Essex County Mid-Year Housing Review
In the first half of 2015 the median price of a Single Family Home (SFH) increased slightly, while sales were basically flat, despite the low inventory. Distressed sales – foreclosures and short sales – were steady year on year, but are way down from the levels of 2010-2012.
Median Prices
The median price for the first half of 2015 was $385,000, up from $380,000 in 2014, and close to the 2005 peak of $390,000..
Source: MLS, Oliver Reports
The next table shows prices and changes since 2010. 2011 was one of just three years in the last 15 when the first half median price was greater than the second half.
Source: MLS, Oliver Reports
Outlook for Q3
The vast majority of houses that will sell in Q3 are already sold or currently under agreement. In total there are 2,161 such SFHs and the median list price of them is right on $400,000. With sales taking place on average at a discount of about 2% to list price it seems that the median price for Essex County in Q3 will be around $395,000. It looks as though for 2015 overall we will get very close to the 2005 peak of $394,400.
Sales
Sales of SFH were flat in the first half of the year. While sales have recovered from the slump during the Great Recession they remain below the levels of 2003-2005. Second half sales have, however, been strong for the last two years and the level of pending sales suggests that Q3 this year will show a significant increase over 2014.
Source: MLS, Oliver Reports
Distressed sales
Distressed sales – foreclosures and short sales – reached around 15% of total sales in 2010-2012, but since then have dropped to around 5-6%.
Source: MLS, Oliver Reports
Non-distressed sales
While total sales increased 9% from 2012 to 2014, non-distressed – or normal – sales increased by 20%, or by 900 units:
Source: MLS, Oliver Reports
Impact of distressed sales on median prices
In general distressed sales take place at a significant discount to non-distressed, or normal, sales. Including distressed sales in median price statistics does, therefore, distort the reported median price of non-distressed properties, which is why I exclude distressed sale from all my median price statistics.
Inventory
Perhaps the biggest story of 2015 has been the continuing shortage of inventory. Here’s the month by month comparison for 2015 with 2014:
Source: MLS, Oliver Reports
But the inventory shortage is far greater when we look back to 2006-07. Current inventory is only about one-half of what is was then:
Source: MLS, Oliver Reports
And here is the current inventory by price compared with a year ago. Note the declines under $700,00 and over $1.5 million.
Source: MLS, Oliver Reports
Summary
Overall, the market in Essex County was fairly stable in the first half of the year in terms of both prices and sales.
The winter weather impacted the market in two ways this year: keeping buyers indoors, and creating the need for repairs which caused a delay in listing for some houses. With the reduced inventory, it was notable that sales equaled 2014’s level in the first half.
The housing market in Essex County is basically quite healthy: houses are selling, but prices are not spiraling upwards, and there are choices available to buyers.
If you – or somebody you know – are considering buying or selling a home and have questions about the market and/or current home prices, feel free to contact me on 617.834.8205 or [email protected].
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Andrew Oliver is a Realtor with Harborside Sotheby’s International Realty. Each Office Is Independently Owned and Operated
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