Here's December 2014s Monthly Indicators report from the Greater Boston Association of Realtors
Boston Real Estate Market Trends
2014 ends on a high note with single-family closed sales up in December. Strong buyer activity, lower inventory and low interest rates pushed prices up again on homes in December. While overall inventory of homes for sale is down in our area, there continue to be pocket markets that are seeing increases. 2014 was a year of lower sales, lower interest rates, lower homes for sale and higher prices.
- December single-family home sales UP 1.3% over last year
- December Single-family median prices were UP +3.8% at $519,000
- December condo sales DOWN -4.1% and median prices UP +4.7% at $440,000
- Inventory in December DOWN -12.2% to 1,700 and Condominiums Down -28.8% to 940
- SF listings added to the market in December UP +5.6% over last year. (418 from 396 in 2013)
- Condo listings added to the DOWN -1.4% over last year. (357 from 362 in 2013)
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The Single-Family Home Market:
- After declining for each of the previous 11 months in 2014, sales of detached single-family homes improved modestly on an annual basis in December, increasing 1.3 percent to 912 sales in December 2014. Lower mortgage rates, an improving national economy, and a greater willingness on the part of sellers to negotiate and adjust prices as buyer traffic slows later in the year, all help to boost sales last month. Notably, this is the fifth highest December sales total on record for the detached single-family homes in Greater Boston, exceeded only by December 2003 (1,034 homes sold), December 1997 (994 homes sold), December 1998 (950 homes sold) and December 2004 (945 homes sold).
Sales also rose on a month-to-month basis, increasing sharply by 19.4 percent from an upwardly revised 764 home sales in November. Its the first increase in month-to-month sales activity since sales rose 4 percent in July, and Decembers sales total is the best in four months, dating back to September when 1,288 single-family homes sold.
In spite of healthy buyer demand, sales declined over the final three months of 2014, slipping 1.5 percent from 2,548 sales in the fourth quarter of last year to 2,509 homes sold in the final quarter this year. Meanwhile, for the year, sales fell 5.4 percent this past year, from 11,369 homes sold in 2013 to 10,756 in 2014.
- The monthly median selling price for single-family homes rose for a third consecutive month on an annual basis in December, increasing 3.8 percent from a median price of $500,000 last December to $519,000 in December 2014. Notably, its the eleventh time this year (only September saw a decline in the median price from the same month a year ago), and twenty-sixth time in the past 27 months (dating back to September 2012) that the median home selling price has increased on an annual basis.
For the three months ending in December, the median selling price rose 5 percent, from an upwardly revised median price of $487,500 in the 2013 fourth quarter to $512,000 during the same three-month period this year. Similarly, the median selling price for detached homes also appreciated 5 percent for the full calendar year, climbing from an annual median price of $499,900 in 2013 to $525,000 this past year.
Last months median home price of $519,000 is the highest ever recorded during the month of December in Greater Boston, reflecting todays tight inventory levels and improved optimism about the economy and housing market. Notably, while down one-half of one percent last month, December marks the twenty-second consecutive month in which the ratio of original list price to sales price received by sellers has stood at or above 95 percent.
As of December, the median selling price is up 48.3% from March 2009, when home values bottomed out at $350,000 during the recession.
- After declining for 28 consecutive months from March 2012 June 2014, the average market time for homes sold has now increased for six consecutive months in Greater Boston. Single-family homes sold in December 2014 were on the market an average of 74 days, compared to 70 days in December 2013. Market time also increased by four days on a month-to-month basis. This reflects the largest amount of time its taken for homes to sell since April 2014 when the typical home was listed on the market for an average of 81 days.
- Pending home sales increased on an annual basis for a fourth consecutive month in December, climbing 18.9 percent from the same month last year to 554 homes put under contract. Its the largest percentage increase in pending sales activity in over a year, dating back to August 2013 when the nuber of homes placed under agreement improved 23 percent from the comparable month one year earlier. Meanwhile, on a month-to-monthbasis, pending homes slid 28.5 pecent from a downwardly revised 775 homes placed under contract in November.
- The inventory of single-family homes for sale continues to trail historic norms, declining on an annual basis by 12.2 percent in December and by more than one-quarter (26%) in the past 24 months. Its the thirty-eighth time in the last 39 months the number of homes listed for sale has dropped from the same month one year earlier, and with just 1,700 listings on the market as of December 31 the supply of homes for sale is at its lowest level in more than a decade.
On a month-to-month basis, the supply level fell even more sharply, with the number listings tumbling nearly 30 percent from an upwardly revised 2,425 homes on the market at the end of November. This is due in large part to the fact the number of new listings coming on the market decreased more than 30 percent in December from the prior month to its lowest level since December 2013 when fewer than 400 homes came on the market.
Meanwhile, inventory as expressed in months of supply declined to 1.9 months this December from 2.2 months of supply in December 2013 and 3.2 months of supply in November 2014. In a balanced market 7.5 8.5 months of supply exists, so at the current sales pace there is a woefully insufficient supply of homes available to meet buyer demand.
The Condominium Market:
- Sales of condominiums declined on an annual basis for a second consecutive month in December, decreasing a modest 4.1 percent, from 790 condos sold in December 2013 to 758 this December. This marks the seventh time in the past eight months activity in the condo market has fallen from year ago levels. Despite the slower sales pace, the volume of units sold remains historically strong, as the 758 condo units sold last month is the fourth best on record for the month of December topped only by December 2004 (830 sales), December 2013 (790 sales), and December 2012 (766 sales).
For the entire fourth quarter, sales also were down 4.1 percent, from 2,265 units sold in the three months from October December last year to 2,173 in the final quarter of 2014. Meanwhile, for the year, sales activity fell 5.7 percent, from 10,378 units closed in 2013 to 9,791 this past year.
Notably, condominium sales also improved on a month-to-month in December, climbing steadily by 25.3 percent from an upwardly revised 605 condos sold in November. Demand for condos remains especially strong among entry-level buyers and suburban empty-nesters looking to downsize or relocate to Boston, and, indeed, sales activity would likely be higher if not for the very limited supply of condos available for sale in eastern Massachusetts.
- The median selling price for condominiums increased 4.7 percent on an annual basis from a median price of $420,400 last December to a new record high for the month of $440,000 in December 2014. Its the twenty-first time in the last 22 months the monthly median price has risen from the same month one year earlier. The one aberration during this period was this past October when the median price dipped a modest 1.3 percent from the comparable month one year ago due to a higher concentration of high-end properties being sold in October 2013 as compared to October 2014.
Over the final three months of the year, the median selling price rose a more modest 2.9 percent, increasing from a downwardly revised median price of $416,750 in the final quarter last year to $429,000 during the fourth quarter of 2014. Meanwhile, for the full calendar year, the median selling price for condominiums appreciated 6.2 percent, from an annual median price of $405,000 in 2013 to $430,000 this past year.
On a month-to-month basis, the median selling price also rose by 1.1 percent from a downwardly revised $435,000 in November. Since the monthly median price bottomed out at $270,000 in January 2009 during the last market correction, the median condo selling price has now risen 63 percent to its current figure of $440,000.
Like the single-family home market, the condominium market continues to be plagued by 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 an eleventh consecutive month in December, meaning the typical condo owner was able to sell their unit either at or just below the full original asking price.
- The average market time for condominiums to sell declined for the first time in seven months during December, decreasing by 3 days over the past 12 months to 52 days on the market in December 2014. A similar decrease in market time occurred on a month-to-month basis as the typical condo sold in an average of 54 days in November. Notably, the time on market for condos sold in December is also below the monthly days on market average observed for all of 2014.
- The number of condominiums placed under agreement rose modestly on an annual basis, increasing 9.4 percent from 413 units placed under contract in December 2013 to 452 units this past December. This marks the fifth time this year pending sales have improved on an annual basis. Meanwhile, on a month-to-month basis, pending sales decreased nearly 30 percent from a downwardly revised 644 units put under contract in November, and are now at their lowest monthly total of the year.
- The number of condos on the market declined for a forty-first consecutive month in December, declining 28.8 percent over the past 12 months to 940 condos for sale, and by more than one-third (38.5%) since December 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 remained persistently below 2,000 units for sale for 21 of the past 24 months. Unfortunately, it appears as though the situation is not going to improve any time soon, especially with the number of new listings declining 36 percent between November and December to just 563 condos put up for sale in November, which is the fewest for a single month since December 2012 when 307 new condo listings came on the market.
At the current sales pace there is just a 1.2 month supply of condos available for sale, which continues a steady decline from year ago levels when there was a 1.7 month supply in December 2013, and is down sharply from one month earlier when there was a 2.3 month supply in November 2014. 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.