Here's October 2014s Monthly Indicators report from the Greater Boston Association of Realtors
Boston Real Estate Market Trends
Continued buyer activity and moderating prices pushed closed sales up in October. Inventory of homes for sale continued to go up in individual neighborhoods and markets across the state. Sellers are feeling more confident as new listings added to the market increased for second straight month.
- October single-family home sales UP 0.4% over last year.
- October Single-family median prices were UP 1.6% at $325,000
- October condo sales UP 4.0% and median prices UP 1.4% ($300,000)
- Inventory in October Down 9.2% to 24,171 and condominiums DOWN 22.2% to 5,181
- SF listings added to the market in October UP 2.0% over last year. (6,097 from 5,978 in 2013)
- Condo listings added to the market UP 2.1% over last year. (2,220 from 2,175 in 2013)
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The Single-Family Home Market:
- Sales of detached single-family homes declined on an annual basis for a tenth consecutive month in October, dipping 3.6 percent from the same month in 2013 when sales volume hit an eight-year high for the month of October with 856 homes sold. The last time home sales fell for 10 consecutive months was November 2007August 2008.
Even though the pace of home sales continues to lag behind year-ago levels, the number of closed transactions this October was still quite strong by historic standards. In fact, last months sales total is the seventh best on record for the month of October in Greater Boston, and the second highest October sales total over the past decade.
While inventory levels have shown some improvement over the past six months, there remains a substantial shortage of listings to meet current housing demand, which is hurting the market since many potential sellers are choosing not to put their home up for sale over concerns they wont be able to find another property to buy in a timely manner. Meanwhile, modest wage growth, still tight credit standards for home financing, and high student debt, are all making it difficult for first-time buyers to save for the down payment necessary to purchase a home.
- Single-family home sales also fell modestly on a month-to-month basis last month, declining 3.4 percent from an upwardly revised 854 homes sold in September. However, this decline is not unexpected as sales typically peak between June and August of each year and then slowly moderate each month through the end of the year due to the seasonality of the local housing market in New England.
- The monthly median selling price for single-family homes rose 5.8 percent on an annual basis in October, increasing from a median price of $474,000 last October to $501,500 in October 2014. This follows a 2.5 percent drop in the monthly median price during September, which was the first in 24 months, an indication that home values are not softening and that buyer demand remains historically strong. In fact, last months median price tag of $501,500 for detached single-family homes is the highest on record for the month of October in Greater Boston. Furthermore, October marks the twentieth consecutive month in which the ratio of original list price to sales price received by sellers has stood at or above 95 percent.
Significantly, on a month-to-month basis, Octobers median price increased steadily by 2.7 percent from a downwardly revised median price of $488,425 in September. Thats unusual, since buyer demand and market activity typically lessen over the remaining four months of the year.
Also noteworthy is the fact that the October median selling price of $501,500 is still up 43.3 percent from March 2009, when home values bottomed out at $350,000 during the recession.
- After observing 28 months of decreases over the previous two years, the average market time for homes sold increased for a fourth consecutive month in October. Single-family homes sold last month were on the market an average of 66 days, compared to 59 days in October 2013, and also increased on a month-to-month basis from an average of 64 days on the market in September 2014. This is the largest number of days on the market for homes to sell in six months and most since April 2014 when the typical home was listed on the market for an average of 81 days.
- After declining each month from June-August, pending home sales increased on an annual basis for a second consecutive month in October, climbing 9.5 percent from the same month last year to 1,022 homes placed put contract, which is the most in the past four months. On a month-to-month basis, pending homes also rose 15.3 percent from September when a downwarly revised 886 homes went under agreement.
- While the inventory of single-family homes for sale has showed signs of improveent in recent months, supply remainswell below historic norms, declining on an annual basis by 1.7 percent in October and by 17 percent over the past 24 months. Its the thirty-sixth time in the past 37 months the number of homes listed for sale has dropped from the same month one year earlier, and with 2,872 listings on the market as of October 31 the supply of homes for sale entering November is at its lowest level in more than a decade. On a month-to-month basis, the number listings also decreased 7 percent from an upwardly revised 3,091 homes on the market at the end of September. Meanwhile, the inventory of homes for sale as expressed in months of supply improved on an annual basis ever so slightly, from 3.4 months of supply in October 2013 to 3.5 months of supply this October, but was unchanged from September. A balanced market occurs when 7.5 8.5 months of supply exists, so at the current sales pace there is woefully insufficient supply of homes available to meet buyer demand.
The Condominium Market:
- Following five consecutive months of declines, sales activity in the condo market rebounded in October, increasing 4.6 percent on an annual basis from 764 condos sold in October 2013 to 799 this October. With this modest gain from a year ago, a new sales volume record has been set for the month, making October 2014 the busiest October on record for condo sales in Greater Boston. Meanwhile, on a month-to-month basis, sales fell modestly by 2.8 percent, from an upwardly revised 822 units closed in September, a reflection of the seasonal nature of the local housing market.
Demand for condos remains especially strong among suburban empty-nesters looking to relocate to Boston, as well as renters looking to become first-time homeowners.
- The median selling price for condominiums declined on an annual basis for the first time in 20 months in October, declining less than one percent over the past 12 months from $416,750 in October 2013 to $414,000 this past October. The modest price decrease is largely attributable to a higher concentration of high-end properties that sold last October compared to October 2014, as the number of condos priced at $1 million or more declined by nearly one-fifth (18.6%) over the past year from 70 in October 2013 to 57 this October. Despite the price decline, last months median selling price is still the second highest ever recorded in the Greater Boston condo market during the month of October.
Like the single-family home market, the condominium market continues to suffer from a lack of listings to meet current buyer demand, especially at the entry-level end of the market. As a result, sellers are profiting. In fact, the percentage of original list price to selling price reached or exceeded 98 percent for a ninth consecutive month in October, meaning the typical condo owner was able to sell their unit either at or just below the full original asking price.
- Along with the slower sales pace between September and October, the median selling price for condos also decreased during October, sliding 3.8 percent from an upwardly revised median of $430,250 in September. Still, the current median price remains up 53.3 percent from the lowest median selling price reported in the last market correction which occurred in January 2009 when the monthly median price bottomed out at $270,000.
- The average time for condominiums to sell increased on an annual basis for a fifth consecutive month in October, increasing modestly by 4 days over the past 12 months to 51 days on the market in October 2014. While average market time did drop by one day from September, the larger trend suggests that the current inventory shortage and record high prices are adding to the length of time necessary to sell the typical condo.
- The number of condominiums placed under agreement declined modestly on an annual basis in October, declining 1.6 percent from 812 units placed under contract in October 2013 to 799 units this past October. Similarly, pending sales decreased 1.4 percent on a month-to-month basis from a downwardly revised 810 units put under contract in September. This marks the seventh time this year pending sales have declined on an annual basis.
- The number of condos on the market declined for a thirty-ninth consecutive month in October, declining 21.3 percent over the past 12 months to 1,516 condos for sale, and by more than one-third (34.8%) since October 2012. Like the single-family market, the current inventory of condos for sale is the lowest monthly listing total in more than a decade, and has been remained persistently below 2,000 units for sale for 19 of the past 22 months. At the current sales pace there is just a 1.9 month supply of condos available for sale, which continues a steady decline from year ago levels when there was a 2.5 month supply in October 2013. 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 suburban communities where few new units are being built.