Here's October 2015s Monthly Indicators report from the Greater Boston Association of Realtors
Boston Real Estate Market Trends
October closed home sales up on strong buyer activity over the late summer/early fall. Low supply in October and ongoing buyer demand pushed home prices higher. Seven straight months of new listings added to the market are giving buyers more options.
- October single-family home sales UP +13.0% over last year
- October Single-family median prices were UP +1.1% at $440,000
- October condo sales DOWN -7.3% and median prices were UP +15.5% at $454,950
- Inventory in October DOWN -12.1% to 3,688 and Condominiums DOWN -10.0% to 1,773
- SF listings added to the market in September UP +2.6% over last year. (1,586 from 1,546 in 2014)
- Condo listings added to the market UP +5.3% over last year. (1,137 from 1,080 in 2014)
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The Single-Family Home Market:
- Sales of detached single-family homes improved on an annual basis for a fifth consecutive month in October, increasing 13 percent over year ago levels, from 1,048 homes sold last October to 1,184 in October 2015. Last months sales volume sets a new record for the month of October in Greater Boston, surpassing the previous high of 1,165 condos sold in October 2004.
On a month-to-month basis, single-family home sales fell for a third consecutive month, sliding a modest 4.6 percent from an upwardly revised 1,241 homes sold in September. Although the 1,184 homes sold during October is the fewest for any month since May, this decline is not unexpected since housing demand typically softens from the summer months through winter due to the seasonal nature of the housing market in New England. The healthy sales pace of recent months can be attributed to todays healthy local labor market, low mortgage rates, and recent gains in household formation.
- The median selling price for single-family homes rose for an thirteenth consecutive month in October to a new record high price for the month of October of $440,000. This reflects annual price growth of 1.1 percent from a median price of $435,000 in October 2014, and marks the thirty-sixth time in the past 37 months (dating back to September 2012) that the median selling price has improved on an annual basis. Its the smallest percentage increase in median selling price this year, but comparable to the 1.6 percent gain in median price between last March and March 2015.
On a month-to-month basis the median selling price decreased in October, declining 3.3 percent from a median of $455,000 in September, due in part to a steady decline in sales of high-end homes of $800,000 or more which fell by approximately one-fifth (19%) between September and October.
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 has now reached or exceeded 95 percent for 32 consecutive months.
As of October, the median price is up 42 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 October, but only ever so modestly from 71 days on market in October 2014 to 70 days on market this October. Its just the third time in the past 16 months that average listing time has decreased from year ago levels. On a month-to-month, listing time increased by nearly one week from an average of 64 days on market for home sold in September as the limited supply of homes for sale continues to present challenges for prospective home buyers.
- Pending home sales rose for a seventh consecutive month during October, increasing 20.5 percent over the past 12 months from 1,170 homes placed under contract last October to 1,410 homes that went under agreement in October 2015. Its second highest pending sales volume on record for the month of October, topped only by the 1,468 homes put under contract in October 2003. In an unusual occurrence, pending sales also rose steadily on a month-to-month basis, climbing 8.8percent from a downwardly revised 1,296 single-family homes put under agreement during September.
- The inventory of single-family homes for sale continues to trail historic norms, declining on an annual basis by 12 percent, or over 500 properties, compared to the same month last year. Its the forty-eighth time in the past 49 months that the number of homes for sale has decreased from the same month one yar earlier. With less than 3,700 homes listed for sale as of October 31, the supply of homes on the market is at its lowest level for te month of September in more than a dozen years. nventory also declined on a month-to-month basis by 9 percent from an upwardly revised 4,057 homes listed for sale in September.
Although the number of new listings coming onto the market in October increased modestly by 2 percent on an annual basis, the number of new listings declined 22 percent from September.
Consequently, inventory as expressed in months of supply also fell on both an annual and month-to-month basis last month, declining to 3.1 months of supply from 4 months of supply in October 2014 and 3.1 months in September 2015. 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 declined on an annual basis last month for the first time since May, falling 7.3 percent from a record high for October of 865 condos sold last year to 802 in October 2015. Additionally, condominium sales slowed on a month-to-month basis for a fourth consecutive month (which is not unusual for this time of year), sliding 11.4 percent from an upwardly revised 905 units sold in September. Despite the decrease, sales activity remains historically strong, as last months sales volume of 802 units sold is the fifth best on record for the month of October in Greater Boston.
While demand is still healthy, a scarcity of listings is putting upward pressure on prices and reducing affordability in the condo market and that is affecting entry-level buyers in particular. In fact, in October the monthly median selling price for condominiums eclipsed the median selling price for single-family homes for just the fourth time ever, so with a larger number of properties to choose from more first-time buyers are looking to the detached single-family home market to buy.
- The median selling price for condominiums rose on an annual basis for an twelfth consecutive month in October to a new record high median price for the month of $454,950. This reflects sharp price growth of 15.5 percent from the October 2014 median price of $394,000 and is 14.9 percent higher than the previous record high price for the month of $396,000 set in October 2013. The last time the monthly median price rose by a larger percentage on an annual basis was March 2013 when the median selling price jumped 20 percent from the previous March. The condo median price has now risen on a year-over-year basis for 31 of the past 32 months the lone aberration occurring in October 2014 when the median price slipped 0.6 percent from the same month one year earlier.
The median selling price for condominiums also increased on a month-to-month basis in October, climbing steadily by 6.2 percent from a median of $428,500 in September. 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 75 percent.
Notably, 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, October marks the seventh 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 a ninth time in the last 10 months in October. The typical condo sold in October was listed for 52 days before an offer was accepted, which is down slightly from an average of 53 days on market in October 2014. Meanwhile, on a month-to-month basis average days on the market remained unchanged from September.
- The number of condominiums placed under agreement rose for an eighth consecutive month in October, increasing nearly 19 percent over the past 12 months to 977 condos placed under contract this October. Pending sales also rose steadily on a month-to-month basis, improving 12.7 percent from a downwardly revised 867 condos put under agreement in September.
- The number of condos on the market decreased for a fifty-first consecutive month in October, declining 10 percent over the past 12 months to 1,773 condos for sale, and by nearly one-fifth (18%) since October 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.
Notably, however, the condo market has seen marked improvement in the supply-demand imbalance in the near term. For example, six months ago in April the number of listings on the market was down by more than one quarter (26.6%) from the same month last year. In addition, the number new listings coming on to the market improved 5 percent last month from the previous October, but is down 20 percent from September. As a result, demand still far exceeds the supply of condos for sale.
At the current sales pace there is a 2.2 month supply of condos available for purchase, which is down ever so slightly from a 2.3 month supply last October, and stable from September. Thus, the on-going shortage of listings continues to put upward pressure on prices and is preventing an even more robust market from occurring.