2012 Monthly Housing Market
Reports from The Greater
Boston Real Estate Board
In the Detached Single-Family Home Market:
● The number of detached single-family homes sold unexpectedly
declined on an annual basis in September,slipping 3.2 percent as
25 fewer homes sold during month compared to September 2011.
This is the first decrease in sales activity on a year-to-year basis in fifteen
months, dating back to June 2011, when single-family home sales fell
nearly 14 percent from the same month one year earlier.
The modest decline in sales volume is thought to be temporary,
and can be attributed in part to an increasingly limited supply
of homes for sale, some softening in consumer confidence
following a rise in the local unemployment rate in August, and
the desire of some buyers to wait until after the presidential
election before committing to such a large financial purchase.
Longer term, it is expected that the pace of home sales should remain
strong due to today’s record low mortgage rates and more affordable
home prices, at the same time rents are rising steadily in Greater Boston.
Historically, the 759 detached homes sold this past September ranks
as the thirteenth highest sales volume on record for the month.
● On a month-to-month basis detached single-family home sales
decreased 42 percent in September from an upwardly revised
1,314 homes sold in August. While this decline is not unexpected
given the seasonality of local housing markets in New England,
the magnitude of the decrease is the largest since January 2011
when sales slid nearly 37 percent from the previous month, and
reflects the fact that September sales activity is being compared
to an August sales volume total that was the fourth highest
of any month since the start of 2007 (a period of 68 months).
● The median selling price for detached single-family
homes declined on an annual basis for the second consecutive
month in September, slipping 4.3 percent over the past 12
months to $430,000. On a month-to-month basis, the
median selling price also fell for a second straight month,
declining 12 percent from $489,450 in August. The lower
median price for homes sold in September is largely a function of a
softening buyer demand during the traditional summer season,
which is evidenced not only by the slower sales pace last month,
but also a decline over more than one full percentage point in the
comparison between original list price to final sales price received by sellers.
Currently, the median selling price for detached homes is 20
percent below the all-time high monthly median price of $539,000
set in August 2005, but up 23 percent from March 2009, when the
median price bottomed out at $350,000 during the recession.
● The average list time for homes sold in September declined
by nearly two weeks (13 days) over the past 12
months to 88 days. This marks the seventh consecutive month
in which the average time to sell a single-family home has decreased
on an annual basis in Greater Boston. Meanwhile, on a
month-to-month basis, the average market time remain stable
from August at 88 days, which is up modestly by seven days
over the two-year low of 81 days of market
time that was observed for homes sold this past July.
● Pending home sales rose on an annual basis for a
seventeenth consecutive month in September climbing 31
percent over the same month last year. In fact, last month’s
improvement is the largest percentage increase in pending
sales on an annual basis in nearly three years, dating back
to November 2009 when the number of homes placed under
agreement rose 34 percent from the comparable month one
year earlier. Even though the 873 homes that went under
agreement in September is the lowest monthly total since
February, the current volume of pending sales remains at a
strong enough pace that it should result in this being the
best year for home sales in Greater Boston since 2007.
● The inventory of detached single-family homes for sale
declined on an annual basis by 30 percent for a second
consecutive month in September, making this the
eleventh time in the last 12 months that the number of homes on the
market has declined from the same month one year earlier.
Although up a modest 3 percent, or 116 properties from
August, the 3,943 homes listed on the market last month
marks the first time in 10 years that the inventory of single-family
homes for sale in Greater Boston has dipped below 4,000
units in the month of September. Today’s tighter inventory
level is the result of many homeowners being underwater on
their mortgages and unable to sell, as well as resistance
among older, empty-nester households who are waiting for their
homes to regain more of their value before listing it for
sale. In the near term, this means fewer homes for home
buyers to choose from and a higher probability of competitive,
multiple offer situations that buyers will face.
With the arrival of the fall selling season and softening buyer demand,
inventory has rebounded to 5.2 months of supply in September.
This follows three consecutive months in which the market of
homes for sales featured 3 months or less of supply. In fact,
inventory dipped to an eight-year low of 2.9 months of supply
in August. Nonetheless, the current housing supply is a full
two months below last September when there was 7.2 months
of supply, and is insufficient to meet the present demand for
housing. A balanced market for buyers and sellers occurs
when there is 7.5 – 8.5 months of supply on the market. As a
result, today’s limited housing supply is preventing an even
stronger level of sales activity from taking place in
many communities. With little new home construction in
the pipeline, it’s conceivable that the housing recovery could
stall, at least temporarily, if buyers aren’t provided with more
new product to choose from.
Recent Comments