So how does the Housing Market look after Labor Day?
After a summer which saw the highest number of sales of SFHs in Marblehead since 2004, where does the market stand after Labor Day?
Here are a few thoughts and, of course, numbers: (more…)
Housing Inventory heading into Fall: a surprise
I started to write this article intending to talk about the increase in supply we have seen in recent weeks and how the housing market was getting back into equilibrium between buyers and sellers, a situation achieved when supply reached 6 months. But a funny thing happened as I worked through the numbers. Take a look at this table: (more…)
Marblehead leads the way in Million Dollar sales in Essex County
I have reported in recent weeks that Million Dollar plus sales, including pending sales, will set a record in Marblehead this year, while in Swampscott such sales are lagging. This week I have looked at the whole of Essex County. (more…)
Closing in on peak prices
The overall housing market is very close to peak levels, which generally occurred in 2005. For both Essex County and Massachusetts as a whole the median price in the first half of 2014 was just 3% below the 2005 peak. (more…)
Million dollar homes sales in Essex County – better, but still below peak
Million dollar home sales in Essex County continue to recover from their Great Recession lows, but are unlikely to approach the level of the boom years of 2005-2007. (more…)
Pending home sales reach record in May
The Massachusetts Association of Realtors (MAR) issued a report this week Future Indicators showing that pending sales of single family homes (SF) in Massachusetts in May were the highest for any May since records started in 2004, while pending sales of condos were second only to those in May 2005.
After the brutal winter we endured, it is not surprising that buyers emerged with gusto when the weather finally broke.
I can imagine that one of the most frustrating things for a journalist must be seeing a headline for an article which conveys a misleading impression (in general journalists write the story while the headline is written by somebody else). Thus the headline on this article is, in part: Price and Market Confidence Index down.
On reading the article, the median price for SFHs increased in May by 7.4% in May while that for condos was up 8.6%. So to what does the headline apply?
“As more inventory starts to make its way to the market, REALTOR®-member confidence that prices will continue to go up isn’t as strong as it has been,” said Ruffini. “However, buyer demand is strong based on pending sales and hopefully that should start to push the REALTOR® Market Confidence Index up in the coming months.”
Note that this refers to those Realtors who responded to a survey. It does not say that those Realtors think prices are not going up; just that they are not as strongly convinced as they were at this time last year. Since Realtors in general are independent contractors working alone I always suspect that such surveys are more a reflection of that Realtor’s personal business pipeline than a considered, research- driven analysis of the economy and real estate trends.
We have seen a number of press headlines in recent months suggesting that prices are going up more slowly than they were a year or so ago. Suppose prices last year went up from $400,000 to $440,000. That’s a 10% increase. Now let’s assume they go up by $40,000 again this year. Because the denominator is now bigger ($440,000 rather than $400,000) the increase this year is “only” 9%. So the headline writer will say: “price increase slowing.”
A primary goal of my articles is to help buyers and sellers of real estate understand what is really happening. When you see articles about real estate, go past the headline and read the actual reports. And then use common sense. And then you will know “the rest of the story.” And you can always ask me!
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].
Andrew Oliver is a Realtor with Harborside Sotheby’s International Realty
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
Housing inventory remains tight heading into Spring
With Spring rumoured to be coming soon (please!) here’s a look at the inventory awaiting buyers.
First Single Family Homes (SFHs). Although supply is a little higher than a year ago in actual numbers, it is slightly lower in terms of months of supply because the rate of sales increased over the last year. For the whole of Essex County supply is just under 3 months, or half the level regarded as a market in equilibrium between buyers and sellers.
The cold winter not only kept buyers indoors but also made it more difficult for sellers to get their houses ready for sale. The economy is improving, albeit still slowly, economic confidence seems to be improving, the stock market is at a high, and the likelihood is that mortgage rates will increase. Coupled with growing awareness that home prices are improving, I believe that 2014 could be a strong year for home prices on the North Shore. (more…)
Housing inventory: spring is coming, right?
Two years ago the month of February saw just one day when the temperature was below freezing. This year….well you know what’s it been like, hibernation for most of the month. Statistics for sales at this time of year are, therefore, largely meaningless.
Instead, I have been looking at the supply of houses and condos for sale and comparing numbers with a year ago, which was also a cold month if not quite as brutal as this year.
We are assured that it will warm up one day, if not soon. With signs that the economy continues to improve, if slowly, it seems quite likely that spring, if and when it comes, will find buyers chasing limited inventory, again, and that prices, certainly at the lower end, will continue the improvement of 2013.
Here is the inventory by price for Marblehead, Beverly, Salem, Swamspcott and Essex County overall. (more…)
Beverly 2013 Housing Review and 2014 Outlook
The Boston Globe named Beverly one of Greater Boston’s “top spots to live” and the real estate market in 2013 reflected this with very tight supply and hot competition for houses.
According to Brad Phillips, Partner/Managing Broker of Harborside Realty’s Beverly office: “homes that were well priced…sold quickly and often with multiple offers” and he expects “more of the same” in 2014.
My inventory reports last year consistently showed Beverly as one of the markets with lowest supply. Low inventory is “the singe largest factor we are dealing with”, says Phillips. “They are plenty of willing, qualifies buyers out there… but there are simply very few choices.”
While sales last year were close to peak levels overall, the median price in Beverly for a Single Family Home (SFH) was still 8% below peak levels. The law of supply and demand suggests that 2014 may well see prices move close to the 2004 peak.
Let’s look at the numbers and charts.
First, sales.
Source: MLS, Oliver Reports
Total sales were just 8% below peak levels. The number distressed sales- foreclosures and short sales – was steady. Non-distressed sales have increased 37% in the last two years.
- Source: MLS, Oliver Reports
Median price: after holding mostly in the $320-350,000 range for several years, the median price moved firmly above $350,000 during 2013.
Source: MLS, Oliver Reports
On an annual basis, the median price increased just 2%, although this seems to reflect the price mix of sales, i.e. more sales at lower price points.
Source: MLS, Oliver Reports
One of my consistent themes is that the ratio (ASR) of Assessed Value (AV) to Sales Price (SP) can give a good indication of what is happening to underlying prices. If the ASR is above 100% that means that properties are selling for less than their AV. Conversely, properties selling above their AV will have an ASR below 100%.
As we all hope our properties are worth more than the AV we look for an ASR below 100% as a positive sign. Remember that AVs are a lagging indicator: the tax bills for FY2014 are based on actual sales in 2012. Thus the 2013 sales data, reported in this review, will be the basis for FY2015 assessments.
What this means is that in a period of falling prices the ASR is likely to be rising. The ASR is the AV divided by the SP: if the SP is falling (prices going down), the ASR will rise. And when prices are rising, when the SP is rising, the ASR will fall.
So what we, as homeowners, want is an ASR below 100% and falling. Let’s look at the ASR for Beverly SFHs in recent years:
Source: MLS, Oliver Reports
As we can see the ASR has been falling, an indication that prices have been rising. Note that while the median price increased only slightly in 2013 the ASR dropped from 98.6% to 92.5%, suggesting a larger underlying price increase, with the sales mix accounting for the difference.
2014 Outlook
Beverly has been working to improve and modernize its schools. A new middle school is in the planning stages and Phillips says:”this will be the last piece of the puzzle that will provide Beverly students with completely modernized, state of the art facilities.”
Beverly is a vibrant and exciting city. A tight housing market and strong demand suggests that prices will increase overall in 2014.
See also my Beverly 2013 Condo Market Review
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 [email protected].
Andrew Oliver is a Realtor with Harborside Realty in Marblehead
Brad Phillips is the Partner/Managing Broker of Harborside Realty in Beverly and can be reached at 978.884.4823 or [email protected]
Beverly Condo Market 2013 Review and 2014 Outlook
The Boston Globe named Beverly one of Greater Boston’s “top spots to live” and the real estate market in 2013 reflected this.
Apart from two years of extraordinary sales activity in 2004 and 2007, overall condo sales in Beverly in 2013 were within about 10% of prior levels. The median price increased 7% in 2013 and was 11% below the 2005 peak.
Let’s look at the numbers.
First sales.
Sources: MLS, Oliver Reports
Distressed sales – foreclosures and short sales – dropped sharply in 2013, and non-distressed sales increased nearly 90% over the last two years.
Source: MLS, Oliver Reports
The last three quarters of 2013 saw a steady move in the median price above the $220,000 level:
Source: MLS, Oliver Reports
In the next table the number in bold shows the highest quarterly median price each year. Note that this varies from year to year, so the fact that the median price in Q3 and Q4 was lower than in Q2 has no significance.
Sources: MLS, Oliver Reports
One of my consistent themes is that the ratio (ASR) of Assessed Value (AV) to Sales Price (SP) can give a good indication of what is happening to underlying prices. If the ASR is above 100% that means that properties are selling for less than their AV. Conversely, properties selling above their AV will have an ASR below 100%.
As we all hope out properties are worth more than the AV we look for an ASR below 100% as a positive sign. Remember that AVs are a lagging indicator: the tax bills for FY2014 are based on actual sales in 2012. Thus the 2013 sales data, reported in this review, will be the basis for FY2015 assessments.
What this means is that in a period of falling prices the ASR is likely to be rising. The ASR is the AV divided by the SP: if the SP is falling (prices going down), the ASR will rise. And when prices are rising, when the SP is rising, the ASR will fall.
So what we, as homeowners, want is an ASR below 100% and falling. Let’s look at the ASR for Beverly condos in recent years:
Source: MLS, Oliver Reports
The drop in the ASR in 2013 matched the increase in median price and suggests that the price range of sales was consistent between 2012 and 2013.
Outlook for 2014
Beverly has been working to improve and modernize its schools. A new middle school is in the planning stages and Brad Phillips, Partner/Managing Broker of Harborside’s Beverly office says: “this will be the last piece of the puzzle that will provide Beverly students with completely modernized, state of the art facilities.”
Beverly is a vibrant and exciting city. A tight housing market and strong demand suggest that prices will increase overall in 2014.
See also my Beverly 2013 Housing Market Review
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 [email protected].
Andrew Oliver is a Realtor with Harborside Realty in Marblehead
Brad Phillips is the Partner/Managing Broker of Harborside Realty in Beverly and can be reached at 978.884.4823 or [email protected]
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