July 2013 Best Month for Home Sales in Massachusetts Since 2006
Watch John & Anthony Discuss Why July Home Sales Highest Since 2006
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Related: View July Housing Report
It was a banner month for home sales here in Massachusetts, in fact July was the best month since 2006, that’s very good news if you have a home to sell. Joining us this morning is John McGeough and Anthony Lamacchia of Lamacchia Realty , thanks for joining us guys!
Good morning, haven’t seen you in 3 days.
I know it’s been forever right? So first of all tell me about this trend, tell me what was found.
Well a big reason that this happened is because we had such an incredible spring surge, and people tend to forget that the home sale process takes a few months, so homes that were going under contract in March April May most of them closed in June and July, and July ended up being a big month and it was a great thing to see.
Is this a signal that people who were in the market to buy a home may want to do it now, a lot of people were kind of lingering knowing there was a lot of inventory and knowing the prices were so good is this a signal that they may want to jump in and make that home purchase?
We think so, I mean we’ve been saying all year especially with interest rates, interest rates have crept up and gone up over a point from over their low this year, I think they were hovering around 3.2 and they were peaking at about 4.6, 4.7 they’re down now about 4.5, you don’t want to try and play the interest rate game too much you just want to get out there and if it makes sense to buy and you have the money to put down; the inventory levels have been low this year we’re hoping that we get a little bit of replenishment, post Labor Day, and so we’ll see. We definitely encourage people to get out there.
Once everyone is done with their vacation the kids are back are on a routine, you can think about it, ok we have this house to sell, what about if you have a condo, are sales up for condos as well?
Well it’s funny single family home sales were up 18% in July, and they were up 17% for condos, so that was nice to see that condos followed suit, we think that in August home sales will be up as well but less. We’re seeing it slowdown a little bit, we think, there’s a few reasons, number one the spring always surges, and number two with the interest rates increasing there was a little bit of slowdown in May and June, so we think in August the home sales will be a little slower, September they might even be even with last year, and we hope they pick up, the second busiest time of year for real estate market after the March and April is September/ October.
I wouldn’t have guessed that, I would have thought well you know things are cooling down kids are going back into their routine, but maybe that’s why people are putting their homes on the market, and people may have some time to actually go look at homes.
That’s right and as Anthony said there’s always a slight delay from when you make an offer to closing, so you actually have December over the past couple of years has been second in closings only to June and July. So we anticipate if history proves itself, this year will have another little rush come fall right into the winter, some of it’s weather dependent, as you know but I sometimes think we are actually spoiled a little bit, I mean 4 and a half percent interest rates are still fantastic.
Well let’s talk about that, to a society that has now grown accustomed to these really low interest rates, could rising interest rates start to dampen these sales into the rest of this year.
Well it’s impossible for them not to have some impact, I made this example on here a couple of months ago, where if someone was approved for say, $400,000 in May, with a rate of 3.5%, well now if the rate is 4.5%, instead of being approved for $400,000, they’ll be approved for $360,000. So it’s impossible for it not to have some impact, but like John said, they’re still so low that buying is still affordable, and we don’t see any reason there’s going to be any major slowdowns like that I’m just saying when you look at July home sales being up 18%, that’s significant I don’t expect that to happen for the rest of the year.
Are we seeing also people who are underwater in their mortgages, is that group going down, generally speaking?
It is, the average selling price–sometimes the reporting can be confusing, a consumer will see median sale price but we always look at average sale price and the average selling price now in Massachusetts for a single family home over 400,000 and that’s up from 350000 last year, we’re at about a 12% increase, so that has taken a lot of folks who were upside down and making them right side up or breaking even so that’s had a huge impact on the market this year and we believe that’s going to continue.
Lamacchia Realty I’m glad we didn’t have to go 72 hours without seeing you
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