Greater Boston Real Estate Market Data, November 2012

The Single-Family Home Market:

• Sales of detached single-family homes soared in November, rising 31.7 percent on an annual basis over the same month last year to more than 900 homes sold. Its the second largest percentage increase in year-over-year sales growth this year, exceeded only by the 33 percent jump in home sales that occurred in February, and marks the sixteenth time in the past 17 months that single-family homes sales have increased on an annual basis. Furthermore, the 909 homes sold this November is the most for the month in eight years (dating back to 2004 when 923 homes were sold), and the second most active November for home sales this century in Greater Boston.

Notably, detached single-family home sales also increased sharply on a month-to-month basis, rising nearly 14percent over a revised 798 homes sold in October. Sales gains between October and November are rare given the seasonal nature of the housing market in New England, however such increases have occurred in each of the past four years, with this years increase the second largest during the period following a 19.6 percent gain between October and November 2009, when the federal home buyer tax credit was offered as an incentive to buy.

The strong sales activity in November mirrors the rise in consumer confidence in the housing market of late, as appreciating home prices, falling mortgage rates, and increasing rents have motivated more home buyers to get off the fence and purchase a home in recent months.

• The monthly median selling price for detached single-family homes posted its second largest increase of the year in November, climbing 5.8 percent on an annual basis to $447,500. This follows a 10 percent jump in the median selling price in October, and marks the first time in 2012 that the single-family median home price has increased in consecutive months. The median selling price for single-family homes also improved on a month-to-month basis,increasing 4.3 percent over a downwardly revised October median selling price of $429,000. Furthermore, the median home selling price now stands at its highest level since August ($489,450).

Record low mortgage rates, along with a diminished supply of homes for sale, fewer distressed property sales,and a spike in high-end home sales, have all contributed to the appreciation in home prices over the past year. In particular, todays tight supply of listings is producing more multiple offer situations and thats elevating prices as evidenced by an increase of over 2 percent in the percent of original list price to selling price which rose from 92.4% last November to 94.6% in November 2012. In addition, sales of homes priced at or above $800,000 rose 57 percent over the past 12 months, from 102 in November 2011 to 160 in November 2012.

Historically speaking, Novembers median selling price is 17 percent below the all-time high monthly median price of $539,000 set in August 2005, but up almost 28 percent from March 2009, when the median price bottomed out at$350,000 during the recession.

• The average list time for homes sold in November declined by nearly three weeks (20 days) over the past 12months to 90 days. This marks the ninth consecutive month in which the average time to sell a single-family home has decreased on an annual basis in Greater Boston. On a month-to-month basis, the average market time also edged down by one day from October. Additionally, the average list time for single-family homes in November is a full two weeks below this years year-to-date average market time of 104, though it is up from a two-year low of 81 days on the market for homes sold this past July.
• Pending home sales rose on an annual basis for a nineteenth consecutive month in November, climbing 18 1/2 percent over the same month last year to 811 homes placed under contract. On a month-to-month basis, pending sales declined 10.4 percent from October and are now at their lowest level since February 2012 when 652 homes went under agreement. This decrease is not unexpected, however, given that sales activity typically declines during the traditional holiday period and colder weather months of November February, especially in New England.
• The inventory of detached single-family homes for sale declined on an annual basis by 34 percent in November,making this the thirteenth time in the past 14 months that the number of homes on the market has declined from the same month one year earlier. There were moe than 1,500 fewer homes on the market this November compared to the same month last year, and the 3,042 homes listed for sale last month is the lowest inventory of ingle-family homesin Greater Boston during the month of November in 10 years. Todays 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.

The inventory of homes for sale as expressed in months of supply also shrunk substantially due in November due to the near record sales volume. At the current sales pace, there was 3.3 months of supply in November, compared to4.7 months of supply in October, and 6.7 months in November 2011. This is the lowest supply level since August when there was a 3.0 month supply of homes available for sale, and is insufficient to meet the present demand for housing. In fact, a balanced market for buyers and sellers occurs when there is 7.5 8.5 months of supply on the market. As a result,todays limited housing supply is preventing an even stronger level of sales activity from occurring in many communities.

The Condominium Market:

• Condominium sales rose to their highest level for the month of November in three years, increasing 32.4percent on an annual basis to 744 units sold. Its the second largest percentage increase in monthly condo sales on an annual basis this year, topped only by the 36 percent jump in sales observed in October. This marks the eleventh consecutive month in which condo sales have improved on an annual basis, with double-digit sales gains observed on a year-to-year basis during every month in 2012. Empty-nesters, dual-income echo-boomer households, and investors are all helping to drive demand for condos in the current market.

On a month-to-month basis, condo sales also improved, though much more modestly so, rising 4.6 percent from an upward revised 711 units sold in October.

Historically, last months sales total ranks as the third best on record for the month of November in Greater Boston,topped only by November 2009 (818 condos sold) and November 2004 (761 units sold).

• The condo median selling price rose for a tenth consecutive month in November, increasing 8.4 percent over the past 12 months to $380,000. Its the largest percentage increase in median price on an annual basis since May 2011when the price increased 11.3 percent from the previous May. The last time the monthly median selling price for condominiums increased for 10 consecutive months on an annual basis was March December 2010.

The median selling price for condominiums also improved on a month-to-month basis, increasing 4 percent over an upwardly revised October median selling price of $365,500. This price rebound follows four consecutive months in which the median price decreased on a monthly basis from a record high median of $400,000 set this past June. As a result, the condominium median selling price is now at its highest level since August, when it also stood at $380,000.

The steady rise in median selling prices over the 10 nine months is due in large part to a severely limited inventory of condos sale, which is down over 40 percent on an annual basis from the same month last year, thus leading to competitive, multi-offer bidding situations for many properties. This is evident in the increase over the past year of roughly 2 percentage points in the amount of original list price to sales price sellers are receiving for their units, which rose from 93.8% last November to 96.2% in November 2012.

Notably, as was the case in the detached single-family home market, there was a huge spike in the upper-end of the condo market in November, with the sale of luxury units priced at $800,000 or above increasing 51 percent over the past year from 60 in November 2011 to 91 in the same month this year. While Octobers median price is down a modest 5 percent from the record median price of $400,000 set this past June, it is 40 percent higher than the lowest median selling price reported in the recent market correction, which occurred in January 2009 when the monthly median price bottomed out at $270,000.

• The average time it took for condominiums to sell fell by more than one month (35 days) over the past 12months to an average of 74 days, an indication that buyer demand is out pacing the supply of available inventory of condos for sale at the moment. In fact, the average market time for November also declined by more than one week from the previous month when it took an average of 83 days for the typical condo to sell during October, and is nearly two weeks under the year-today average market time of 87 days observed during the first 11 months of this year. The only month in which average market time was lower this year was July when it took an average of 71 days for a sale to occur.
• Pending sales of condominiums increased for the eighteenth time in the past 19 months, increasing 18 percent over November 2011. On a month-to-month basis, pending sales declined by 19 percent from October and are now at their lowest level since February 2012 when 636 homes went under agreement.
• The number of condos on the market declined for a sixteenth consecutive month in November, falling 43.3percent to 2,037 condos for sale. The current inventory level is now at its lowest point in more than a decade. At the current sales pace there is roughly a 2.7 month supply of condos available for sale, which is down modestly from a 3.5month supply in October and sharply from one year ago when there was a 6.4 month supply in November 2011. The shortage of listings is putting upward pressure on prices and preventing an even stronger rebound in sales activity from occurring, especially in suburban communities and among empty-nesters and single first-time home buyers who are often not interested in home maintenance activity.