What happened in Swampscott in 2005?
While housing markets in Boston and places like Cambridge have been hitting new highs for the last 2-3 years, it takes time for higher prices to ripple further out. When the final numbers are tallied, the median price in Essex County in 2015 will be within about 1% of its peak, with many towns already reaching new highs. In Swampscott, however, the median price is still 11% below its peak, leading me to ask: what happened in Swampscott in 2005?
Price mix of sales
Only a very small percentage – 5% or less – of SFHs change hands each year, so while the median price of those that do sell can and does provide a good indication of the market, there is always the possibility that sales in any year will not be reflective of the overall housing market. It is for the same reason that we see quarterly fluctuations in median prices when sales in any quarter are skewed to a particular price range. These fluctuations do, however, tend to even out over time.
I looked at the sales in Swampscott for 2005 and compared them with the years either side. This is what I found: the biggest difference was that sales under $400,000 – which were 34% of the total in 2004 and 39% in 2006 – were only 20% in 2005. Conversely, sales over $500,000 were 53% in 2005, compared with only 35% in 2004 and 34% in 2006.
My conclusion is that 2005 was an outlier in terms of its sales mix. Had 2005 seen a more normal mix of sales, then the median price would have been somewhere in the mid $400s and we would now be talking of a market close to its previous peak.
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 Andrew.Oliver@SothebysRealty.com.
Andrew Oliver is a Realtor with Harborside Sotheby’s International Realty. Each Office Is Independently Owned and Operated
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