Price Reductions Proliferate
In recent months there have been several reports of price reductions in some of the hottest real estate markets, such as Seattle.
This report shows the percentage of Single Family Homes (SFH) and Condos in Essex County which have experienced price reductions. In the 34 cities and towns in Essex County, 50% of the SFHs and 39% of Condos currently for sale have seen price reductions.
In a rising market, sellers will often try for “aspirational pricing”, meaning “I’d love to get XXXX”. It has been clear for some months that those days are, for the most part, in the rear view mirror.
Pricing a property at the realistic price rather than the aspirational one can speed up the sale process – without the need for a price reduction.
If you are thinking of selling, talk to your Sagan Harborside Sotheby’s International Realty agent and set the price correctly the first time.
Sagan Harborside Sotheby’s International Realty
www.SaganHarborside.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
Open Houses weekend October 20/21
A limited number of Open Houses this weekend:
Saturday
Marblehead Saturday Open Houses
Swampscott Saturday Open Houses
Salem Saturday Open Houses
Beverly Saturday Open Houses
Lynn Saturday Open Houses
Sunday
Marblehead Sunday Open Houses
Swampscott Sunday Open Houses
Salem Sunday Open Houses
Beverly Sunday Open Houses
Lynn Sunday Open Houses
Sagan Harborside Sotheby’s International Realty
www.SaganHarborside.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
New Listings week ending October 19
Here are the latest new listings:
Marblehead new listings
Swampscott new listings
Salem new listings
Beverly new listings
Lynn new listings
Sagan Harborside Sotheby’s International Realty
www.SaganHarborside.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
New Listings mid-week October 17
These are the latest new listings:
Marblehead new listings
Swampscott new listings
Salem new listings
Beverly new listings
Lynn new listings
Sagan Harborside Sotheby’s International Realty
www.SaganHarborside.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
Swampscott Q3 Report: Median Price nearing $600,000
[Click here to download a PDF of this report.]The median price of the Single Family Homes (SFH) sold in Swampscott in the first 9 months of 2018 increased 11% to a new record $590,000, while the median condo price, boosted by the new Avery development, increased 19% to $359,000.
SFH Median Price
Through the first 9 months the median price is up 11% from a year ago and 22% from 2017.
After 7 consecutive quarters when the median price exceeded $500,000, Q3 saw the first quarter above $600,000.
SFH Sales
Sales overall recovered somewhat from last year’s drop. The impact of rising prices can be seen by the fact that the proportion of sales under $500,000 dropped from 54% in 2016 to 39% in 2017 and to just 27% in 2018.
Reflecting strong demand and the shortage of inventory, half the sales YTD have taken place at or above list price.
SFH Inventory
As of October 1, overall inventory, while still very low, was quite consistent with the last two years in terms of supply at different price points.
Condos
Traditionally, the condo market in Swampscott has been split between the older developments around Vinnin Squarer and newer, oceanfront units on Humphrey Street. That has changed somewhat with the new Avery development of 42 condominiums on Essex Street. In the first 9 months of 2018, 11 units were sold in Avery at prices between $370,000 and $500,000. These sales added some $27,000 to the median price YTD and contributed to the jump in sales over $350,000 from 20% of the total in 2016 to 52% in 2018.
Reflecting strong demand, three-quarters of sales YTD have taken place at or above list price.
Comment
It took 15 years, until 2017, for the median SFH price to exceed the $517,300 recorded in 2015, but since then the median price has turned on the rocket boosters. The condo market has also seen strong demand, with the new development at Avery giving an upward thrust to the median price.
It remains to be seen if the recent jump in mortgage rates will serve to bring supply and demand more in line in the coming months.
Sagan Harborside Sotheby’s International Realty
www.SaganHarborside.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
Open Houses Sunday October 14
The Patriots play this evening so there is plenty of time to visit these Open Houses:
Marblehead Open Houses
Swampscott Open Houses
Salem Open Houses
Beverly Open Houses
Lynn Open Houses
Sagan Harborside Sotheby’s International Realty
www.SaganHarborside.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
Marblehead Q3 Report: Median Price reaches $700,000
[Click here to download a copy of this report.]The median price of the Single Family Homes (SFH) sold in the first 9 months of 2018 reached $700,000, a 7% increase year on year. Sales declined again, reflecting the shortage of inventory. (Numbers in bold represent record levels).
Median Price
The first chart shows the median price for the first 9 months of the year. The second one shows the quarterly median prices which tend to fluctuate, in part because Marblehead is a seasonal market, with most sales taking place in the second and third quarters of the year.Note that the median price has exceeded $700,000 in 4 of the last 5 quarters.
Sales
Lack of inventory has been a constant factor for some time and this is the prime reason that sales YTD are 20% lower than they were in 2016. The impact of rising prices can be seen by the fact that the proportion of sales under $600,000 dropped from 50% in 2016 to 39% in 2017 and to just 27% in 2018.
The combination of strong demand and low supply meant that about one-third of sales YTD took place at or above list price. This phenomenon was not limited to houses at the lower end. A house on Gregory Street sold for $260,000 more than its $1.9 million list price.
Current inventory
This chart shows the inventory as of October 1st for the last three years. While overall inventory is lower than it was in 2016, there has been an increase since 2017, and current inventory is the highest during 2018. Compared with 2016 there are fewer houses for sale between $600,000 and $1.5 million, and more between $1.5 million and $3 million. For those who like symmetry, note the repetition of the number 10 in current inventory.
Condos
The condo market in Marblehead is quite small and varies widely from purpose built harborside condos to the conversion of former 2 and 3 family buildings. The combination of a varied market and a small number of sales can lead to fluctuations in the median price, but overall the condo market in Marblehead has been quite consistent in the last two years.
Note, however, that as a reflection of demand, almost 4 in 10 of YTD sales took place at or over list price:
Comment
The numbers confirm that the median price of the SFHs sold in Marblehead in recent years has shown steady, but not outrageous, increases. As the year has progressed, supply has increased, as have mortgage rates. These two factors may help to bring supply and demand into better balance in 2019.
Sagan Harborside Sotheby’s International Realty
www.SaganHarborside.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
Marblehead Q3 2018 Housing Market By The Numbers
[Click here to download a copy of this report.] The median price of the Single Family Homes (SFH) sold in the first 9 months of 2018 reached $700,000, a 7% increase year on year. Sales declined again, reflecting the shortage of inventory. (Numbers in bold represent record levels).
Condos
Overall the condo market in Marblehead has been quite consistent in the last two years.
Note, however, that almost 4 in 10 of YTD sales took place at or over list price.
Sagan Harborside Sotheby’s International Realty
www.SaganHarborside.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
Open Houses weekend of October 13/14
The Patriots play on Sunday evening so there is plenty of time to visit these Open Houses:
Saturday
Marblehead Saturday Open Houses
Swampscott Saturday Open Houses
Salem Saturday Open Houses
Beverly Saturday Open Houses
Lynn Saturday Open Houses
Sunday
Marblehead Sunday Open Houses
Swampscott Sunday Open Houses
Salem Sunday Open Houses
Beverly Sunday Open Houses
Lynn Sunday Open Houses
Sagan Harborside Sotheby’s International Realty
www.SaganHarborside.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
New Listings week ending October 12
Here are the latest new listings:
Marblehead new listings
Swampscott new listings
Salem new listings
Beverly new listings
Lynn new listings
Sagan Harborside Sotheby’s International Realty
www.SaganHarborside.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
New Listing Mid-Week October 10
A quiet week so far for new listings:
Marblehead new listings
Swampscott new listings
Salem new listings
Beverly new listings
Lynn new listings
Sagan Harborside Sotheby’s International Realty
www.SaganHarborside.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
Open Houses Sunday October 7
Here are today’s Open Houses:
Marblehead Open Houses
Swampscott Open Houses
Salem Open Houses
Beverly Open Houses
Lynn Open Houses
Sagan Harborside Sotheby’s International Realty
www.SaganHarborside.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
Mortgage rates head for 5%
The yield on the US 10 year Treasury Note (10T) jumped sharply in the later part of the past week, a move which will cause the 30 year Fixed Rate Mortgage to move up again in the coming week, approaching 5%.
What drives mortgage rates?
The Federal Reserve (Fed) raised the Fed Funds (FF) rate again recently, the 8th increase since December, 2015
While changes in the FF rate (the rate at which banks lend overnight money to each other) claim the headlines, the 30 year Fixed Rate Mortgage (FRM) rate is set by the market and is a based on the yield investors in mortgage- backed securities demand over what they can earn from the US 10 year Treasury Note (10T).
Let’s look at some numbers. In the chart below, the first column shows the FF rate on the date of the increases. The second and third columns show the yield at that time on the 10T and FRM.
The second chart shows the spread (difference in yield) between FRM and FF on the left, and between FRM and 10T on the right. The consistency of the second column illustrates the link between the 30 year mortgage rate and the yield on the US 10 year Treasury Note.
What rates are influenced by the FF rate?
Banks respond to increases in the FF rate by raising their Prime Rates. This in turn influences the rates on such things as credit cards and auto loans, as well as home equity lines of credit. Adjustable rate mortgages (ARM) also move up with increases in short-term rates, especially the 1 year Treasury bill.
Where are rates heading?
Part of the reason for the increase in bond yields last week was the statement from the Chairman of the Federal Reserve that the current FF rate was “a long way from neutral”, a statement interpreted by the bond market as confirming that the FF rate may increase by another 1% over the next year. With the economy currently growing strongly and very low levels of unemployment, the bond market fears that inflation will pick up. With higher inflation levels, investors will demand higher yields from Treasuries. And this comes at a time when the Budget Deficit is jumping, a deficit that needs to be funded by selling more Treasuries.
Background Reading
Here are two articles I have written. The first is from October 2018:
Why mortgage rates may be headed upwards – finally
And this one from February 2018:
What will happen to Home Prices in the Experimental Economy?
Sagan Harborside Sotheby’s International Realty
www.SaganHarborside.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
New Listings week ending October 5
Here are the latest new listings:
Mareblehead new listings
Swampscott new listings
Salem new listings
Beverly new listings
Lynn new
Sagan Harborside Sotheby’s International Realty
www.SaganHarborside.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
Open Houses weekend of October 6/7
Here are the Open Houses for this Columbus Day weekend:
Saturday
Marblehead Saturday Open Houses
Swampscott Saturday Open Houses
Salem Saturday Open Houses
Beverly Saturday Open Houses
Lynn Saturday Open Houses
Sunday
Marblehead Sunday Open Houses
Swampscott Sunday Open Houses
Salem Sunday Open Houses
Beverly Sunday Open Houses
Lynn Sunday Open Houses
Sagan Harborside Sotheby’s International Realty
www.SaganHarborside.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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