Marblehead Q3 Housing Report: prices break through $700,000

The median price of a Single Family Home (SFH) exceeded $700,000 for the first time in the third quarter. YTD the median price increased 7% to a new high of $656,000. With most of Q4 sales already under agreement, it is quite likely that the median price will exceed $700,000 for the second half of the year. Sales were down slightly YTD, a consequence of the low inventory all year.

Median Price
After a sequence in which the median exceeded $600,000 in 8 of 11 Quarters, the median price broke through $700,000 in Q3.

Sales by Price
In the first 9 months of 2015 there were 83 sales under $600,000 and in 2016 there were 93 such sales, but in 2017 that number dropped to just 66. As more sales took place above $600,000, so the median price moved up.

Sales at or above List Price
The percentage of sales taking place at or above the List Price has been increasing in the last two quarters. In Q1, the largest “over” sale was $30,000 on a listing in the $300,000s. In Q2, two houses sold at $80,000 and $70,000 “over” from list prices of $650,000 and $740,000.  And in Q3 we had two sales for almost $100,000 “over” from list prices of $800,000 and $1 million.

SFH Inventory
Inventory has been declining over the last two years. Note that most of the decline is at the “lower” levels: once prices get above $1 million, inventory has been quite steady.

Condos
Marblehead has a small condo market and one which varies from waterfront purpose-built condos to conversions of former apartments. As such, the median price can and does fluctuate from quarter to quarter depending upon the mix of sales. What is notable is that nearly half the sales this year to date have taken place at or above the list price. The median price was $354,500, 5% lower than last year’s record $370,000.

Comment
The housing market in Marblehead seems to have reached something of a stalemate, at least under $1 million. Many buyers are despairing that they will find a house they want to buy, while sellers are holding off because they, too, cannot find a house to buy. The consequence is that when a desirable house does come to the market there is a bidding battle. And that leaves the unsuccessful buyers frustrated, whereupon some of them decide to stop looking.
In contrast, buyers still have the upper hand at higher price points.