2007 Q2 Housing Data
Massachusetts Home Prices Remain Steady as Sales Volume goes down in Second Quarter
June residential housing market in ‘balance’ as supply
continues to decrease
WALTHAM, Mass. – July 23, 2007 – The Massachusetts Association of REALTORS® (MAR) reported today that the number of single-family homes and condominiums sold in the second quarter are down compared to the same time last year. Despite the decrease, this was still the fourth most active second quarter in sales volume since 1990. Year-to-date sales (Q1 and Q2 combined) are down only 1.4 percent compared to the same two quarters last year.
“While the second quarter wasn’t able to sustain the momentum of the first quarter compared to the year before, it was still very active,” said MAR President Doug Azarian, broker/owner of Century21 Dream Homes in Falmouth. “Looking at year-to-date numbers, we are not far off last year in terms of sales and median prices, while inventory and months of supply continue to go down.”
In the second quarter of 2007, sales of detached single-family homes decreased 5.4 percent compared to the same time last year with a total of 12,171 homes sold (12,862 homes were sold in 2006). Median selling prices also saw a decline of 1.4 percent from $360,000 in 2006 to $355,000 in 2007.
The condominium market also experienced a drop in the number of units sold in the second quarter compared to the second quarter of last year with a slight 1.1 percent decrease (6,350 units sold in 2006 to 6,278 units sold in 2007). Despite the small drop in sales volume, median selling prices went up 2.7 percent to $287,500 from $280,000 in 2006.
The combined residential market (sales of single-family homes and condominiums) experienced its fourth most active second quarter since 1990.
Regionally, Greater Boston had the biggest jump in sales volume for single-family homes with a 2.6 percent gain for the second quarter with 3,048 homes sold in 2007 compared to 2,971 homes sold in 2006. Western Mass. had the largest drop in sales of single-family homes, with a decrease of 10.7 percent (from 1,862 homes in 2006 to 1,662 homes in 2007).
Despite experiencing the largest percentage drop in the number of single-family homes sold in the second quarter, Western Mass. also experienced the biggest jump of any region in condo sales with a 20.9 percent increase (from 273 units sold in 2006 to 330 units sold in 2007). The region with the biggest drop in condo sales was Central Mass. with a 24.1 percent decrease (663 units sold in 2006 to 503 units sold in 2007).
Western Mass. also had the largest increase in median selling prices for single-family homes with a 4.3 percent increase (from $209,900 in 2006 to $219,000 in 2007). Despite the drop in condo sales in Central Mass., the region experienced a jump of 5.7 percent in median selling prices (from $194,000 in 2006 to $205,000 in 2007), the largest increase across the state.
The multi-family market experienced a difficult second quarter, with sales decreasing 39.2 percent compared to the same time last year (with 1,311 multi-family dwellings sold in 2007 and 2,158 sold in 2006.) Median sales prices for multi-family homes followed suit and declined 8.1 percent to $340,000 from $370,000 in the second quarter of last year.
“The multi-family market is more volatile and investor driven,” said Azarian. “Recent improvements in the stock market are most likely impacting investor demand on these types of properties.”
The number of single-family homes sold in June 2007 dropped 6.0 percent over the same time last year (from 5,276 homes sold in 2006 to 4,959 homes sold in 2007). On a month-to-month basis, there was a 27.7 percent increase in the number of homes sold compared to May 2007 (3,884 homes sold). While the increase is significant, it is typical for the period between May and June.
Median selling prices for single-family homes went down 1.6 percent compared to the same time last year (from $370,000 in 2006 to $364,000 in 2007). Compared to May 2007, median selling prices were up 2.5 percent from $355,000.
The condominium market also saw a decline in sales compared to June of last year with a 3.6 percent drop (from 2,440 units sold in 2006 to 2,352 units sold in 2007). On a month-to-month basis, the condominium market experienced an increase of 8.2 percent over May (2,173 units sold).
Median selling prices for the condominium market increased both annually and on a month-to-month basis. Prices were up 4.4 percent over June of last year (from $283,500 in 2006 to $296,000 in 2007) and were up 2.1 percent over May.
“The month of June is following the trend of the past several months in that sales volume is down, but median prices are stable compared to the year before,” said Azarian.
Inventory and Days on Market:
The inventory of residential properties (detached single-family homes and condos) on the market as of June 30, 2007 decreased 16.6 percent compared to the same time last year (from 65,325 listings in 2006 to 54,497 listings in 2007). At the current sales pace, this represents approximately 7.5 months of supply, a decrease from 8.5 months of supply in June 2006. On a month-to-month basis, the average months of supply edged down from 8.9 months in May 2007.
The inventory of single-family homes fell 15.0 percent from June 2006 levels (44,175 listings in 2006 to 37,498 listings in 2007) which translates into 7.6 months of supply in June 2007. This is down from 8.4 months of supply the same time last year and down from 9.5 months of supply in May 2007.
The condominium market experienced an even greater drop, as inventory fell 20 percent to 7.2 months of supply, a decrease from 8.7 months in June 2006 (21,150 listings in 2006 to 16,999 listings in 2007). In fact, this is the lowest inventory level since August 2005 when supply was at 6.3 months. It is considered a balanced market when there is between 7.5 and 8.5 months of available housing supply.
Detached single-family homes stayed on the market an average of 126 days in June 2007 compared to an average of 111 days in June 2006, while condos stayed on the market an average of 124 days compared to 98 days in June 2006.
“With only 7.5 months of supply, the residential market is now in ‘balance’.” said Azarian. “This is typically a good time for both buyers and sellers to come together.”
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 24,000 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.