Million Dollar Sales increase 7% to new record in 2019
Sales of Single Family Homes (SFH) at $1 million or more in the 34 cities and towns of Essex County increased 7% in 2019 to a record level of 353.
Marblehead regained the top position from Andover, but the biggest move came in Newburyport, where there were 46 sales, double the number in 2019 and three times the 2015 level.
Click Million Dollar Sales by Town to download a copy of the table including aggregate numbers not in the table above.
Andrew Oliver
Realtor, Sagan Harborside
Sotheby’s International Realty
www.andrewJoliver.com
www.OliverReports.com
Tel: 617.834.8205
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
How did North Shore Home Prices Perform in the last Decade?
The decade from 2010-2019 saw a remarkably consistent record of Single Family Home Price increases throughout the North Shore and Essex County.
For the purposes of comparison I have converted all prices to a base of 100 for 2009.
The first chart shows the performance of Marblehead, Swampscott, Salem, Beverly and Essex County as a whole. If you look at the numbers for 2019 you can see how consistent the performance was, with a 50% increase over the decade.
(more…)
Housing Inventory slump continues
Single Family Homes (SFH)
After years of decline, the number of Single Family Homes (SFH) for sale in Essex County on the first of the month compared with a year earlier (YOY) increased from August 2018 until June 2019. Since then the decline has resumed and, in fact, accelerated, as this table shows:
Will house prices continue to rise in 2020?
Many years ago, during my investment banking career, I hired a young analyst to write a report on a very successful company, which had grown earnings for 12 years in a row. This analyst wanted to downgrade the shares because: “they have been growing for 12 years and cannot continue to grow.”
Needless to say (I hope) I changed the conclusion on the report.
Why is that relevant to the housing market outlook for 2020? The market has seen annual increases since 2010, so it has risen for the last 9 years. So it can’t continue, right?
Well, why not?
I have often written about the law of supply and demand.
According to the National Association of realtors (NAR): “Total housing inventory at the end of December totaled 1.40 million units, down 14.6% from November and 8.5% from one year ago (1.53 million). Unsold inventory sits at a 3.0-month supply at the current sales pace, down from the 3.7-month figure recorded in both November and December 2018. Unsold inventory totals have dropped for seven consecutive months from year-ago levels, taking a toll on home sales.”
Meanwhile: the median existing-home price for all housing types in December was up 7.8% from December 2018, as prices rose in every region. November’s price increase marks 94 straight months of year-over-year gains. “Price appreciation has rapidly accelerated, and areas that are relatively unaffordable or declining in affordability are starting to experience slower job growth,” Yun said. “The hope is for price appreciation to slow in line with wage growth, which is about 3%.”
In Essex County, the inventory of Single Family Homes (SFH) for sale, after declining for several years, increased Year-on-Year from August 2018 to June 2019. But since then inventory has declined and that declined has accelerated:
And the supply makes availability nationally seem like an abundance:
Recently, one of my sons was badly injured in a fall while hiking in Nepal. My younger son flew out to be with him. Each day we got medical updates which were full of information. My younger son would ask what his condition was and was told still critical. “That’s all that matters,” he said, “the rest is just noise.”
At the end of 2018 in an article entitled Is a recession coming soon? I concluded by saying this:
“At the moment it (consumer confidence) is intact. As long as that remains so the likelihood for 2019 is a slowing, but still growing, economy and a stable housing market.”
And earlier: “While the increase in the Fed Funds rate has been getting a lot of publicity very recently, the Fed has actually been raising rates – and indicating that it planned to continue to do so – for 3 years, with the first increase coming in December 2015.It could be argued that the more rapid increase in rates this year has been in response to the major stimulus from the tax cuts earlier in the year. It could further be argued that, on the evidence so far, the Fed has been successful in helping to slow growth to a sustainable level, thereby curbing inflationary pressures which would necessitate even higher interest rates.”
There has been a lot of noise over the last year. A lot. But the economy remains strong: not super strong but chugging along quite nicely. With low unemployment, low mortgage rates and low inventory, the law of supply and demand will continue to apply and suggest that house prices, which grew faster than I had expected in the second half of 2019 as supply dwindled again, will continue on the upward path of the last 9 years.
Read Are You Thinking of Selling in 2020?
Andrew Oliver
Realtor, Sagan Harborside
Sotheby’s International Realty
www.OliverReports.com
www.andrewJoliver.com
Tel: 617.834.8205
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
Essex County 2019 median home prices: a Town by Town guide
[Click here to download the table listing towns in alphabetical order, and here to download the table showing towns from highest to lowest median price.]Overall, in the 34 cities and towns of Essex County, the median Single Family Home (SFH) price increased 3.9% to $475,000 in 2019, while sales were up 2.7%. Both were new record highs.
The table below shows the median price for each town for the last 3 years, with the percentage change in 2019. It also compares sales for the last two years.
Note that a small number of sales can lead to price fluctuations. In general, the larger the number of sales, the more reliable is the median price.
While the overall median price in Essex County was $475,000, only 12 of the 34 cities and towns had median prices below this level, while 22 had median prices above $475,000. The reason for this is that the median price for the the County is calculated by taking all 6,000 plus individual property sales, and many of the towns with a large number of sales are in communities with lower prices.
Calculating the median price for Essex County using towns – i.e. the median price of 34 numbers – rather than individual sales produces a median price of $584,500.
Andrew Oliver
Market Analyst | Team Harborside | teamharborside.com
REALTOR®
Sagan Harborside Sotheby’s International Realty
One Essex Street | Marblehead, MA 01945
m 617.834.8205
www.OliverReports.com
www.TeamHarborside.com
Andrew.Oliver@SothebysRealty.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
Essex County 2019 Housing Market Summary
[Click here to download a PDF of this report.]Single Family Homes (SFH)
The median price of the Single Family Homes (SFH) sold in the 34 cities and towns of Essex County in 2019 increased 3.9% to a new record $475,000. The pace of gain increased in H2. Sales increased 2.7%, just reaching a new high.
Condos
The median price of Condos/Townhomes sold in 2019 increased 6.7%, to $320,000. Sales increased 1.8%.
Andrew Oliver
Market Analyst | Team Harborside | teamharborside.com
REALTOR®
Sagan Harborside Sotheby’s International Realty
One Essex Street | Marblehead, MA 01945
m 617.834.8205
www.OliverReports.com
www.TeamHarborside.com
Andrew.Oliver@SothebysRealty.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
Essex County 2020 Commercial property tax rates: Town by Town guide
While most of us look at residential tax rates, fewer are concerned with commercial tax rates. Yet a healthy commercial business environment can contribute significantly to the attractiveness of a town. The map below shows commercial rates in each of Essex County’s 34 cities and towns, followed by a table comparing residential and commercial rates.
(Click here to download a copy of this map and here to download the table)
There is a bigger variation in commercial rates than in residential rates
The lowest rate for both residential and commercial rates is Rockport’s $10.10, but while the highest residential rate is Wenham’s $18.94, there are 11 towns with commercial rates over $20, with the highest being $28.42 in Salem. 20 towns set the same rate for both residential and commercial, while in 3 towns the commercial rate is more than double the residential one.
Why do some towns have different residential and commercial tax rates?
Cities and towns have the ability to increase the percentage of the total tax bill paid by commercial (and industrial and personal) property owners. The percentage of the value of property classified as commercial varies enormously from town to town.
In Marblehead, for example, where residential property is 95% of the total, a 50% tax shift to commercial would increase the average commercial tax bill from $7,003 to $10,508, while reducing the average residential tax bill by only $189.
Towns with a higher percentage of commercial property are more likely to shift an increased share of the tax bill to commercial owners.
Andrew Oliver
Market Analyst | Team Harborside | teamharborside.com
REALTOR®
Sagan Harborside Sotheby’s International Realty
One Essex Street | Marblehead, MA 01945
m 617.834.8205
www.OliverReports.com
www.TeamHarborside.com
Andrew.Oliver@SothebysRealty.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
Essex County 2020 property tax rates: a Town by Town guide
Property tax rates for FY 2020 for all 34 cities and towns in Essex County have been announced. Below is a map (which you can download by clicking here), so that you can compare tax rates in neighboring towns, followed by the tax rates for each town the last five years. The first table shows the tax rates in alphabetical order, while the second lists them from low to high.
Tax rates for each town
Alphabetically (download a copy of this table by clicking here.
From lowest to highest based on 2020 rates (download a copy of this table by clicking here)
Median and Average Tax Rates
The median tax rate for 2020 is $13.68, down from $14.02 in 2018, while the average tax rate has dropped from $13.95 to $13.80. The highest taxed town, Wenham, has a rate 38% higher than the County median, while the lowest, Rockport, is 26% below the median. Or put another way, the highest tax rate in Essex County is 88% higher than the lowest.
How property tax rates are calculated
There are two main points to understand:
The dollar amount raised by property taxes is based on a simple formula: the dollar levy for the previous year plus 2 1/2% (Prop 2 1/2), plus any new growth (e.g. new construction), plus debt service.
The tax rate is then calculated by dividing the dollar amount to be raised by the Assessed Value of all property. For FY 2020 (July 2019-June 2020) Assessed Values are based upon sales during 2018. Sales in 2019 will be used for calculating the FY 2021 tax rates.
20 of Essex County’s cities and towns choose a single tax rate, whereby residential and commercial properties are taxed at the same rate. The other 14 cities and towns choose a split tax rate whereby commercial properties are taxed at a higher rate – in some cases a much higher rate.
A separate report on commercial tax rates can be read by clicking here.
For a walk through the tax calculation read How is Marblehead’s 2020 Tax Rate calculated?
Tax rate changes in 2020
Of the 34 cities and towns in Essex County, 22 have announced decreases in their 2020 residential tax rate while 12 have had increases approved. Decreases of 5% or more were seen in Lawrence, Amesbury, Lynn, Swampscott, Merrimac and Methuen, while 5% or larger increases were recorded in Wenham, Essex and Rowley. Bear in mind that a major determinant of the change in tax rates is the movement in Assessed Values. Thus, in a time of rising home prices, a general expectation is that tax rates should be flat to down.
Tax Rates of Neighboring Towns
Where taxes become interesting is when one can compare tax rates in neighboring towns. Many people, especially those moving to the area, whether from Boston or elsewhere, are willing to consider more than one town.There are many factors in the decision about where to live, but tax rates can be a significant influence on the decision, and may become more so with the new limitation on the deduction of property taxes from Federal taxation. Some argue that lower property values offset higher taxes. Frequently, however, residents of highly taxed towns cite taxes as a reason for wanting to move.
Andrew Oliver
Market Analyst | Team Harborside | teamharborside.com
REALTOR®
Sagan Harborside Sotheby’s International Realty
One Essex Street | Marblehead, MA 01945
m 617.834.8205
www.OliverReports.com
www.TeamHarborside.com
Andrew.Oliver@SothebysRealty.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
Housing Inventory slumps further
Single Family Homes (SFH)
After years of decline, the number of Single Family Homes (SFH) for sale in Essex County on the first of the month compared with a year earlier (YOY) increased from August 2018 until June 2019. Since then the decline has resumed and, in fact, accelerated, as this table shows:
The next two charts (the first for January to June; the second July to December) show the number of SFHs for sale on the first of the month since 2017. In the first chart the number for January 2020 -554 – shows the renewed decline (in 2019 inventory was increasing until June).
The second chart shows the decline YOY each month from July to December in 2019.
Condos
The number of condos for sale increased YOY from June 2018 until August 2019, but since then there has been a decline, which has also accelerated, although it moderated slightly in January.
These two charts show numbers since 2017 for January to June, and July to December.
The first chart shows the decline in January 2020 YOY while in 2019 inventory was increasing in the first 6 months of the year.
The second chart shows inventory continuing to increase in 2019 YOY in July and August, steadying in September, and then resuming the decline in October.
Comment
While the overall supply of SFHs in Essex County remains very low at just 1 month ( a market is considered to be in equilibrium between buyers and sellers when there is 6 months of supply) the position varies greatly by price, as shown in this table:
Also bear in mind that the January inventory is always the lowest for the year so while the position is dire, it may not be quite a dire as these numbers suggest.
Nevertheless, the conclusion remains that the market remains in favour of sellers right up to $1.5 million, but above that dramatically swings in favour of buyers.
Andrew Oliver
Market Analyst | Team Harborside | teamharborside.com
REALTOR®
Sagan Harborside Sotheby’s International Realty
One Essex Street | Marblehead, MA 01945
m 617.834.8205
Housing Inventory decline accelerates in December
Single Family Homes (SFH)
After years of decline, the number of Single Family Homes (SFH) for sale in Essex County on the first of the month compared with a year earlier (YOY) increased from August 2018 until June 2019. Since then the decline has resumed and, in fact, accelerated, as this table shows:
The next two charts (the first for January to June; the second July to December) show the number of SFHs for sale on the first of the month since 2016. The far right line in each column, representing 2019, shows the increase in the first half of the year followed by the resumption of the decline.
Condos
The number of condos for sale increased YOY from June 2018 until August 2019, but since then there has been a decline, which has also accelerated.
These two charts show numbers since 2016 for January to June, and July to December:
Comment
While the overall supply of SFHs in Essex County remains very low at less than 2 months ( a market is considered to be in equilibrium between buyers and sellers when there is 6 months of supply) the position varies greatly by price, as shown in this table:
Thus, the conclusion is that the market remains in favour of sellers right up to $1.5 million, but above that dramatically swings in favour of buyers.
Andrew Oliver
Market Analyst | Team Harborside | teamharborside.com
REALTOR®
Sagan Harborside Sotheby’s International Realty
One Essex Street | Marblehead, MA 01945
m 617.834.8205
Buyer Demand is Growing
Foot traffic – the number of home showings – is increasing in all areas of the country, with back to back monthly gains for the first time in almost two years, according to this Buyer Demand Growing in Every Region report in Keeping Me Current. (more…)
Housing Inventory declines yet again
Single Family Homes (SFH)
After years of decline, the number of Single Family Homes (SFH) for sale in Essex County on the first of the month compared with a year earlier (YOY) increased from August 2018 until June 2019. Since then the decline has resumed and, in fact, accelerated, as this table shows:
The next two charts (the first for January to June; the second July to December) show the number of SFHs for sale on the first of the month since 2016. The far right line in each column, representing 2019, shows the increase in the first half of the year followed by the resumption of the decline.
Condos
The number of condos for sale increased YOY from June 2018 until August 2019, but since then there has been a decline, which has also accelerated.
These two charts show numbers since 2016 for January to June, and July to December:
Comment
While the overall supply of SFHs in Essex County remains very low at just 2 months ( a market is considered to be in equilibrium between buyers and sellers when there is 6 months of supply) the position varies greatly by price, as shown in this table:
Thus, the conclusion is that the market remains in favour of sellers right up to $1.5 million, but above that dramaticallys swings in favour of buyers.
Andrew Oliver
Market Analyst | Team Harborside | teamharborside.com
REALTOR®
Sagan Harborside Sotheby’s International Realty
One Essex Street | Marblehead, MA 01945
m 617.834.8205
Is the seller’s market coming to an end?
A really interesting article from boston.com asks the question we’d all like to know the answer to: Is the sellers’ market coming to an end?
Witness for the prosecution
According to the President of the Greater Boston Association of Realtors, reporting that the median Single Family Home (SFH) price in Greater Boston had increased just 1.7% to $605,000 over the last 12 months, while the median condo price had slipped 4.1% to $549,000: “The seller’s market is likely over, or at least the balance has shifted. With sale prices having begun to stabilize, more homes and condos available for sale, and properties sitting on the market longer, home values have most likely peaked in many areas.”
Witness for the defence
According to a report from The Warren Group, in Massachusetts as a whole in September, the median SFH price rose 5 percent on a year-over-year basis to $399,000, but the real action was in the condo market, where the median price jumped 14.3% to $375,000.
Comment
Lies, damned lies and statistics was the first article I wrote for the Marblehead Reporter in 2008.The point I made then, and have repeated many times since, is that statistics can be distorted to suit the argument one is trying to make – rather like the way Opinion Polls slant questions to get the answer the sponsor wants.
In real estate I don’t believe there is an intent to mislead; I think it is often a writer quoting statistics without explaining them.
Having said that, the number one reason that I NEVER quote monthly statistics is that they can vary greatly and IMO are pretty meaningless.
Let’s look at Massachusetts sales to see if I can make my reason clear.
Our starting point is the comment that the median price in September (one month) increased 5% Year over Year (YOY) for SFHs and 14.3% for condos. We are using different sources for numbers (mine from MLS, Warren from public records, thereby including more sales) but the numbers for the month of September are quite similar. But look below at the monthly figures for July, August and September, followed by those for the entire quarter – Q3.
For SFHs the monthly increases are quite consistent.
But now look at condos. Note that I have high-lighted September 2018 when the median price was out of whack at just $340,085. The September 2019 median price was down from July and August but up sharply compared with September 2018 – which was an outlier.
So we look at the quarter – Q3 – and see that the median prices was up 3.2%, similar to the 2.8% for SFHs.
Confession time. I have statistics going back to 2000 for all 34 cities and towns in Essex County plus Essex and Middlesex Counties and Massachusetts. In all the years of keeping records the only time I have calculated a monthly statistic was – for this article.
Especially in New England, there is too much fluctuation even from quarter to quarter, in large part because of seasonality caused by….weather. To give another example, I worked with a seller in Watertown and he had a report from another Realtor showing that the median price had dropped by a large amount – something like 20% – for ONE MONTH and suggesting that prices would show a decline in coming months. By showing longer-term data I was able to persuade the seller that the one month figure was meaningless – and in fact the median price increased by double digits in the second half of the year.
So how is the market?
What was long ago called the $64,000 question, when $64,000 still bought something of value.
By now you will understand that I like to use quarterly data and – better yet – Year to Date as we get to 6 and 9 months.
Here’s another table:
For both SFHs and Condos the YTD increase is =/- 2.5% – and in each case Q3 was a little higher than that figure, not suggesting a slowing of the rate of price increases.
But…..MA is a very big place! And numbers for condo median prices are distorted because Massachusetts includes….Boston. In fact, the median price of condos in Boston has dropped 3.1% YTD meaning that excluding Boston the median price has actually increased by 4.6%.
Yes, I know, your head is spinning with all these numbers. And I will add one more. Note that the median prices quoted at the beginning for Greater Boston were $605,000 for SFHs and $549,000 for condos. Compare that with $399,000 for SFHs and $375,000 for Condos in the Warren Group report. In both cases the Greater Boston numbers are about 50% higher than for the State as a whole. The Boston and surrounding towns effect.
Conclusion
As I said nobody is trying to mislead the consumer (or home buyer or seller), but I repeat what I often say to people when they are shown a statistic:”tell me what that means”.
Even if numbers confuse you (and as a numbers wonk that is hard for me to believe….) there is no reason not to ask for an explanation, as they say in prospectuses nowadays, “in plain English.”
For detailed Q3 reports on Marblehead, Swampscott, Salem and Beverly, as well as a town-by-town summary for the 34 cities and towns of Essex County, click
Team Harborside Market Reports.
Andrew Oliver
Market Analyst | Team Harborside | teamharborside.com
REALTOR®
Sagan Harborside Sotheby’s International Realty
One Essex Street | Marblehead, MA 01945
m 617.834.8205
www.OliverReports.com
www.TeamHarborside.com
Andrew.Oliver@SothebysRealty.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
Essex County Q3 2019 Market Summary
[Click Q3 2019 Essex County Market Summary to download a copy of this report.]Single Family Homes (SFH)
The median price of the SFHs sold in the 34 cities and towns of Essex County in the first 9 months of 2019 (YTD Q3 2019) increased 3.7% to $477,000, with the rate of gain increasing in Q3. Sales YTD increased 3.2%.
Condos
The median price of Condos/Townhomes sold YTD Q3 2019 increased 5.4%, to $315,000. Sales were essentially flat.
Comment
While the overall inventory at October 1 represented just 2.1 months of supply ( a market is considered to be in equilibrium between buyers and sellers when there is 6 months of supply) the number varies widely by price: from just 1 month for SFHs under $750,000, 3 months from $750,000 to $1.5 million; and nearly 14 months at prices over $1.5 million.
Andrew Oliver
Market Analyst | Team Harborside | teamharborside.com
REALTOR®
Sagan Harborside Sotheby’s International Realty
One Essex Street | Marblehead, MA 01945
m 617.834.8205
www.OliverReports.com
www.TeamHarborside.com
Andrew.Oliver@SothebysRealty.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
Housing Inventory decline accelerates in October
After years of decline, the number of Single Family Homes (SFH) for sale in Essex County on the first of the month compared with a year earlier (YOY) increased from August 2018 until June 2019. Since then the decline has resumed and, in fact, accelerated, as this table shows:
Single Family Homes (SFH)
The next two charts (the first for January to June; the second July to December) show the number of SFHs for sale on the first of the month since 2016. The far right line in each column, representing 2019, shows the increase in the first half of the year followed by the resumption of the decline.
Condos
The number of condos for sale increased YOY from June 2018 until August 2019, while the last two months have shown just a modest decline. The condo market sees more supply in terms of new construction and conversions than does the SFH market.
Comment
I will publish a report this weekend analysing whether the decline in inventory is an accurate comment on the market or whether it reflects a faster pace of sales. The preliminary look at median prices for Marblehead and Swampscott for the 9 months to September show prices in both markets increasing by a little under 2%. The market continues to look stable, despite the daily barrage of headline-grabbing news.
Andrew Oliver
Market Analyst | Team Harborside | teamharborside.com
REALTOR®
Sagan Harborside Sotheby’s International Realty
One Essex Street | Marblehead, MA 01945
m 617.834.8205
www.OliverReports.com
www.TeamHarborside.com
Andrew.Oliver@SothebysRealty.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
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