With October sales data just released, we are continuing to see clear signs of the Greater Boston real estate market (and national market) improving. Let's jump right in to the stats:
| Single Family Sales for October | 2009 |
2008 |
Change |
| Sales | 727 |
703 |
3.4% |
| Median Price | $400,500 |
$405,000 |
-1.1% |
| Days on Mkt |
104 |
117 |
-13 days |
| Pending Sales | 996 |
748 |
33.2% |
| Active Listings | 4179 |
4553 |
-8.2% |
| Condo Sales for October | 2009 |
2008 |
Change |
| Sales |
688 |
640 |
7.5% |
| Median Price | $322,500 |
$324,800 |
-0.7% |
| Days on Mkt | 101 |
110 |
-9 days |
| Pending Sales | 939 |
632 |
48.6% |
| Active Listings |
4379 |
4743 |
-7.7% |
Key Points for the Greater Boston Single Family market:
● Sales of single-family homes increased for a second consecutive month in October on a year-to-year basis, increasing 3.4 percent over the previous October. This marks the third time in the past four months that home sales have improved on an annual basis.
● On a historical basis in the Greater Boston region, last month's single-family sales volume of 727 homes sold is the highest October sales total in four years and ranks as the 10th highest sales total on record for October in Greater Boston.
● Pending home sales also rose sharply in October by 33 percent over the comparable month last year, and have now risen for four consecutive months (July-October). This would suggest home sales should continue to improve over the final two months of 2009 compared to the same month last year.
● After experiencing double-digit price declines in four of the first five months of 2009, median selling prices for single-family homes have begun to stabilize. The median selling price slipped only 1.1 percent in October on a year-to-year basis to $400,500. This follows a healthy 6.1 percent increase in the median selling price for homes in September, and three months (June - August 2009) in which the median price decreased modestly by 2.5 percent or less compared to the same month one year earlier.
● The median selling price for detached single-family homes in Greater Boston is down 25.7 percent from its peak of $539,000 recorded in August 2005. Combine this with near record low mortgage rates and you get much better housing affordability levels in eastern Massachusetts.
● The average days on market is down steadily from last October to 104 days, which reflects declining inventory levels and probably more realistic asking prices as well.
● The number of active listings fell 8 percent over the past 12 months. At the current sales pace, and less than 4,200 homes for sale on the market as of the end of October, inventory stood at 5.7 months of supply compared to 6.5 months of supply in October 2008.
In the Greater Boston condo market:
● Condo sales rose steadily for a second consecutive month in October, climbing 7.5 percent over the same month last year. This follows a 10 percent increase in sales volume in September and marks the third time in the past four months home sales have improved on a year-to-year basis (after 9 consecutive months of declining sales on a year-to-year basis from (October 2008 - June 2009).
● On a historical basis, last month's sales volume of 688 condos sold is the highest October sales total in four years and ranks as the 3rd highest sales total on record for the month of October in Greater Boston.
● The median selling price for a condominium declined 0.7 percent in October to $322,500. It's the fifteenth time in the last 16 months the condo median price has fallen on a year-to-year basis. However, in recent months prices have been fairly stable, having risen 0.9 percent in September and decreasing by three percent or less in the three previous months (June - August 2009) compared to the same month last year.
● The condo median selling price is down 13.3 percent from its peak of $372,000 in July 2007. Over the longer-term, the median price of a condo is up 17.9 percent over the past seven years.
● The average time on market for condos fell steadily over the past 12 months by nine days to 101 days in October.
● With the number of active listings down 7.7 percent from last October to less than 4,400 condos for sale, there was 6.4 months of supply on the market based on the October 2009 sales pace. This is down from 7.4 months of supply last October.
Statewide, single family sales were up 17.7% in October, the 5th straight month of increases. Condo sales were also up 17.2%. Median prices fell 2.6% for single families and were also down 4.0% for condos. Pending sales (homes put under agreement in October) were up a whopping 27% over the prior year - a sign that the both the market was really struggling this time last year and that many buyers are jumping to get in on the $8000 home buyer tax credit this year.
Nationally, resales of existing homes and condos increased 10.1% from September (and 23.5% compared to October 2008), the highest increase in two years while median prices fell 7.1% compared to a year ago, which was the smallest decrease in over a year. For us here in the Northeast region, sales were up 11.6% while prices were down only 2.6% so we're clearly outperforming the national market.
From the housing market data of the past few months, both nationally and locally, there are clear indications of sales activity increases and price stabilization occurring. Obviously part of that is due to the "artificial demand" created by the first time buyer tax credit, but a portion is also due to natural market actions. With prices and mortgage rates way down in much of the country, homes are more affordable than in years, allowing buyers to get in on what is certainly close to the bottom - hence demand and sales are increasing. Just as a decline in sales activity foretold a decline in prices at the top of the market, we'll see an increase in activity lead to more price stabilization now.
With the extended and expanded $8000 homebuyer tax credit, 30 year mortgage rates averaging around an almost absurd 4.83% (according to Freddie Mac last week), and prices in most parts of the country lower than 5 years ago, I expect decent activity over the winter months (though we'll have the typical holiday dip before a probable steady increase again in the spring, especially as people are under pressure again rush to get in before the new tax credit end date - human nature)!
I would never just say "buy" for buying sake, but if family needs dictate it and you've been thinking of buying (and plan to be in your home for a while), now is a great buying opportunity. What seems to slide under the radar much of the time is that overall prices have fallen a total of 20-25% from the peak in the Boston area. Given that the peak was in 2005, we're taking about a 5-6% decline per year - not good if you bought near the peak but also not exactly fall of the cliff numbers many people assume from reading the news over the past couple years. Even if prices continue to slide at that rate for another year (I don't think they will), the "free money" from the tax credit and historically low interest rates that you'll have for the life of the loan will probably offset any decline in the short term and put you in a better position as prices begin to increase over the long term.
What are you thoughts? Comment below!
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