Sales volume and median home prices stay steady in third quarter
WALTHAM, Mass. – The Massachusetts Association of REALTORS® (MAR) reported today that the number of single-family homes and condominiums sold in September were down over 13 percent compared to the same time last year while prices continue to remain steady. This decrease comes after July and August saw year-to-year sales increases. Despite the drop in sales in September, the third quarter was still the fourth most active third quarter since 1990, with sales of single-family homes up slightly and condominium sales down only 2.4 percent compared to the third quarter in 2006.
“Unfortunately, September wasn’t able to continue the year-to-year sales gains experienced in both July and August,” said MAR President Doug Azarian, broker/owner of Century21 Dream Homes in Falmouth. “It is definitely possible that all the reports about foreclosures, lack of financing, and the like have taken their toll and the result is that buyers are waiting on the sidelines. However, despite the disappointing news, interest rates are still low and for credit-worthy buyers now is a really good time to buy.”
There were 3,108 detached single-family homes sold this September, a 13.7 percent decrease from the 3,600 homes sold the same time last year. On a month-to-month basis, there was a 33.9 percent decrease compared to the 4,700 homes sold this past August. While a double-digit percentage decrease is typical from August to September, this was the biggest drop in over 10 years.
The median selling price for single-family homes in September was $340,000, a decrease of only 0.3 percent compared to $341,000 in September 2006. On a month-to-month basis, the September median selling price is down 4.8% percent from $357,000 in August.
The condominium market experienced a similar decrease in the number of units sold this September, with a 13.0 percentage drop compared to the same time last year (from 1,590 units sold in 2006 to 1,384 units sold in 2007). On a month-to-month basis, condominium sales were down 38.1 percent compared to 2,235 units sold in August. Similar to the single-family market, the double-digit percentage decrease experienced in the condo market from August is not uncommon. However, in this instance, the spread is not as substantial as seen in the single-family market.
The median selling price for condominiums of $275,000 in September, is up 1.9 percent over the same time last year ($270,000 in September 2006). Compared to this past August, the median selling price of a condominium is down 5.6 percent (from $291,250).
“Despite the drop in the number of homes sold, prices are remaining fairly stable,” said Azarian. “We shouldn’t lose sight of the fact that real estate continues to be a very good investment. For example, had you bought a house in September of 2002 and sold it this past September, your house appreciation would be up $53,000 on average,” said Azarian.
Inventory and Days on Market:
The inventory of residential properties (detached single-family homes and condos) on the market as of September 30, 2007 decreased 14.8 percent compared to the same time last year (from 63,956 listings in 2006 to 54,480 listings in 2007). At the current sales pace, this represents approximately 12.1 months of supply, a decrease from 12.3 months of supply in September, 2006. This is the ninth straight month that year-over-year supply levels have gone down. However, on a month-to-month basis, the average months of supply went up from the 7.6 months of supply seen in August, 2007.
The inventory of single-family homes fell 13.0 percent from September 2006 levels (43,227 listings in 2006 to 37,740 listings in 2007) which translates into 12.1 months of supply in September 2007. This is virtually the same amount of supply as there was last year (12.0 months), and up from 7.8 months of supply in August 2007.
Inventory continues to drop in the condominium market as well. September inventory went down 19 percent (20,729 listings in 2006 to 16,740 listings in 2007), which translates into 12.1 months of supply, a decrease from 13 months in September 2006 and up from 7.2 months this past August. It is considered a balanced market when there is between 7.5 and 8.5 months of available housing supply.
“While inventory declines from 2006 levels, there is still a good selection of homes and condominiums throughout the state,” said Azarian.
Detached single-family homes stayed on the market an average of 129 days in September 2007 compared to an average of 124 days in September 2006, while condos stayed on the market an average of 135 days compared to 119 days in September, 2006.
The number of single-family homes sold in the third quarter was up a fraction (0.4 percent) compared to the same time last year (12,127 homes sold in 2006 to 12,171 homes sold in 2007). Median selling prices were also up less than one percent to $355,000 in 2007 from $352,000 in 2006.
The condominium market experienced a drop in the number of units sold in the third quarter compared to the third quarter of last year with a 2.4 percent decrease (5,686 units sold in 2006 to 5,552 units sold in 2007). Despite the drop in sales volume, median selling prices went up 4.7 percent to $288,000 from $275,000 in 2006.
The combined residential market (sales of single-family homes and condominiums) experienced its fourth most active third quarter since 1990.
“The Residential market through the first three quarters of the year is keeping pace with the same three quarters of last year, with sales down only 1.1 percent,” said Azarian.
Quarterly Regional Sales Data:
Regionally, the Southeastern part of the state had the biggest jump in sales volume for single-family homes with a 14.3 percent gain for the third quarter with 511 homes sold in 2007 compared to 447 homes sold in 2006. Western Mass. had the largest drop in sales of single-family homes, with a decrease of 9.0 percent (from 1,846 homes in 2006 to 1,679 homes in 2007).
Cape Cod and the Islands saw the biggest increase in median income with a 4.9 percent gain compared to the third quarter in 2006 (from $390,000 in 2006 to $409,000 in 2007. Central Massachusetts experienced a 2.7 percent drop in median home prices (from $290,000 in 2006 to $282,250 in 2007).
In the condo market, Cape Cod and the Islands had the biggest increase in sales, with an 11.8 percent jump compared to the same quarter last year with 178 units sold in 2006 to 199 units sold in 2007. Unfortunately, Central Massachusetts had a 19 percent drop in the number of units sold, going from 574 units sold in 2006 to 465 units sold in 2007.
Greater Boston saw the largest increase in median prices for the condo market with a 6.8 percent jump (from $337,000 in 2006 to $360,000 in 2007). While Central Massachusetts experienced a 4.2 percent drop compared to the third quarter last year (from $208,750 in 2006 to $200,000 in 2007).
The multi-family market experienced a difficult third quarter, with sales decreasing 24.3 percent compared to the same time last year (with 1,301 multi-family dwellings sold in 2007 and 1,718 sold in 2006.) Median sales prices for multi-family homes declined 7.6 percent to $326,000 in 2007 from $353,000 in the third quarter of last year.
About REALTOR® Sales Data:
Sales and price data from the MAR report reflects transactions occurring through REALTOR®-affiliated multiple listing services in the Commonwealth, and account for approximately 80 percent of all real estate sales in Massachusetts.
About the Massachusetts Association of REALTORS®:
Organized in 1924, the Massachusetts Association of REALTORS® is a professional trade organization with more than 22,500 members. The term REALTOR® is registered as the exclusive designation of members of the National Association of REALTOR® who subscribe to a strict code of ethics and enjoy continuing education programs.