Housing market at risk by Governor Patrick’s budget proposal to eliminate Capital Gains Exclusion
WALTHAM, Mass. – February 26, 2013 – The Massachusetts Association of REALTORS® (MAR) reported today a strong start to the 2013 Bay State real estate market with median home prices going up for the fourth straight month with home sales also closing up for the 19th straight month. Condominium median home prices and closed sales were also up in January.
“The Massachusetts real estate market was active in the fourth quarter of last year and that has resulted in a strong start to 2013,” said 2013 MAR President Kimberly Allard-Moccia, broker-owner of Century 21 Professionals in Braintree. “Buyer activity remains high, but now we look to the home sellers to ‘get off the fence’ and put their homes on the market.”
January 2013 Housing Numbers Podcast with
MAR President Kimberly Allard-Moccia
There were 2,676 detached single-family homes sold this January, a 13.7 percent increase from the 2,353 homes sold the same time last year. This is the 19th straight month of year-over-year increases. This January had the most closings since January 2007 when there were 2,828 homes sold. On a month-to-month basis, home sales were down 29.6 percent from 3,801 homes sold this past December. A significant month-to-month decrease is typical from December to January.
The median selling price for single-family home in January was $282,500 which was UP 5.4 percent from $268,000 in January 2012. This is the fourth straight monthly year-over-year increase. On a month-to-month basis, the January median selling price went down 5.8 percent from $300,000 in December 2012.
There were 986 condominiums sold this January, a 15.7 percent increase from the 852 condos sold the same time last year. This is the 13th straight month of year-over-year increases. On a month-to-month basis, condominium sales were down 33.3 percent from 1,478 homes sold this past December. Similar to single-family homes, a significant month-to-month decrease is typical from December to January.
The median selling price for condominium in December was $250,000 which was flat from the $250,000 median price in January 2012. This is the 11th straight month in which median prices were either up or flat from the year before. On a month-to-month basis, the January median selling price was down 12 percent from $284,000 in December 2012.
Budget Proposals Could Hurt Real Estate Market:
The Massachusetts Association of REALTORS® is strongly opposed to Governor Patrick’s proposal to tax the equity on the sale of a home as part of his 2014 Budget. By eliminating the Capital Gains Exclusion, the Commonwealth would be removing one of the main ways in which families accumulate wealth for retirement and the purchase of future homes.
“Most families and seniors count on the equity they gain from selling one house to buy their next house or to fund their retirement,” said Allard-Moccia. “Not only would the elimination of this tax benefit make the ‘egg’ in most peoples’ ‘nest egg’ smaller, but would also hurt the ongoing housing recovery.”
The current Massachusetts law mirrors federal law and allows couples who file a joint tax return to exclude from taxation up to $500,000 of any gain in their home’s value. Singles can exclude gains of up to $250,000.
The Massachusetts Association of REALTORS® is also strongly opposed to the repeal of two additional tax credits. The first is the Lead Paint Tax Credit, a widely-used incentive that helps homeowners and landlords reduce the risk of lead poisoning in children. The second tax credit that should be preserved is the Septic System Repair/Replacement Tax Credit. This credit not only reduces the financial strain on low- and moderate-income homeowners to fix or replace failing septic systems, but protects the environment.
Inventory and Days on Market:
The inventory of single-family homes as of January 31, 2013 decreased 27.3 percent from January 2012 (25,214 listings in 2012 to 18,329 listings in 2013) which translates into 4.7 months of supply in January 2013. This is down from 7.9 months of supply last year and down from 4.9 months in December 2012. This was the 10th straight month of inventory decreases.
The inventory of condominiums on the market in January was down 32.8 percent compared to the year before (8,619 listings in 2012 to 5,791 listings in 2013), which translates into 3.8 months of supply, which is down from 7.0 months in January 2012 and which was flat from the month before.
Detached single-family homes stayed on the market an average of 114 days in January 2013 compared to an average of 128 days in January 2012. Condos stayed on the market an average of 103 days, down from an average of 132 days in January 2012. On a month-to-month basis, days on market for single-family homes were flat from December 2012 while condos were up from 102 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.