Here's September 2015s Monthly Indicators report from the Greater Boston Association of Realtors
Boston Real Estate Market Trends
September closed home sales up on strong buyer activity over the summer. Home prices continued to be pushed higher by strong demand and low supply in September. Six straight months of new listings added to the market are giving buyers more options.
- September single-family home sales UP +15.0% over last year
- September Single-family median prices were UP +7.5% at $455,000
- September condo sales UP +4.1% and median prices were UP +3.4% at $428,500
- Inventory in September DOWN -10.1% to 3,870 and Condominiums DOWN -6.4% to 1,832
- SF listings added to the market in September UP +10.9% over last year. (2,040 from 1,839 in 2014)
- Condo listings added to the market UP +11.3% over last year. (1,421 from 1,277 in 2014)
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The Single-Family Home Market:
- Sales of detached single-family homes improved on an annual basis for a fourth consecutive month in September, increasing 15 percent over year ago levels, from 1,066 homes sold last September to 1,226 in September 2015. Last months sales volume is the second highest on record for the month of September in Greater Boston, topped only by the 1,227 homes sold in September 2004. The last time monthly home sales increased by a larger percentage rate on a year-over-year basis was two years ago, in September 2013 when sales jumped 28.6 percent over the same month one year earlier.
Conversely, on a month-to-month basis, single-family home sales slid for a second consecutive month, falling 29 percent from an upwardly revised 1,729 homes sold in August. The decline was not unexpected however, given the fact August sales volume reached a record high for the month, and housing demand typically softens from late summer through winter due to the seasonal nature of the housing market in New England.
The healthy sales pace over recent months can be attributed to todays healthy local labor market, low mortgage rates, and recent gains in household formation. This years severe winter weather also delayed the start of the traditional spring market, resulting in a higher than normal closing activity throughout the entire summer season.
- The median selling price for single-family homes rose for an twelfth consecutive month in September to a new record high price for the month of September of $455,000. This reflects annual price growth of 7.5 percent from a median price of $423,450 in September 2014, and is also 3.4 percent higher than the previous high price for the month set in September 2014 when the median price for homes sold was $440,000. The median selling price for single-family homes has now increased on an annual basis in 35 of the past 36 months (dating back to September 2012).
However, on a month-to-month basis the median selling price decreased, declining 8.5 percent from a downwardly revised median of $497,100 in August, due in large measure to a sharp decline in sales of high-end homes of $800,000 or more which fell by nearly one-third (30%) between August and September.
The current median selling price reflects todays low inventory levels, improved optimism about the economy and housing market, and pent-up demand from millennials looking to transition from renters to homeowners. These conditions favor sellers, as evidenced in the ratio of original list price to sales price which increased steadily over year ago levels to 97.5 percent in September, making it the thirty-first 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 September, the median price has climbed 46.8 percent from March 2009 when home values bottomed out at $309,950.
- The average market time for homes sold in Greater Boston declined on an annual basis during September, but only modestly so, from 67 days on market in September 2014 to 64 days on market this September. Its just the second time in the past 15 months that average listing time has decreased from year ago levels. On a month-to-month, listing time increased by three days from an average of 61 days on market for home sold in August as the limited supply of homes for sale continues to present challenges for prospective home buyers.
- Pending home sales rose for a sixth consecutive month during September, increasing 27.6 percent over the past 12 months from 1,058 homes placed under contract last September to 1,350 homes that went under agreement in September 2015. The 1,350 pending sales recorded this September sets a new record high for the month, topping the previous high of 1,141homes put under contract in September 2004. On a month-to-month basis, pending sales also rose somewhat unexpectedly by 10 percet from a downwardly revised 1,225 single-fmily homes put under agreement during August.
- The inventory of single-family homes for sale continues to trail historic norms, declining on an annual basis by 10 percent, or over 400 properties, compared to the same month last year. Its the forty-seventh time in the past 48 months that the number of homes for sale has decreased from the same month one year earlier. With less than 3,900 homes listed for sale as of September 30, the supply of homes on the market is at its lowest level for the month of September in more than a dozen years.
However, the supply-demand imbalance is getting better. For example, at the end of the first quarter of this year the number of listings on the market was down 27 percent in March from the same month last year. Meanwhile, on a month-to-month basis the supply level improved a modest 3.6 percent from an upwardly revised 3,736 single-family properties in August.
Additionally, the number of new listings coming onto the market increased nearly 11 percent on annual basis to 2,040 in September, and rose a much more substantial 41 percent (or by nearly 600 homes) from August. This is all good news for home buyers who will benefit from increased home ownership opportunities as a result of the larger selection of home available for sale.
Inventory as expressed in months of supply also rose on a month-to-month basis, improving to 3.2 months of supply in September from 2.2 months in August, but remained down from 4 months of supply in September 2014. In a balanced market 78 months of supply exists, so at the current sales pace there remains an insufficient supply of homes available to meet buyer demand.
The Condominium Market:
- Sales of condominiums increased on an annual basis for a fourth consecutive month in September, climbing 4.1 percent from 862 condos sold last September to 897 in September 2015. This follows seven consecutive months of sales declines from November 2014 May 2015. Last months sales total is the third highest on record for the month basis, surpassed only by the 1,028 condos sold in September 2005 and 987 condo units sold in September 2004.
Similar to the single-family home market, condominium sales declined nearly 26 percent on a month-to-month, from an upwardly revised 1,211 units sold in August.
Demand for condos remains strong, especially among entry-level buyers looking to convert from renting to home ownership, overseas investors, and suburban empty-nesters looking to downsize or relocate to Boston. 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 rose on an annual basis for an eleventh consecutive month in September, increasing a modest 3.4 percent from a median price of $414,500 in September 2014 to a new record high median price for September of $428,500 this year. This marks the thirtieth (30) time in the last 31 months the monthly median price has risen from the same month one year earlier the lone aberration occurring in October 2014 when the median price slipped 0.6 percent from the same month one year earlier.
Like the single-family home market, the median selling price for condominiums also declined on a month-to-month basis in September as sales activity in the luxury market softened. The median price for condos last month was down 6.8 percent from the all-time record high median price of $460,000 set consecutively during both July and August, as condo units priced at $1 million or more fell by more than one-third (38%) from 97 units sold in August to 60 in September 2015. Nonetheless, since the monthly median price bottomed out at $259,500 in January 2009 during the last market correction, the median condo selling price has risen 65 percent.
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, September marks the sixth consecutive month the ratio of list price to sale price has stood at or above 99 percent meaning the typical condo owner was able to sell their unit for nearly full asking price or above the original list price.
- The average market time for condominiums to sell decreased on an annual basis for an eighth time in the last nine months in September. The typical condo sold in September was listed for 52 days before an offer was accepted, which is down slightly from an average of 53 days on market in September 2014. However, on a month-to-month basis average days on the market increased from 46 days in August due to an insufficient inventory of available units to meet buyer demand.
- The number of condominiums placed under agreement rose for a seventh consecutive month in September, increasing 7 percent over the past 12 months to 895 condos placed under contract this September. Pending sales rose even more sharply on a month-to-month basis, improving 10 percent from a downwardly revised 814 condos put under agreement in August, offering solid evidence that buyer demand remains strong and that sales volume in 2015 should exceed last years sales pace.
- The number of condos on the market decreased for a fiftieth (50) consecutive month in September, declining 6.4 percent over the past 12 months to 1,832 condos for sale, and by nearly one-fifth (18%) since September 2013. 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 much of the past two years.
However, similar to the single-family home market, the condo market also has seen marked improvement in the supply-demand imbalance in the near term. For example, at the end of the first quarter of this year the number of listings on the market was down 30 percent in March from the same month last year. Furthermore, on a month-to-month basis listing inventory rose a healthy 11 percent from an upwardly revised 1,648 condo units for sale in August.
Additionally, the number of new listings coming onto the market increased 11 percent on annual basis to 1,421 in September, and rose a much more substantial 56 percent (or over 500 condo units) from August. This is welcomed news for buyers who have been frustrated by a shortage listings and fierce competition for condo units in the local market for years.
At the current sales pace there is a 2 month supply of condos available for sale, which is down from a 2.3 month supply in September 2014, but up from 1.4 months of supply in August. As a result, 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.