Massachusetts Home Sales Hit 10 Year Low
The Massachusetts realtors have some numbers out. “The sales decline of 32.5 percent that took place between December and January is not unusual and generally reflects seasonal changes that occur in the local housing market each winter as cold weather settles in and the holiday season occupies consumers’ time.”
“Active listings for detached single-family homes rose steadily over the last month to 24,331 this January, rising 7.7 percent from December when there were 22,593 listings.”
“The condominiums sales decline of 25.2 percent that occurred from December and January is not unusual and reflects seasonal changes in the local housing market. The condo inventory levels continue to rise. Active listings have increased 25.4 percent in the past year, up from 9,436 units in January 2004 to 11,837 this January. Also, compared to a month earlier, condo listings have increased 16.3 percent from December.”
“Selling prices for detached single-family homes rose steadily last month to a statewide median price of $340,450 in January, but it appears the rate of price appreciation may be starting to moderate. In fact, over the past 12 months, the median selling price increased just 7.4 percent, the smallest gain in year-to-year price appreciation since last January when the price rose 7.5 percent over January 2003. The all-time monthly high median price remains $360,000 set in June 2004.”
The statewide median price for single family homes was $350,000 at the end of 2005. The median at the end of 2004 was $345,000.
The Boston Globe has this update. “The recent slowdown in the state’s housing market deepened in January as sales of single-family homes fell to the lowest level for that month in a decade, MAR said Tuesday. The 2,345 home sales statewide in January represented a 21 percent drop from sales in the same month a year earlier, and marked the lowest January total since 2,332 homes were sold in the first month of 1996.”
Those monthly links on the MAR site are PDF files.
Okay, these are interesting numbers. (Did I mention my obsession with numbers?) It looks like median prices are down 5.5% since their peak.
(In Las Vegas, they always post a caveat… when condo conversions are removed from the equation, prices are actually up. I have no idea what the state of condo conversions is in Massachusetts, and I didn’t look that closely at the reports, but it might make a difference.)
Anyway, the $20,000 in savings is neatly offset by the 1% rise in interest rates. The gamble going forward is prices will fall faster than interest rates will rise. Otherwise, houses will remain at current unaffordable levels.
The slowing of price appreciation foretells a drop in buyer interest; in realestate sales; in construction; in home-based purchases; in lending - in rising unemployment rates. The interplay of negative economics and the fantasy of ever rising home prices is coming to a neighorhood near you!
‘In fact, over the past 12 months, the median selling price increased just 7.4 percent’
MAR must be adding the condo numbers together with SFH for this. Note that they didn’t point that out.
Ben,
Wasn’t there a time about a year ago that you posted that the NAR was going to change the method they used for the sales numbers? I don’t know if it pertained to new or existing, but I thought they just recently (within the last year) started combining sales of SFH and Condos together, making comparisons to previous years difficult.
NAR are a bunch of crooks!They are a propaganda machine. They make a bunch of money when they have a sh@tload of drones running around trying to sell you an overpriced dog.
Ben- They must have combined condo and SF home data for that number you posted.
but happy for our landlords that they got out in the nick of time.
I just looked at the Mass site and in today’s Jan. update they show SF home prices are down .1% YOY and down 7.9% off the high set in July & Aug.05. This is the first time in over 9 1/2 years that there has been a decline in SF home prices in MASS. This is BIG. I’m actually surprised at the January sales drop because in my observations of the few markets I watch around the Boston burbs, it seemed that sales activity actually picked up steam in early January. However, it has pretty much died down in the last few weeks. There are definitely some bargain hunters out there snapping up the good stuff when it’s priced aggresively. The house we are currently renting being one - with multiple bids no less! We’re apartment hunting again
The Massachusetts realtors have some numbers out. “The sales decline of 32.5 percent that took place between December and January is not unusual and generally reflects seasonal changes that occur in the local housing market each winter as cold weather settles in and the holiday season occupies consumers’ time.”
It doesn’t get cold here every December and January???? Wasn’t January the warmest on Record????
Plenty of homes here in my Mass. Neighborhood and no one at open homes. Come on Down !!!!!!!
Funny how January has been one of the warmest Januarys on record here in the North East!. Have seen a lot of properties for sale, with one sold, and another one just fall out (saw the sign go to sale pending, then sold, and now back on again.)
February by the way has been way colder than January, and even though it was the warmest January in years, my gas bill was twice that of last year. I would hate to see what the gas bill for one of those Mc mansions is going for.
LV: As pointed out repeatedly here, you can eventually refinance to a lower interest rate, but never has a bank reduced the pricipal amount owed. Every rate hike is just killing the speculators, and the IO ARM crowd. 30 year mortgages with fixed rates are rather untouched, but few, if any can afford them in the bubble states.
I know for sure I could afford a fixed mortgage in the mid 250-300 range, but there are no decent properties at that level yet. Yet people making less than I are in 300K mortgages. This by the way is using a 28% ratio for a mortgage and not the weird 55 to 60% that a lot of people are using right now.
Let me think about that for a sec. I think that either we will see rates at around 5% if the economy takes another dump in a year or two as predicted, and by then Nobody will want to touch a house as it was the worst investment ever, and houses will become reasonable again. Check your 30 yr mortgages and they are still around 6.25, and it is forecast to stay there for most of the year. A 400K POS 50 year old house is only worth that because somebody down the street just paid that. It could go down to 40K tomorrow if another joker down the street goes into foreclosure and that is what is owed to the bank….
Real estate is only worth what someone is willing to pay for it.
BTW those ARM and IO loans are being sold at market rates based on short term rates. Check the Yield curve, and notice that long term debt has lower yields than short term. It is an anomaly, but a powerful indicator of things not being right.
All in all, look for those with ARM adjusting upwards this year to either bail, or sell their castle. Few will have the cashflow to afford a 30 year fixed with no equity/Negative equity.
I’ve always had to laugh. Just how is it that people were “too busy” to buy a house but apparently had lots of time to list a house and drive up inventory?
Ok here is what is going to happen next…
The NAR seems to be pushing the numbers and using Summer 05’s numbers still even though the last six months have been flat.
Expect to see phrases and statistics this year and into next stating
“Home prices increase 25% over last 24 months”
“Home prices increase 19% over the last 30 months”
“Home prices increase 28% over the last 5 years”
LOL. You hit it right on the head. I haven’t seen a single quote saying “prices have dropped 10% from their August ‘05 high”. Talk about manipulating the numbers.
They have to massage this info coming out so the last of the “smart” ones can get thru the bottleneck before the rest of the herd realizes the trap door has been opened.
BINGO!
home price increase 10% over the last 10 years
home price increase 15% over the past 25 years
home price increase 20% over the past century
Actually, thats under. You can get impressive sounding numbers if you go back 20-30+ years, as simply (inflation + ~1% give or take) seems to be the real long term trend for real estate.
that would be the next phase..”decadely seasonally” adjusted numbers!
These numbers are ALL FOR JANUARY 2005 not January 206. Check this link:
http://marealtor.com/content/AssetMgmt/Documents/Member%20Resources/Research/Jan05MLS.pdf
David
Bubble Meter Blog
This suggests that Mass has been in the post-bubble flat-phase for almost a year now. Hardly the 6% y/y gains the bulls have been predicting post-bubble.
Also need to watch the MLS “sold price.” Many realtors entered the asking price instead of actual sold price to inflate the number.
Do you have proof of this?
winter weather my a_S
next month they’ll go to a 5 year comparison- doesn’t anyone challenge these spinners ?
there’s a good dustup on another bubble blog with the blog owner challenging some No. VA Realtor numbers. There math was all worng and they keep trying to fix it, and they still get it wrong.
Hey they manipulate numbers all the time. Here in Orlando they claimed home prices rose 42% between Q4 in 2004 and Q4 2005. What they failed to mention was they used Oct 04 home price and Nov 05’s record home price, failing to mention Nov average price was 261,000 and Dec average price was 238,000.
If they truely went with Dec 04 to Dec 05 the rise would have only been about 28% (still very very good).
The NAR is in the business of selling homes. Lately they have been selling more “investments” than homes using tactics and figures that would cause fund managers and stock brokers to loose their license or possibly end up in jail.
Realtors used to be part timers, teachers, stay at home moms and so on that wanted to make some cash on the side…. Now it seems like anyone who can’t get a job becomes a full time realtor.
If you want to really make a killing in real estate?
Come up with this statistics and figures on your own, put together a real estate investment seminar, charge $1200 a head to attend your exclusive seminar then put all the figures in books, cd’s and dvd’s explaining how they should borrow money any way they can and buy investment property on borrowed money. Afterall if you look at it over the last 500 years the price of real estate has only risen.
Nor does the price of any other resource. Over the past 50 years the price of everything has gone up… Its called inflation. Yeah stocks can tank but over all, the prices of resources are ultimately higher over a long enough period of time.
…. Now it seems like anyone who can’t get a job becomes a full time realtor.
You are quite right……Only 5 percent chose real estate as their first career;…
… or mort broker.
IRS eyes flippers
When you complete several real estate transactions in a short time, don’t be surprised to learn that the IRS might consider your property transactions as a business or trade rather than as an investment strategy, says Davis. In that case, there’s no way to get out of paying the higher ordinary income tax rates.
Looks like flippers are in a bind. Make a profit and get TAXED or take a loss. Both ways they loose.
It is clear that in MA SFH homes are down 5% from last spring. That is what I calculate from a few examples (nice homes fairly priced, comparable, etc.).
My personal observation is that condos are slowing and could be the first major crack. There is an unsold inventory in my town, ton on craigslist for the whole metro area and a drive around Boston shows a lot still under construction.
You’re probably right. There are fundamental reasons why condos are almost always the ‘first major crack”.
I thought I’d post this again.
Global credit ocean dries up
(Filed: 24/02/2006)
The cash machine that sustained a world boom is about to close, and it’s going to get ugly, says Ambrose Evans-Pritchard
Massachusetts is OVER, big time. Every single street has ‘for sale’
signs on it. UMass in Dartmouth has a group that studies the
decline of the economy in Massachusetts. Some of their numbers:
50% of families with children — gone since 2000. No uptick in
employment; no more ‘upwardly mobile’ 20-somethings, etc.
It seems to me that a good 80%-90% of Massachusetts is going to
to be foreclosing. http://www.foreclosuresmass.com tells the story.
The reason is that Massachusetts is filled with little towns that
are nothing more than bedroom communities for Boston. This is
what the majority of Massachusetts IS. With the exception of
maybe Worcester, the rest of Massachusetts is going to undergo
50% - 60% reductions in home value.
And it is already too late to get out if you need to do so.
Massachusetts is no more Boston and environs than is SoCal nothing but Los Angeles and its suburbs. Mass is indeed a lost cause, New Orleans North with winter instead of hurricanes. I don’t see how raisng the last generation through college only to see them leave is a sustainable model.
this comment is totally idiotic and shows no real knowledge of the MA market.
I was born in Framingham, grew up in West Springfield, college in Boston/Cambridge and Worcester. Left after dropping off my thesis. I am the oldest child of an oldest child so let’s see where my cousins and siblings are now. One cousin still lives in West Springfield but his parents, my aunt and uncle live half the year in Florida. My mom full time in Florida as do several of her cousins. Another two cousins still live in Framingham (in my grandparent’s house) but all the rest are in California, Oregon, Washington State, various other states. we are talking about nearly all top college graduates, MIT, UNH, Notre Dame. The state is dying and doesn’t even know it.
I haven’t seen a “where grads are going” story. Here’s my story- I left Ann Arbor after school in 82 and came to Boston because MI was a wasteland (16% unemployment). Boston was so-so, but better than Chicago where I was from. Knew lots of people moving here from MI. It was one of those places to go at the time (along with SF, NYC and CO)
Rode boom-bust-boom-bust, and now catching a new boom. MA was known as the place grads stayed, and funny thing is that AnnArbor has seen that same phenom.
Most of the young people I meet now are from here.
I’ll have to keep my eyes peeled for stories about grad migration. If I had to guess I think TX, WA, and LV or SD maybe.
I would guess that the extremely high housing costs are driving the grads away. When I moved to eastern MA in 1987 after leaving UMass-Amherst the area was kind of expensive on the whole, but there was a nice mix of housing options. Between the abolishment of rent control in Boston/Brookline/Cambridge and the real estate boom (which saw a lot of previously affordable rentals in places like Somerville getting converted to condos by “investors”) the affordable housing got pushed far away from the urban center. What hipster wants to move to the outer ‘burbs?
Robert,
I can’t agree with you more I grew up and Mass Educated in Mass and moved to Austin. I came back to be closer to family but I can’t stay much longer. I am currently planning my escape. I think there is at the most 10 years left before things get really bad. Once the big boomer migration starts its all bad news.
He does have a point though. MA has lost the technology edge, and the attractiveness that it had in the late 90’s. There are less jobs, few career oportunities in established companies, and housing prices are completely outrageous, pricing out most of new buyers that have 2 firing braincells.
OTOH most of the towns and cities outside Boston have lost their manufacturing base due to high costs, high taxation, and even higher wages. I live in the Attleboros, where there was once upon a time, a great concentration of jewelery factories. These factories provided employment and stability to the region. Since the 1960’s most of these have either moved, been bought out, or have gone completely out of business. Same for TI, who just sold out their control division in Attleboro. Same for many small companies that have found MA unsustainable. The Attleboro economy is kept alive by those who take the train into Boston, and work there. The locals work in town hall, and they in turn are supported by outrageous taxes on property. What will happen to them, when people figure out that paying 25 dollars per thousand is more than paying rent in a comparable property? Talk about throwing money out the window!
Not too bash MA, but MA has turned into a state for rich democrats only that do not want anybody else to live or prosper here. Talk about social darwinism.
I’m with you on MA is not that great a place anymore. If I was a recent college grad no way I would stay here. Not sure where I’d go, but no reason to stay unless I got a super high paying job.
Most salaries are higher in MA. This was a dabate earlier and I checked it out.
Quality of life her is good (I think). Ocean/beach, mountains, scenic towns. I don’t think the commuting or weather is as big a factor as other places.
My company has almost 1000 manufacturing employees in MA, but our growth is in the midwest where land and energy is cheaper. Not moving the plants, but not expanding either.
I haven’t really thought about how the gov’t influences things. I know my brother lives in metro Chicago and they have high taxes and lots of municipal employees also.
I dislike posts without any reasoning behind them.
Also. I agree that MA has lots of cool things, and that if you are going to have children, like I plan on having with my wife, it is as good a place as any for raising them, good colleges, and good schools. I get annoyed that people who bought a reasonable house in 1994-2002 think that they are entitled to that 300% appreciation, and will not budge.
What is going to break their back, in my mind is taxes. I rent for around 700 mo. That in turn is the tax rate on a property that is equivalent to the one I am living in. The average tax bill for the place I live in is around 7-8K a year. Add upkeep, and mortgage, and those pesky things that seem to creep up on you, and suddenly you are paying 3 or 4 times to buy a house that you could rent much, much cheaper. My wife tells me that we will not buy ANYTHING until rents are more expensive than buying a house. That could take some time. Meanwhile, I am going to lowball some mcmansions out there. Maybe if we all use zillow, and offer the SAME price as what they paid for their property 10 years ago, we can speed this thing up, as the last time I looked my car, or for that matter, anything that i have bought has lost 40% by taking it out of the parking lot/ store, so why not houses?
i wish i were married to your wife pinch_a_penny…my hubby is sooo ready to jump on the overpriced housing here in AA. It’s not as nutty as MA, surely, but the MI economy is in a dive, AA is losing it’s appeal, and even though sure we stayed after school here (i’m still working on that school thing…) and have no desire to go back to MA (hubby’s from there, but got sick of it, mostly the people there I think actually…) even though its got tons more natural beauty than here!
cheers…
Thank you for that. I grew up in MA, and while it has its highs and lows I think in the long term it tends to be economically pretty healthy. The high density of colleges keeps things lively on the cultural front, and you have your pick of city or “great outdoors” nearby. As long as you’re physically hardy enough to deal with the weather (this year has not been indicative of a typical New England winter!) the quality of life can be quite good in MA. Living in NYC for several years has only made me appreciate MA more. DH and I are planning to move back up there next year (family obligations) and rather than seeing “doom” we’re hopeful for what we regard as a return to sanity.
The sales decline of 32.5 percent that took place between December and January is not unusual and generally reflects seasonal changes that occur in the local housing market each winter as cold weather settles in and the holiday season occupies consumers’ time.”
THESE NUMBERS ARE 2005 NUMBERS NOT jANUARY 2006. lOOK AT THE mar DATA
from the same article…
Sixteen percent of members own at least one vacation home. Additionally, 39 percent own additional residential properties for investment (outside of primary residences and vacation homes), and 13 percent hold an ownership interest in at least one commercial property. “Realtors® put their money where their mouth is – they believe in the value of real estate as an investment and act on those convictions for the benefit of their families,” Mansell said.
I am not surprised that we are being told a very rosey pricture of RE market.
Here’s another favorite Natomas Park (Sacramento, CA) reduced price listing. Can anyone tell me if a $100 price reduction is likely to “swing” a deal?:
8 Masterson Ct
Sacramento, CA 95835
3 bedroom, 2 bath, 1557 sq ft.
Days on Market: 87
Price Reduced: 02/12/06 — $416,000 to $415,900
Reduce it a 100k and will talk. Some bozos around here drop the price even 5k and they think they are giving someone a great deal. If you have no lookers drop it 10% at least. They must have a b@tchen realtor!
LOL. This is why those greatest fools are going to chase the market down, a day late and 100,000 dollars short.
You all know I am a major bear on housing, BUT, I will not be confident that prices have begun their inevitable decline until the spring sales prices start coming in. Median prices typically rise from Jan-June, and then tread water the rest of the year. With inventories way up, and sales volume down, I think we will see those declines. However, seasonally, the price pattern so far (nationwide) is not unusual.
I agree with you 100%. Until we see how things shape up during the Spring/Summer 2006, the jury is still out on the question of MA house bubble implosion.
Your hesitation is well reasoned, but in the context of everything else happening in the macro economy, the you-know-what has hit the rotating thing, and there’s no reason for a spring rally.
The fat lady hasn’t sung yet, but she’s warming up.
I agree, but I also think the spring sales volumes will be significant, particularly March where there is normally a big jump from February. If there isn’t the normal lift this year, we can expect downward pressure on prices for the rest of the year simply due to inventory overhang.
I’m going to be watching the sales anecdotals like a hawk for the next few weeks.
The January numbers were released two weeks after the association reported Massachusetts’ expensive housing market softened in 2005, with trends favoring buyers accelerating late in the year.
But Wluka said a short-term turnaround appears to be under way.
“We’ve seen a measurable increase in buyer traffic over the past several weeks, however, due to the mild weather, a drop in mortgage rates, and more realistic pricing on the part of home sellers,” he said.
Um, asshole, the weather has been in the fricking 50’s all of December, January, and February, but just now the buyers are flocking out to buy because of the warm weather. Go fucking die you lying piece of shit.
Uhm, no, it is unusual sales drop:
Massachusetts home sales hit 10-year low for January
February 28, 2006
WALTHAM, Mass. –The recent slowdown in the state’s housing market deepened in January as sales of single-family homes fell to the lowest level for that month in a decade, the Massachusetts Association of Realtors said Tuesday.
http://www.boston.com/news/local/massachusetts/articles/2006/02/28/massachusetts_home_sales_hit_10_year_low_for_january/
Just read the MAR pdf release. January ‘06 represents the first yoy decrease in sfh prices in 115 months. Funny how that didn’t make it into their talking points. Comparing yoy appreciation rates from last January to this January confirms the sea change in the market - sfh appreciation has gone from +7.4% (1/05) to -0.1% (1/06), condos from 17% (1/05) to +1.9% (1/06). I’ll post a full breakdown of the numbers at http://masshousemarket.blogspot.com/ tonight.
This is sounding an aweful lot like the early 1990s crash. From 1989 to 1990 sales fell by around 50% even as volume exploded. Sellers listed their condos at prices 35% greater than the expected selling price and therefore fewer than 30% of homes sold within 180 days of listing. Forward to 1992 and prices had fallen 40% (see page 39). The smart sellers lowered prices quickly and got out. http://pluto.mscc.huji.ac.il/~msfalkin/0101-paper.pdf
I too just got through the press release, and what jumped out at me was the 14.3 months of supply on the market. That’s a HUGE increase from the already rising figures we’ve seen the past few months. Talk about a disaster.
wait, really? *14 months* of supply?!
that’s insane…isn’t the thing that drove prices up so high that there was just no supply for all the eager buyers out there?!
wow…
think how many homes get listed from super bowl sunday to march 1st
alot !
Where oh where is BeaConst? Do you have too many academic concerns to enlighten us poor fools who are obsessed with real world economics? If not, we want to hear your take on new evidence on the housing market in MASS. Please share!
Now then, let’s not mock the afflicted :twisted:.
Sorry, but this is one point in my life when I feel compelled to just RUB IT IN!!!
Hey, it’s still better than 1995! Doh.
Just a bit more decline, and you’ll have a 18-20 year low.
It’s not unusual to be loved by anyone,
It’s not unusual to have fun with anyone,
But when I see you hanging about with anyone
It’s not unusual to see me cry, I wanna [buy]
–Tom Jones, sort of
Yes, they all went and fooled me,
Now my ARMs resetting cruelly.
I’ll have to leave the green, green grass of home.
Yoooo-hoooo! Homeowner_Ma! Where aaaaarrrreeee you?