Home Sales in Massachusetts Strongest Since 2007
2012 is shaping up to be one of the strongest years for home sales we’ve seen since 2007. According to the MLS Property Information Network (MLSPIN)*, year to date home sales in Massachusetts reached 44,055, an
increase of 19% compared to the same period last year. The last time home sales were higher was during the same time period in 2007, when that number was 47,293. Even with the large increase in sales, average home sale prices remained flat at an average of $370,181.
The majority of those home sales, about 49%, occurred this summer. From June 1st 2012 to August 31st, there were 21,546 home sales in Massachusetts, compared to 17,834 last summer, a 20.8% increase.
We all know about the weak job numbers from Friday but another key economic indicator hasn’t been so bad at least around here. Home sales this summer were actually pretty good, but will that trend continue into the fall. Joining us this morning to help us break it all down are our real estate experts John McGeough and Anthony Lamacchia from Lamacchia Realty . First of all gentlemen, have you recovered from the Zip Trip Season?
We have. I’m missing my ripped jeans and flip flops but we’re adjusting.
I think you know if you go with that look it could bring you a little success as we go forward here. We just talked about these numbers a little bit let’s look back at the summer, and Anthony how was it around here, what were the indicators which way is the sign pointing up or down or the arrow.
For sure, home sales year to date are up 20%. For June, July, and August they were up 21% over last year it’s even speeding up a little bit it’s very encouraging.
Sales are good, John, where are the prices at?
Prices are actually up around 1.7%, so round up to about 2% overall so we’re seeing just a slight uptick nothing to get too excited about, but the good news is, up means we’re getting towards stabilization and that’s what we want, we want to get to the point where we’re at the bottom so we start to see an uptick.
So what’s your sense now if you had that in the summer a traditionally slower time to sell I would think as we get into the fall is there an expectation that this is going to continue?
I think it is going to continue, there were a few years in the early spring we noticed a burst in sales but this is continued. This summer didn’t even slow down like it normally does and now inventory is down 17% from where it was a year ago and that’s the key factor. So there’s about 32,000 homes on the market in Massachusetts right now compared to 39,000 last year, and that’s great because when there’s too many on the market that’s when things slow down. One correction on what John said, he meant to say list prices, listing prices are up about 1.5%– sale prices are the same, which is good news, we need the market to flatten out before it can go back up.
So we’re a long way away from people getting list and maybe getting into a bidding war where someone gives you over list
It is happening. It all depends on once again that high demand price point you’re first time buyer and there are five buyers for three homes you are going to see multiple offers if it’s priced correctly. That’s why we’ve been telling clients and folks in general, if they’re not selling in this market which is better than we’ve ever seen there’s an issue.
So is the segment that’s moving the most are these first time home buyer type thing, are you seeing this in over all sort of pricing areas.
I think move up buyers are coming back, move up buyers are people that already bought and they want to get something bigger– that’s starting to come back and that’s encouraging. There was a three year period where people who owned a home and couldn’t sell it because they couldn’t get as much as they wanted and then they weren’t buying the next level up so it’s nice to see.
We talked before about when’s the best time to sell, well you have to have your house on the market to sell so any time is a good time, but the fall particularly does tend to be a little bit better at least historically in terms of putting your house on the market.
That’s right, historically it’s the second best time to sell, only second to the spring market. As Anthony said summer was better than we’ve seen in the past we’re anticipating once again and since interest rates are still 3.6, 3.5 you know, ridiculously low, then we should see that trend continue and we should have an actually a really active fall market we’re hoping that it’s up again as far as sales, maybe it’s not 20%, compared to last year but even if it was 10 or 15 percent that would be a great sign as we head towards the end of the year.
So assuming it continues Anthony what are you expectations in terms of what this year will be like in the housing market compared to what we’ve had in previous years?
Oh it’s definitely, there’s no question it’s going to a better year. It’s going to be the best year for overall sales since 2007—that’s what it is now and that will continue, as John said it might slow up a little bit as we get to the end of the year because there’s less inventory, there’s less homes for people to buy, but it’s going to set us up really well for 2013 and that’s where maybe we could see prices go up a little bit because as I’ve said—it’s not the stock market, prices in real estate don’t go down and up. They go down they level off, then they go up so even if next year were flat again that would be a good thing but there’s a chance we could see prices go up just a little bit.
And real quick John, if someone has a house that’s sitting on the market for a while, you said in this market is a problem, that problem is mostly what, the price, with how your house is showing, curb appeal, what would it be?
Usually it’s two things, marketing, never underestimate exposing the home correctly, and obviously price. If you’re not getting the activity, and not getting scheduled showings, and not getting an offer, look no further than the price.
Gotta bring it down if you want it to sell. Ok Lamacchia Realty we appreciate it as always.[/toggle_content]
Home Sales Forecast for Fall
Historically fall is the second busiest market for home buyers, so home sellers shouldn’t wait until spring to put their homes on the market. This fall more than ever is a great time to sell your home. Every month this year we’ve seen an increase in home sales when compared to the same month in 2011, and we believe this will continue through the rest of 2012. Even the summer did not slow down as much as usual.
One factor contributing to the stabilization of the housing market has been the lower inventory of homes for sale, which remains low for September. When we look at the Massachusetts MLSPIN number of homes listed for sale, currently at 32,367, it’s a 17% decrease compared to September of last year, when there were 39,120 homes for sale. With fewer homes available for sale, we are starting to see slight increases in list prices. The average listing price this month, $458,543, is actually 1.7% higher than it was September last year, when it was $450,612.
The lower inventory is causing increased competition for homes, which means homes are selling faster than they did in 2011. According to a recent news release from the National Association of Realtors® (NAR), the time it takes to sell a home is shrinking.
Lawrence Yun, NAR chief economist, commented on the effect these low inventory levels have on the housing market across the country: “As inventory has tightened homes have been selling more quickly. A notable shortening of time on market began this spring, and this has created a general balance between home buyers and sellers in much of the country.”
We’re seeing this effect here in Massachusetts. Summer home sales in Massachusetts that fell within the price range of $200,000-$499,000 spent an average of 105 days on market, 3.6% less than last summer.
A Good Time for Buyers
Interest rates have hit record low levels this year. As of this writing, a 30 year fixed mortgage hovers around 3.65%, down from 4.26% a year ago. This is good news for buyers. The average rent for a 2 bedroom apartment in the metro Boston area is now around $2,300. With mortgage rates this low, monthly mortgage payments are well below average rents. For instance, with a 5% down payment on a $250,000 home, at current rates the monthly mortgage payment would be about $1,500.
Buyers should keep in mind, however, that with such low inventory levels and competitive home prices, when they see a home they want they need to act fast. Have your agent schedule a showing as soon as possible and make an offer. We’re seeing more home buyers lose out on homes because there aren’t enough homes on the market for them to see. And when they do find one they love, there are multiple offers on the home. We expect this to continue for the rest of the year.
For more tips on buying a home, see our blog, In a So-Called Buyer’s Market, Buyers Can’t Find Homes
*MLSPIN data includes most home sales in Massachusetts, but it does not include all sales, such as certain areas in Cape Cod and Western Massachusetts because each area has its own MLS.