Here's October 2013's Monthly Indicators report from the Greater Boston Association of Realtors
Boston Real Estate Market Trends
Buyers maintained their momentum through the summer and into the fall as interest rates continued to stay low after ticking up in the spring. Prices continue to move up because demand for available homes to buy is outpacing supply. Inventory continues to shrink from the same time the year before. What the market needs are homeowners to commit to selling to get us to full recovery.
- October single-family home sales Up 12.2% over last year. Seventh straight months of increases.
- Most October closed sales since 2004
- October Single-family median prices were UP 12.3% to $320,000. Thirteen straight months of increases.
- September condo sales UP 8.8% and median prices UP 11.3% ($295,000)
- Inventory in October Down 19.96% to 20,716 and Condominium homes available Down 26.1% to 5,582
- SF listings added to the market in October UP 10.9% over last year. (5,975 from 5,387 in 2012)
- Condo listings added to the market up 17.7% over last year. (2,153 from 1,829 in 2012).
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The Single-Family Home Market:
- Sales of detached single-family homes rose on an annual basis for a fourth consecutive month in October, climbing by almost 8 percent over the same month last year to 848 homes sold in October 2013. Its the most active October for single-family home sales in nine years, and the fifth busiest October on record in Greater Boston. Only October 1997 (952 homes sold), October 2003 (915), October 2004 (899) and October 1998 (890) experienced higher sales volume.
The healthy sales pace in October reflects improved consumer confidence in the housing market which is being fueled largely by rising home values. In addition, concerns over higher interest rates and inventory shortages among buyers kept the market more active than normal this summer, and demand from those who were outbid on homes during the traditional spring market has resulted in many buyers extending their home search beyond the start of the school year.
- On a month-to-month basis detached single-family home sales declined 8.2 percent in October from 924 homes sold in September. Although not unexpected given seasonal variations in the local housing market, this decrease is relatively modest compared to the previous month, when sales fell 36 percent between August and September.
- The monthly median selling price for detached single-family homes increased for a thirteenth consecutive month, improving nearly 8 percent on an annual basis to $465,500. Its the first time since December 2004 December 2005 that the single-family median home selling price has risen for such an extended period. Notably, last months median selling price is the highest on record for the month of October, topping the previous mark of $447,000 set in October 2005.
This prolonged period of rising home prices not seen since the housing boom in the middle of the last decade reflects increased optimism in housing and a stronger desire for home ownership, which is being fueled by rising home values, steady job growth, and record high rents in metropolitan Boston. This latest data also offers further evidence that trade-up activity, which is most often comprised of households with school aged children, has been especially strong in recent months, and also demonstrates the upward pressure being put on home prices as buyers compete for a limited supply of homes for sale. In fact, sales of homes priced between $400,000 and $799,999 have risen by nearly one-third (32%) in the past 12 months from 274 in October 2012 to 361 this October. At the same time, sales of lower-priced distressed properties (i.e. foreclosed homes and short-sales) continue to declining, with homes priced under $200,000 tumbling by more than half (52%) in the past year, from 50 homes last October to 24 in October 2013.
On a month-to-month basis, the median price moderated in October, sliding 7 percent from a downwardly revised $500,500 in September. Notably, however, last months median selling price was a record high for September in Greater Boston. At present, the median selling price remains up 33 percent from March 2009, when values bottomed out at $350,000 during the recession.
- The average list time for homes sold declined by one month (31 days) in the past year from 90 days in October 2012 to 59 days this October. Its the twentieth consecutive month that the average time to sell a single-family home has fallen on an annual basis. While average market time ticked up by one day from 58 days in September, the time on market for homes sold in October remains well below the 76 day average observed over the first 10 months of this year.
- Pending home sales rose on an annual basis for a thirtieth consecutive month in October, climbing 18 percent over the same onth last year to 1,031 home placed under contract. Last month was the most active for pending sales since June when a downwardly revised 1,292 homes were put under agreement, as well as the most active October for pendings in 10 years, dating back to October 2003 when 1,200 homes were put under contract. While pending sales typically decline on a month-to-month basis during the second half of the year, this year the number of homes placed under agreement rose between September and October by 17.8 percent, an indication that the government shutdown had little psychological impact home buyers and that the Greater Boston housing market will likely enjoy its best year for sales volume in 2013 since at least 2005 when more than 11,000 homes were sold.
- The inventory of single-family homes for sale remains well below historic norms, declining on an annual basis by more than one-quarter (28%) in October and by almost one-half (48%) in the past 24 months. Its the twenty-fourth time in the past 25 months the number of homes listed for sale has dropped from the same month one year earlier, and with nearly 1,000 fewer homes on the market this October compared to the same month in 2012, the 2,541 listings as of October 31 represents the lowest October supply of homes for sale in over a decade. On a month-to-month basis, the number listings also fell 10 percent from an upwardly revised 2,826 homes on the market in September.
The inventory of homes for sale as expressed in months of supply also declined from 4.5 months last October to 3 months in October 2013. Todays tighter inventory level can be attributed to many homeowners being underwater on their mortgages and not in a position to sell, few new homes being constructed, and a reluctance among older, empty-nester households to list their homes for sale until home values recover further. A balanced market occurs when there is 7.5 8.5 months of supply. Thus, at the current sales pace there is an insufficient supply of homes to meet demand, which is a significant concern since it has the potential to produce rapid appreciation in home values. This will frustrate buyers who lose out in competitive, multiple offer situations, and, worse, could price other buyers out-of-the-market.
The Condominium Market:
- Similar to the single-family home market, condo sales have now risen on an annual basis for four consecutive months, improving 4 1/2 percent over year ago levels to 744 units closed in October 2013. In addition, last month was the busiest October for condominium sales in nine years, and the second most active October for condo sales on record in Greater Boston, surpassed only by October 2004 (746 sales). With last months sales gain, condo sales have now risen in 21 of the past 22 months on an annual basis dating back to January 2012.
However, of little surprise, market activity slowed on a month-to-month basis in October, with sales dropping 16 percent from an upwardly revised 887 condos sold in September.
Still, demand for condos remains strong, especially among suburban empty-nesters looking to relocate to Boston, as well as with investors, and renters looking to become first-time homeowners. However a shortage of condos for sale is constraining sales activity and creating upward pressure on prices as buyers compete for a limited supply of listings.
- The median selling price for condominiums increased on an annual basis for an eighth consecutive month in October, improving 13.8 percent over the past year to $416,500. Its the largest percentage increase in the monthly median selling price since this past March, when the median price jumped 19.7 percent over the same month in 2012.
As was the case in the detached single-family home market, last months median sales price represents a new high monthly median price for the month of October, surpassing the previous record price of nearly $366,000 set just a year ago in October 2012. In addition, the median price this October ranks as the third highest monthly median selling price ever recorded for any month in Greater Boston, exceeded only by the record high median of $420,000 set in June of this year, and the $416,250 median price recorded this past August.
With buyer demand steady and inventory extremely low, sellers are benefitting. This is evident from the ratio of original list price to sales price property owners are receiving for their units, which improved steadily over the past 12 months from 95.8 percent last October to 99 percent in October 2013. This marks the sixth consecutive month in which the listing price-to-selling price ratio for condos stands at 99 percent, which beats the previous peak return of 98 percent of original list price achieved by home sellers in June 2005 during the previous decades housing boom.
Unusual for this time of year, the median price also improved on a month-to-month basis, appreciating 1.6 percent from September when the median price reached $410,000. As of last month, the median selling price is up 54.3 percent from the lowest median selling price reported during the last market correction which occurred in January 2009 when the monthly median price bottomed out at $270,000.
- For the twelfth consecutive month the average time it took for condominiums to sell fell by one month or more, with days on the market down 37 days over the past year to an average of 47 days in October. Although the average market time has increased modestly by just over a week since July when average days on market dipped to an 11 year low of 38 days, it remains quite low by historic standards offering clear evidence that buyer demand continues to outpace the available inventory of condos for sale.
- The number of condominiums placed under agreement increased for the twenty-ninth time in the past 30 months, increasing 9 percent over the previous October to 862 units put under contract in October 2013. Pending sales also rose on a month-to-month basis, climbing 6.7 percent in October from a downwardly revised 808 pending sales in September. Its the most active October for pending sales in since October 2009 when 818 condos were placed under contract. With such a large number of properties headed to closing this late in the year, we expect sales volume to remain healthy through the end of 2013 and on pace to be the best year for condo sales since 2007 when over 10,200 condos sold.
- The number of condos on the market declined for a twenty-seventh consecutive month in October, declining by 31 percent (or over 700 units) during the past 12 months to 1,606 condos for sale, and tumbling 58.5 percent (or more than 2,250 units) from October 2011. Like the single-family market, the current inventory of condos for sale is the lowest monthly listing total in more than a decade, having dropped to a level that is more typical of the holiday period and winter months from December - February. At the current sales pace there is a 2.2 month supply of condos available for sale, which is down steadily from last year when there was a 3.3 month supply in October 2012. As a result, its clear that the on-going shortage of listings continues to put upward pressure on prices and is preventing an even healthier rebound in sales activity from occurring, especially in suburb communities where few new units are being built.