“It is an interesting dynamic when prices are up and sales are down,” said 2011 MAR President Laurie Cadigan, broker-owner of Barrett & Company in Concord. “Although mortgage lending continues to be more conservative, home buyers were able to take advantage of the low rates and felt homes were priced correctly.”
May 2011 Housing Numbers Podcast with
MAR President Elect Trisha McCarthy
There were 3,250 detached single-family homes sold this May, a 16.9 percent decrease from the 3,911 homes sold the same time last year. On a month-to-month basis, home sales were up 18 percent from 2,754 homes sold this past April. This is the third straight month-to-month increase.
The median selling price for single-family homes in May was $300,375 a very slight increase of 0.5 percent compared to $299,000 in May 2010. On a month-to-month basis, the May median selling price was up 7.7 percent from $279,000 in April. This is the third straight month-to-month increase.
The May condominium market was down 20.8 percent compared to the same time last year (from 1,635 units sold in 2010 to 1,295 units sold in 2011). On a month-to-month basis, condominium sales were up 11.9 percent compared to the 1,157 units sold this past April.
Condominium median selling prices in May was up 7.3 percent from the May 2010 median price (from $262,000 to $281,000). This is the second straight month of year-over-year increases. On a month-to-month basis, the median selling price of a condominium was up 4.5 percent from an April median of $269,000. This is the third straight month-to-month increase.
Qualified Residential Mortgage (QRM):
The Dodd-Frank Wall Street Reform and Consumer Protection Act aims to improve the quality of mortgage lending and to bring private money to the housing market, thereby reducing risk to the American public. However, one provision being considered by regulators would force qualified borrowers to put 20 percent down on a loan…a requirement which could especially hurt Massachusetts homebuyers.
“While we are feeling positive about how homes are being priced, we’re very concerned that the proposed ‘Qualified Residential Mortgage’ provision currently being considered as part of the Dodd-Frank act will hurt any housing market recovery,” said Cadigan. “Poor underwriting and exotic loans and not low downpayments caused our housing meltdown. If this current proposal goes through, we could be shutting the door on home ownership for qualified buyers with good credit, who can’t put $60,000 down for the cost of a median priced home in Massachusetts.”
As proposed, a lender would be required to retain five percent of the value of any loan with less than a 20 percent downpayment that they originate and then sell as a mortgage-backed security. Loans that meet the 20 percent downpayment threshold would be considered a “Qualified Residential Mortgage,” (QRM). Because the lender would not have to hold five percent in value of QRMs, they would be more affordable to the borrower. The National Association of REALTORS® has determined that if this proposal goes through as written, the difference in the cost for a non-QRM could be as high as 2.25 percentage points.
Inventory and Days on Market:
The inventory of single-family homes as of May 31, 2011 increased 6.0 percent from May 2010 (30,296 listings in 2010 to 31,981 listings in 2011) which translates into 9.8 months of supply in May 2011. This is up from 7.7 months of supply last year and down from 10.7 months in April.
The inventory of condominiums on the market in May went down 4.0 percent compared to the year before (12,023 listings in 2010 to 11,483 listings in 2011), which translates into 8.9 months of supply, which is up from 7.4 months in May 2010 and down from 9.7 months in April.
Detached single-family homes stayed on the market an average of 132 days in May 2011 compared to an average of 114 days in May 2010. Condos stayed on the market an average of 131 days, up from an average of 125 days in May 2010. On a month-to-month basis, days on market for single-family homes were down from 151 days in April, while condos were down from 135 days.
About the Massachusetts Association of REALTORS®:
Organized in 1924, the Massachusetts Association of REALTORS® is a professional trade organization with more than 19,000 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.
Editors and reporters: Please note that the term Realtor is properly spelled with an initial capital “R”, per the Associated Press Stylebook.