Million Dollar Home Sales
The first half of the year saw a modest increase in Million Dollar Home Sales in Essex County.
The second half of the year generally sees higher sales. So far in July there have been 20 completed sales with 57 more pending.
Here is a breakdown of sales by price:
Source: MLS, Oliver Reports
And finally the leading towns for sales year to date:
Two Saturday Marblehead Waterfront Open Houses
Saturday sees two Marblehead Waterfront Open Houses. Click on One Harborfront and One Oceanfront for details. (more…)
Goldthwait Open Houses: Beach house or new construction?
Three Open Houses today, in the much sought after Goldthwait area of Marblehead. Choose from new construction on the corner of Atlantic Avenue (1:30 – 3:00 p.m.) or a Marblehead Beach House (1:00-3:00 p.m.) with stunning views from Marblehead Harbor to Plymouth. (more…)
Open Houses and Market Reports July 17
Here are today’s Open Houses:
Source: andrewJoliver.com
I have published mid-year reviews for these four markets:
Marblehead Mid-Year Report: median price up 4%
Swampscott Mid-Year Review: median price up 10%
Salem Mid-Year Review: Condo Market sizzling
Beverly Mid-Year Housing Review: 9% price increase (more…)
Beverly Mid-Year Housing Review: 9% price increase
After breaking through the $400,000 level for the median price* of a Single Family Home (SFH) in 2015 for the first time, the first half of 2016 saw a sharp 9% increase to a new high of $438,250.
In my Q1 review I wrote:”The median SFH price in Beverly is around $400,000. A year ago there were 19 houses available below this level, but today there are just 7. A similar pattern is seen in condos, where the median price is around $250,000. The number of condos for sale below this level is half that of a year ago.”
The reduction in inventory of lower-priced houses continues and is detailed later in this report. At some point, when demand exists as it does today, the lack of inventory at lower prices will translate into higher prices, as it now has in Beverly.
Low inventory + low mortgage rates + buyers looking = higher prices.
The condo market has also seen shrinkage in inventory at lower prices, although as yet this has produced only a 4% increase in the median price. (more…)
New Listings week ending July 15
A quiet week for new listings, leaving inventory very similar to that of a week ago:
Source: andrewJoliver.com
Mortgage Rates: Keep Calm and Carry On
Last week in my report Mortgage rates drop again – where next? I showed the historical relationship between the yield on the US 10 year Treasury (10T) and the 30 year Fixed rate Mortgage (FRM), and said there were two reasons I did not expect the FRM to drop as far as that relationship would imply: the safe haven status of 10T,which caused strong buying of Treasuries, and the desire by banks to boost their profit margins.
This week, as markets decided to
we saw the yield on the 10T drop quite sharply, but little change in the FRM.
What happened?
In simple terms, as the fear factor receded, so did buying of 10T as a safe haven. In fact, 10T saw selling and the yield increased from 1.37% last week to 1.56% this week. With the FRM at 3.42%, up slightly from 3.41% last week, the spread – or difference between the two – dropped from over 2% to under 1.9%.
Where are mortgage rates headed?
While the spread between 10T and FRM is still higher than the average of around 1.7% in recent years, two other factors – the desire by banks to increase profits where they can in a low-interest rate environment, and the absence of buying of Mortgage-Backed Securities (MBS)* by the Federal Reserve – suggest that mortgage rates may well stabilize around these levels for the forseeable future.
*Conventional mortgages are placed into pools and sold to investors as MBS. The yield investors require is based upon the yield on the 10T, but in recent years the Federal Reserve was also an active buyer of MBS. This buying had the effect of driving down the yield asked for MBS and hence kept mortgage rates low. The Federal Reserve ended its direct MBS buying program in late 2014. (more…)
Salem Mid-Year Review: Condo Market sizzling
Condo sales have sizzled this year, up 45% in the first half from a year ago, and up 60% over the average for the first half for the last 5 years. Current inventory represents less than 2 months of supply based on sales in the second quarter, and is about equal to the number sold in the month of June alone.
Median prices* have not – at least as yet – responded to this imbalance between supply and demand, with a modest increase of just under 4% in the first half to $280,000, a new record for the first half (the highest annual median price is$279,000 in 2005, so there is a good chance that 2016 will set a new record high.)
Sales of Single Family Homes (SFH) also jumped sharply, up 30% from a year ago, and almost matched the prior high. The median price of a SFH increased 6.5% to a new record of $380,000 (the highest annual median price is $349,450 in 2015, so it looks certain that 2016 will see that record well beaten.) (more…)
Swampscott Mid-Year Review: median price up 10%
The main feature of the first half was a 10.5% increase in the median price of a Single Family Home (SFH) to $491,500.
For the last year I have been highlighting the shortage of inventory in Swampscott, especially at the lower end. In my 2015 mid-year review I wrote: “Of the 47 SFHs for sale today just 7 are listed below $445,000, the median sales price for the first half of 2015. And only 11 are below $500,000.” And in my review of this year’s Q1 I added:”The big story is the shortness of inventory compared with a year ago. The number of SFHs for sale under $500,000 is just 5 compared with 19 a year ago. Overall inventory for both SFHs and condos is about half that of a year ago.”
Low inventory + low mortgage rates + buyers looking = higher prices.
The condo market has seen an extraordinary shrinkage in inventory, with only 10 condos currently for sale – and 4 of those are over $1 million.
A breakdown of current inventory is shown further on in this report. (more…)
Open Houses July 10
It looks as though the rain will hold off today so plan to visit these Open Houses and take advantage of the recent drop in mortgage rates, as highlighted in Mortgage rates drop again: (more…)
Mortgage rates drop again – where to next?
Immediately following Brexit I wrote What Brexit means for the housing market. The key point I made is that any near term increase in interest rates in the US was now off the table. This week we have seen the Freddie Mac 30 year Fixed Rate Mortgage (FRM) drop to 3.41%.
US unemployment rates and bond yields
On Friday, the employment report showed a sharp recovery from May’s swoon, yet bond yields did not jump as might be expected. The main reason is that despite the sharp fall in the yield on US 10 year Treasury (10T), that yield remains above that of all other major counties, attracting foreign buying. The following table shows those yields for the last 2 1/2 years:
Source: Bloomberg
Additionally, despite the headline unemployment rate of under 5%, there are actually three measures of unemployment. U3 is the official unemployment rate. U5 includes discouraged workers and all other marginally attached workers. U6 adds on those workers who are part-time purely for economic reasons. While U6 has come down in recent years it is still close to 10%.
www.macrotrends.net
What drives mortgage rates?
As a reminder, the Federal Reserve can only directly impact short-term rates, such as those on credit cards, auto loans and home equity loans (HELOCs). The 30 year FRM is based upon market interest rates, most notably for the US 10 year Treasury (10T) – which is generally viewed as a better barometer of how the market views prospects for the US economy.
When the Fed finally – and too late – increased short-term rates last December ( and talked of 4 more rate increases) the yield on the 10T was 2.26%. That yield has now dropped to under 1.4%. Note that despite the US being seen as a safe haven, the yield on 10T has consistently been higher than that of other countries’ similar debt, one of the reasons the dollar has been so strong.
The FRN does not move in lock step with 10T because of the safe haven status of the dollar, meaning that in times of political upheaval investors buy US Treasuries as a “safe haven”. Over the last 3 1/2 years the average FRM has been about 1.7% higher than 10T. With 10T at 1.4%, that would imply a 3.1% FRM, but…. part of the reason for the low 10T yield is geopolitical, so I would not expect the FRM to drop that far, unless the 10T yield stabilizes at this level.
Another factor in keeping mortgage rates higher than might be expected is the fact that, at a time of pressure on profits, banks are keen to increase their margins on mortgages, especially when rates are low and the housing market strong.
Comment
I know this may be getting a bit complicated or a real estate blog. A quick and easy way to stay informed is to read the posts on my blog under the Mortgage Rates and Forecasts tab. Here is a link to it: Oliver Reports: Mortgage rate forecasts
Even just reading the summaries will give you a good feel for what has been happening.
If you are considering selling your home please contact me on 617.834.8205 or [email protected] for a free market analysis and explanation of the outstanding marketing program I offer.
Read Which broker should I choose to sell my house?
If you are looking to buy, I will contact you immediately when a house that meets your needs is available. In this market you need to have somebody looking after your interests.
Andrew Oliver is a Realtor with Harborside Sotheby’s International Realty. Each Office Is Independently Owned and Operated
@OliverReports
Marblehead Mid-Year Report: median price up 4%
Sales of Single family Homes (SFHs) were remarkable consistent for the fifth year in a row, while the median price increased nearly 4% to a new high for the first half of the year of $595,000. Variations between Q1 and Q2 reflect the mix of sales I highlighted in my Marblehead home prices set record in 2016 First Quarter report.
The condo market saw an increase in sales, while the median price reflected a swing in sales from a majority in 2015 taking place under $250,000 to a majority in 2016 occurring above $350,000. (more…)
New Listings and current inventory
This week I am adding a table showing current inventory along with the week’s new listings:
Source: andrewJoliver.com (more…)
Mid-Year housing inventory down sharply
Preliminary data (a lot of sales scheduled to close by 6/30 have not been entered into MLS as yet) suggest that sales were up 14-20% in Essex County and Massachusetts in the first half of the year, and median price up 3-4%. The following table shows current inventory for local towns, Essex County and Massachusetts as a whole. The highlighted last column shows the change from a year ago. There are some huge changes, all showing lower inventory.
If you are considering selling your home please contact me on 617.834.8205 or [email protected] for a free market analysis and explanation of the outstanding marketing program I offer.
Read Which broker should I choose to sell my house?
If you are looking to buy, I will contact you immediately when a house that meets your needs is available. In this market you need to have somebody looking after your interests.
Andrew Oliver is a Realtor with Harborside Sotheby’s International Realty. Each Office Is Independently Owned and Operated
@OliverReports
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