A Look Back at How Home Prices Have Changed in the Past 10 Years by County
In many areas in Massachusetts the average selling prices for homes are increasing.
Some areas are returning—and even exceeding—their pre-housing crisis peak prices. As we stated in our Midyear Housing Report, the average selling price for a home in Massachusetts hit $387,818 in June, an increase of 6% compared to June of 2013, and the highest monthly average selling price this year.
Based on data provided by MLS Property Information Network, the average selling prices for the first six months of this year in Essex, Middlesex, Norfolk, Plymouth, Suffolk, Worcester, and Bristol Counties have all increased since they hit their lowest points in 2009.
Some counties are showing bigger increases than others.
Norfolk, Middlesex, and Suffolk Counties are experiencing the highest price increases, and not just from the lowest point in 2009. Average home prices in these counties are now well above their pre-housing crisis peaks, with Suffolk County prices 35% higher than their highest point in 2007.
In Essex, Worcester, Bristol, and Plymouth counties, however, the average selling prices for homes have yet to exceed peaks they hit 2005-2007.
When we look at the graph above, we can see from 2004 to 2009, the average selling prices in Norfolk County were higher than all the other counties in central and eastern Massachusetts. But in 2010 this changed. The average price for a home in Suffolk County hit $473,195, 2% higher than in Norfolk County that year where the average price was $463,392.
The housing recovery started in Greater Boston and has been moving outward. You can see from the chart that once prices started to rise in the counties of Suffolk, Middlesex, and Norfolk, prices then began to increase in Essex and Plymouth. Worcester and Bristol Counties are still struggling to recover, they are still making slow and sure progress.
Though all counties increased after 2009, prices continued to increase in Suffolk County by leaps and bounds, and by the first six months this year, average prices reached an all-time high of $650,478.
Is Inventory the Only Factor?
A combination of factors have led to the significant price increases in Suffolk County. There is a high demand for homes in the Boston area, especially for condos. 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.
Yet the inventory of homes available for sale is very low. From 2005 to 2007, end of year inventory levels for Suffolk and Norfolk Counties were in the 3,800 range. But levels for Suffolk County are now the lowest of any of these counties—just 1,055 as of today, yet the demand to live here is on the rise. As the demand rises, more developers are taking advantage of this trend and building luxury condos in Boston, which is driving up the average prices for the whole area.
With inventory levels a third lower in Beacon Hill, Back Bay, and Midtown, we expect prices to continue to rise.
Prices by Type of Home
Home selling prices have also changed in the past 10 years depending on the type of home purchased: single-family, condo, or multi-family. While the number of home sales for single-family homes have increased 4 out of the first 6 months this year, the number of condo sales have increased every month compared to last year, and this demand has had a direct effect on price.
Single-family home prices are currently just 1% below their peak from 2005, and multi-families are 6% below peak, while condo prices are the highest they’ve been in 10 years.