 homes pending in MLS compared to 12,546 homes during the same time last year.
Another reason is that last year the government shutdown really slowed things down. Massachusetts home sales in November last year dipped 10% compared to November 2012. This year, however, we expect home sales to be higher.