A Year End Perspective
One of the recurring themes of 2013 has been the shortage of supply of homes for sale, accompanied by wondering when sellers would re-enter the market in larger numbers. The latter question often comes with a reference to the fact that prices have risen, say 10%, in the last year.
Well here’s another thought, one which may not be encouraging for those waiting for supply to pick up before they buy. For most of us, our home is our largest asset. When we believe that its value is increasing we feel good about spending generally and borrowing money to do so.Conversely, during the period when prices were falling, we felt poorer and were less willing to spend.
While home prices are now recovering, they are still below levels of 2006/7, whereas the stock market is at an all- time high.
Many people are feeling a little more secure in their jobs and in their personal finances, but believe their homes are still not worth what they once were – and they are not selling unless they need to move or are trading up or down.
In Marblehead, the median price for 2013 is likely to be the highest since 2007, but still 8-9% below the peak level of 2005/06. 8-9% may sound like a small number but it translates into $50,000 – and that’s real money. And when you read forecasts that prices may rise by “only 5%” in 2014, that’s still $25,000 or more.
The law of supply and demand applies to the housing market. As we approach 2014 it seems that demand is likely to remain strong, while there is no sign that supply is about to increase.Currently there are just 55 homes for sale in Marblehead with only half of those under $1 million.
And that means that prices are likely to rise again.
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.
Andrew,
It appears from your 10/5 Marblehead Reports that there were 89 properties for sale at that time. Has the inventory dropped that dramatically in the meantime, or by “55 homes” do just houses, excluding condos?
Either way, that’s an enormous change in inventory. In your 10/5 table, it indicates that there have been 214 sales under $1 million in the last twelve months, and only 25 above that number. If inventory at the low end has fallen below 30 homes from 46 in two and a half months, it sounds like a great time to be a seller in that price range indeed.
The above $1 million market seems to have changed even more dramatically, with only 25 sales above that price in the trailing 12 months, but something like 60 or 70% of that number selling in the last two and half months (43 homes dropping to something above 28, exclusive of new listings).
With such rapid changes, what do you predict we will see next?
Andy
Andy: thanks for your questions which I shall try to answer:
1. The inventory of SFHs has dropped from 89 to in fact 54 today (1 more went under agreement yesterday).
2. The number available under $1 million has dropped from 46 to 28 and I agree that it is a great time to be a seller in this price range.
3. The number available above $1 million has dropped from 43 to 26. There have been 5 sales since October with a further 8 pending, but many of these were already pending in October. Part of the drop in supply is caused by the withdrawal of 15 homes from the market.
Supply is trickier to gauge at the higher end as many of these houses, if unsold, are withdrawn over the winter months. It is fair to say, however, as I reported last week, that there has been increased activity at the higher end in recent months and I would expect that to continue in 2014.