Here's December 2015s Monthly Indicators report from the Greater Boston Association of Realtors
Boston Real Estate Market Trends
2015 ends with most closed sales in a December since 2004. Strong buyer activity, low inventory and low interest rates pushed prices up again on homes in. December. 2015 was a year of higher sales, very low inventory and prices back to pre-recession levels.
- December single-family home sales were UP +14% over last year and UP +7.7% for the year
- December Single-family median prices were UP +4.7% at $465,000 (+3.7% for 2015)
- December condo sales UP +7.6% (UP +0.6% for the year) and median prices UP ($445,000) UP +8.4% for the year ($450,000)
- Inventory in December DOWN -17% to 2,362 and Condominiums DOWN -7.7% to 1,206
- SF listings added to the market in December UP +5.3% over last year. (635 from 603 in 2014)
- Condo listings added to the market UP +16.9% over last year. (463 from 396 in 2014)
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The Single-Family Home Market:
- Sales of detached single-family homes improved on an annual basis for a seventh consecutive month in December, increasing 14 percent over year ago levels, from 1,133 homes sold last December to 1,292 in December 2015. Last months sales volume is the most ever recorded during the month of December in Greater Boston, eclipsing the previous record of 1,266 homes sold in December 2003 by 2.1 percent.
On a month-to-month basis, single-family home sales also rose sharply, increasing an impressive 25.4 percent from an upwardly revised 1,030 homes sold in November. Notably, Decembers sales total is the best in four months, and marks the first time in five months that sales have risen on a month-to-month basis. The last time sales volume was greater was this past August when 1,930 single-family homes sold.
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, which led to a 12.7 percent jump in sales during the final quarter of year from 3,141 homes sold in the fourth quarter of 2014 to 3,539 homes sold over the final three months this year. Single- family home sales also were up for the year, though more modestly so, with the 14,313 homes sold in 2015, reflecting an annual increase of 7.7 percent from the 13,294 homes sold in 2014.
- The median selling price for single-family homes rose for a fifteenth consecutive month in December to a new record high price for the month of December of $465,000. This reflects annual price growth of 4.7 percent from a median price of $444,000 in December 2014, and marks the thirty-eighth time in the past 39 months (dating back to September 2012) that the median selling price has improved on an annual basis.
On a month-to-month basis, the median selling price did slip modestly, decreasing 2.6 percent from a median of $477,250 in November, as some sellers demonstrated an increased willingness to negotiate on price in order to close on the sale of their property prior to years end.
For the three months ending in December, the median selling price rose 3.4 percent, from a revised median price of $440,000 in the 2014 fourth quarter to $455,000 during the same three-month period this year. Meanwhile, for the year, the median selling price for detached homes appreciated a healthy 9.8 percent, climbing from an annual median price of $410,000 in 2014 to $450,000 this past year.
The steady gain in the median selling price over the past year reflects todays low mortgage rate environment which allows home buyers to purchase more home, improved optimism about the economy and housing market, and the broad appeal of home ownership in a marketplace where rents have risen sharply for several years. Not surprisingly, sellers are benefitting, as evidenced by the ratio of original list price to sales price which rose more than one-half of one percent over the past 12 months to 96 percent, and has now reached or exceeded 95 percent for 34 consecutive months.
The median price has increased a healthy 50 percent from March 2009 when home values bottomed out at $309,950.
- The average market time for homes sold in Greater Boston increased on an annual basis for the first time in four months during December, though it only rose by a single day over the past 12 months to 80 days on market this December. Additionally, market time also increased on a month-to-month basis by over a week, climbing from an average of 70 days on market for homes sold in November. Longer listing times are certainly not uncommon during the winter selling season, but in this case the added market time until closing may reflect industry adjustmens following implementation of the new TILA-RESPA Integrated Disclosure (TRID) rules this past October.
- Pendng home sales rose for a ninth cosecutive month in December, increasing 20 percent over the past 12 months from 654 homes placed under contract last December to 786 homes that went under agreement in December 2015. This makes the past month the most active December for pending sales in a dozen years, dating back to December 2003 when 807 homes were put under contract. On a month-to-month basis, however, pending sales eased, falling nearly 25 percent from a downwardly revised 1,046 single-family homes put under agreement in November.
- The inventory of single-family homes for sale continues to trail historic norms, declining on an annual basis by 17 percent, or nearly 500 properties, compared to the same month last year. Its the fiftieth (50) time in the past 51 months that the number of homes for sale has decreased from the same month one year earlier. With just 2,362 homes listed for sale as of December 31, the supply of homes on the market is at its lowest level for the month of December in more than a dozen years. Not surprisingly, inventory also declined on a month-to-month basis, with nearly 1,000 fewer homes listed for sale in December, a decrease of nearly 30 percent from November. That means far fewer listings and home buying opportunities for those searching for a new home entering the new year, making now a great time to sell.
Inventory as expressed in months of supply also fell on both an annual and month-to-month basis last month, declining to 1.8 months of supply from 2.5 months of supply in December 2014 and 3.3 months in November 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:
- After experiencing its first sales decline in five months during October, the condo market continued its rebound last month, with sales up steadily on an annual basis by 7.6 percent, from 815 units sold last December to 877 in December 2015. Its the second best sales total on record for the month of December in Greater Boston, surpassed only 906 condo sales which closed in December 2004.
Condo sales also rose on a month-to-month basis, jumping an even more substantial 14 percent from an upwardly revised 769 condos sold in November. The December sales total is the highest in the past three months, and marks the first time in five months that sales have risen on a month-to-month basis in the condominium market.
The healthy sales pace over recent months can be attributed to the strong local jobs market, low mortgage rates, and recent gains in household formation.
- The median selling price for condominiums rose on an annual basis for an fourteenth consecutive month in December to a new record high median price for the month of $445,000. This reflects annual price growth of 5.2 percent from the December 2014 median price of $423,000, which is not unexpected given the limited supply of units for sale. The condo median price has now risen on a year-over-year basis for 33 of the past 34 months the lone aberration occurring in October 2014 when the median price slipped 0.6 percent from the same month one year earlier.
On a month-to-month basis, the median selling price for condominiums slipped a modest 1.1 percent, from $450,000 in November. 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 71.5 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, with the ratio of list price to sale price having risen over one-half of one percent during the past 12 months to 98.4 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 declined on an annual basis for the tenth time this year during December. The typical condo sold in December was listed for 53 days before an offer was accepted, which is down slightly from an average of 56 days on market in December 2014. On a month-to-month basis, the typical time to sell a home fell even more significantly, dropping by nearly one week from an average of 58 days on market in November.
- The number of condominiums placed under agreement rose for a tenth consecutive month in December, increasing 22.4 percent or 100 units over the past 12 months to 547 condos placed under contract this December. However, pending sales fell by 24 1/2 percent on a month-to-month basis, from a downwardly revised 725 condos put under agreement in November.
- The number of condos on the market decreased for a fifty-third consecutive month in December, declining 7.7 percent over the past 12 months to approximately 1,200 condos for sale, and by 20 percent since December 2013. The current inventory of condos for sale is the lowest monthly listing total in over a dozen years, 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, nine months ago in March the number of listings on the market was down by nearly one-third (30.3%) from the same month last year. In addition, the number new listings coming on to the market improved by 17 percent last month from the previous December.
Unfortunately, demand still exceeds the supply of condos for sale. At the current sales pace there is a 1.4 month supply of condos available for purchase, which is down from a 1.6 month supply last December and 2.3 month supply in November. Thus, the on-going shortage of listings continues to put upward pressure on prices, albeit more modestly so, and is preventing an even more robust market from occurring.