Marblehead: median list price $995,000; median sale price $532,000

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The median list price of Single Family Homes (SFHs) in Marblehead currently available for sale is $995,000, whereas the median price of SFHs sold in the first 8 months of 2013 is just $532,000. Why the difference?

First the inventory numbers. It is very clear just how short of inventory the market is under $750,000 and under $500,000 in particular. These numbers were as of September 1st. This shortened week saw 4 more houses under $500,000 receive an accepted offer (including one that was listed this week), so there are now just 6 SFHs available in Marblehead under $500,000. And 106 have sold in the last year. Wow!

It is generally accepted that a market in equilibrium between buyers and sellers is one with six months of supply available. If that were the case in the market under $500,000, Marblehead would have 53 houses  for sale. We have just 6.

Marblehead SFH Supply Source: MLS, Oliver Reports

Marblehead SFH Supply
Source: MLS, Oliver Reports

So why the difference between the median sales price and median list price? Because sales at the higher end are extremely slow. Normally, as the market improves buyers locally move up. While there is some of that this year, we are not seeing any of this buying reach the upper end. There are 44 SFHs for sale over $1 million and 17 of those are over $3 million.

One thought. I have pointed out before that the median price of a total market can be influenced not just by the prices at which properties sell, but also by a change in the percentage of sales at different prices. In late 2011 and early 2012, for example, there was a sharp increase in the number of sales in Marblehead at lower prices and the median price of the overall market fell.

We are now seeing fewer properties available at the lower end, but the very small number of sales at the higher end has the effect of keeping the median price down. Unlike 2011-12, however, the median price of the overall market is still going up. For the first 8 months of this year it was $532,000, up 7% from $499,000 in 2012.

The question is this: is the weakness in sales at the higher end giving a falsely low message about pricing at the lower end of the market? In the first 8 months of 2013 there were 73 sales under $500,000. One-third – 24 – sold ABOVE list price. There is clearly very strong demand – and very little supply – in this price range. And the laws of supply and demand suggest that there is only one way for prices to move – up.

Perhaps not surprisingly, the shortage of supply at the lower end has contributed to  increased activity in condos. Whereas just 12 condos sold in the first half of the year, 13 sold in July and August and a further 10 are pending. There are currently just 19 condos available for sale in Marblehead, 11 below $500,000 and 8 above.

 

If you are considering buying or selling a home and have questions about the market and/or current home prices, feel free to contact me on 781.631.1223 or andrew@HarborsideRealty.com.

Andrew Oliver is a Realtor with Harborside Realty in Marblehead.