Housing Market Hits a Triple for First-Time Homebuyers

Affordable prices, low mortgage rates and $8000 tax credit create unique opportunity

WALTHAM, MA – February 26, 2009 – (RealEstateRama) —  Baseball’s opening day may be only seven weeks away, but the housing market just hit a triple for first-time homebuyers, according to the latest housing report from the Massachusetts Association of REALTORS® (MAR).

“With historically-low mortgage interest rates, average home prices at their lowest level in years, and the new Federal $8,000 tax credit, the housing market just hit a ‘triple’ for first-time homebuyers in the Commonwealth,” said MAR President Gary Rogers, a broker at RE/MAX First Realty in Waltham.   “Meanwhile, the December 1 deadline for that tax credit and shrinking supply of homes for sale really makes this a good time to get into the market to buy a home.   Starter home sales really get the market moving for everyone else who already owns a home.”

The Association reported today that single-family home sales were down 12.5 percent in January compared to the same time last year.  Despite the drop in sales activity, January is only the second month in the past five that sales have been down.  Condominium sales were down 26 percent in January compared to the same time last year.  The median price for a single-family home in January was $263,500 while the median price for a condominium was $204,000.
There were 1,737 detached single-family homes sold this January, a 12.5 percent decrease from the 1,986 homes sold the same time last year. On a month-to-month basis, home sales were down 33.8 percent from 2,623 homes sold this past December.  While the month-to-month decrease in sales is significant, it is not unprecedented for this time of the year as January sales typically go down from December.
“Affordability has improved in Massachusetts, so even when sellers accept a more modest price for their homes, they find their next home to be much more affordable,” said Rogers.

The median selling price for single-family homes in January was $263,500, a decrease of 17.9 percent compared to $321,000 in January 2008. On a month-to-month basis, the January median selling price was down 4.2 percent from $275,000 in December 2008.  The January median selling price is back to 2002 levels.
The condominium market experienced a 26 percent decrease in the number of units sold this January, compared to the same time last year (from 850 units sold in 2008 to 629 units sold in 2009).  On a month-to-month basis, condominium sales were down 33.3 percent compared to the 943 units sold this past December.  Similar to the single-family market, it is not unprecedented for condominium sales to go down significantly from December to January.  The January median selling price for condominiums is back to 2003 levels

Condominium median selling prices in January were down 26.1 percent from $276,000 in 2008 to $204,000 in 2009.  On a month-to-month basis, the median selling price of a condominium was down 11.3 percent from a December median of $230,000.

Inventory and Days on Market:
The inventory of residential properties on the market as of January 31, 2009 decreased 20 percent compared to the same time last year (from 44,540 listings in 2008 to 35,459 listings in 2009).  At the current sales pace, this represents approximately 15.0 months of supply, a decrease from 15.7 months of supply in January 2008.  On a month-to-month basis, the average months of supply is up from 10.0 months in December 2008.  It is considered a balanced market when there are between 7.5 and 8.5 months of supply.

The inventory of single-family homes decreased 19.0 percent from January 2008 (30,559 listings in 2008 to 24,822 listings in 2009) which translates into 14.3 months of supply in January 2009.  This is down from 15.4 months of supply last year and up from 9.6 months of supply in December 2008.  This is the 10th straight month that inventory has gone down compared to the year before and is at its lowest level since February 2005.

The condominium market saw January inventory decrease by 24 percent from last year (13,981 listings in 2008 to 10,637 listings in 2009), which translates into 16.9 months of supply, up from 16.4 months in 2008 and up from 11.3 months this past December.  This is also the 10th straight month that inventory has gone down compared to the year before and it is the second lowest level since December 2004.

Detached single-family homes stayed on the market an average of 146 days in January 2009 compared to an average of 143 days in January 2008, while condos stayed on the market an average of 179 days, up from an average of 165 days in January 2008.  On a month-to-month basis, days on market for single-family homes were up from 140 days and condos were up from 142 days in December.

About the Massachusetts Association of REALTORS®:
Organized in 1924, the Massachusetts Association of REALTORS® is a professional trade organization with more than 20,000 members.  The term REALTOR® is registered as the exclusive designation of members of the National Association of REALTORS® who subscribe to a strict code of ethics and enjoy continuing education programs.