I recently studied MLSpin because I was noticing a very low amount of inventory. Sure enough, my suspicions were correct. We are at a historic low. The number of available properties is 60% off of last year at this time and at about half of the available inventory in 2011.
What are the reasons? Well, low interest rates have brought enhanced buying power, which has increased the number of buyers. Financing restrictions have also loosened over the course of the last 12-18 months, allowing a number of people to stop delaying their search. The economy has been getting stronger. Finally, not enough home owners are aware that many homes have gained any value lost during the economic crisis of five years ago.
If you are considering selling, now is the time. Contact us for a full evaluation of your home's current value.
Well, after all of the back-and-forth that the media has reported, it is hard to shrug off these numbers. The real estate market has seen gains in each of the key metrics, including number of transactions, days on market and average sale price. We have pulled together a simple summary for you below on the Massachusetts real estate market and the Boston real estate market for the dates January 1 through July 31.
Massachusetts Real Estate
- There was a 19% increase in number of transactions
- Homes sold 3 days faster
- The average sale price was up by over $1,300.
Boston Real estate
- There was a 21% increase in number of transactions
- Homes sold 9 days faster
- The average sale price was up by almost $13,000.
Both markets have seen growth in all segments. A welcome discovery for those of us in the business is that the first-time homebuyer market saw a substantial increase. That segment of the market had been temporarily stimied by tight financing restrictions.
In the midst of the recent feverish activity of the Boston real estate market, I took some time to gather some first and second quarter statistics. While the second quarter has yet to close, it is looking very strong so far. I used Boston as the touchstone. I looked at single family homes, condos and multifamily home sales for year-over-year January 1 through June 1. What I found was significant:
In 2011, 1784 sales had occurred with an average Days on Market (DOM) of 107. The average sale price was $520,808.
In 2012, 2181 sales have occurred with an average DOM of 99. The average sale price was $532,925.
In short, we look for number of sales and average sale price to go up. We also hope for the Days on Market to go down, indicating that homes are selling more quickly. In this market snapshot, we are seeing what we would hope for. In addition, the Sales Price to List Price Ratio went up by 1 percentage point, from 96% to 97%. This means that homes are selling closer to the asking price.
Does this mean that we have left the market dip behind us? None of us know that for certain. There are still market questions regarding job figures and international banking problems in Greece, Spain, Ireland and Portugal. But, these statistics are certainly promising. And a recent article in the Wall Street Journal ("Why It's Time To Buy" by Ruth Simon and Jessica Silver-Greenberg) reminds us that real estate is a long term investment. The fervor of the 2004-2005 market spike convinced many people that real estate should be bought and sold with the frequency of stocks and investors could expect similar returns. The recent market correction reminds us that this is a long term investment. In that context, the experts still find confidence in the market.