2011 Real Estate Recap and What to Expect in 2012
Considering all the turmoil the real estate market has endured for the past few years, home sales numbers in Massachusetts for 2011 actually show improvements in key areas.
Though overall sales for homes in Massachusetts dipped 4% in 2011 compared to the previous year, the number of single-family homes put under agreement in December increased for the eighth straight month compared to the same time in 2010, according to the Massachusetts Association of Realtors®. In Massachusetts a total of 54,425 homes sold through MLS in 2011.
2011 was also the year we saw home prices in Massachusetts begin to stabilize. The average home in Massachusetts sold for $359,553, a slight increase of .65% over 2010. Condos and multi-family homes showed a larger increase in pricing. Condo prices rose 2.2% in 2011 to an average sale price of $346,337. And the average multi-family sold for $273,958, an increase of 3%.
We saw short sales on the increase as well. There were 3,722 short sales in Massachusetts in 2011 compared to 3,412 in 2010, a 9% increase. A new initiative started by the FHFA has banks becoming more aggressive in getting in touch with borrowers in danger of defaulting on their mortgages. They’re being trained to help distressed homeowners find alternatives to foreclosure, such as doing a short sale. We predict short sales will continue to increase as they are a better option for homeowners.
Short sales are better for banks, too. They make more from a short sale than a foreclosure. In 2011 the average price for a short sale in Massachusetts was 30% more than the price of a foreclosed home. The average sale price for a foreclosed home was $152,927, compared to the average sale price for a short sale at $199,329. Neighborhoods benefit from short sales as well. Foreclosed homes tend to be vacant longer, dragging down the values of the surrounding homes. People move into short sale homes much faster.
The sales of foreclosed homes in Massachusetts are actually down 12.8%, due to banks delaying foreclosure proceedings. There were 5,945 foreclosure sales in Massachusetts for 2011 compared to 6,711 in 2010. Banks are now taking their time scrutinizing documents and processing foreclosures. In December, Attorney General Martha Coakley sued banks over illegal loan practices including so-called “robo-signing,” the practice of signing foreclosure documents without reviewing them. We will see an increase in foreclosures once the processes become more standardized and banks catch up on the backlog of foreclosures. In the meantime homeowners in foreclosure should use these delays to their advantage and start seeking alternatives to foreclosure such as doing a short sale, or deed-in-lieu of foreclosure.
With the Massachusetts unemployment rate well below the national average, we will see more qualified buyers looking to purchase a home in 2012. This month we’re already seeing an upswing in interest from potential home buyers. With plenty of low and no down payment mortgage options available and record low interest rates, 2012 will be a great year to purchase a home.
Source: MLS Property Information Network
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