Overall Home Sales Drop ‘Steeper’ In Massachusetts
The Boston Globe reports on a new overall sales report. “The drop-off in Massachusetts home sales last year just got worse. The Warren Group reported yesterday that sales of single-family homes declined 7.6 percent last year. That is much larger than the 3.5 percent drop in 2005 sales reported recently by the Massachusetts Association of Realtors in its year-end report.”
“”’I would say our numbers are probably more complete because they come from the public record data and not from realtors,’ Tim Warren, chief executive of the family-owned Warren Group said. Warren Group’s data are collected from registries of deeds in each Massachusetts county.”
“John Dulczewski, spokesman for the MAR, confirmed that his organization’s data are culled strictly from real estate agents’ listings in five MLSs’ operating across Massachusetts. The association’s data do not include private transactions, such as a parent’s sale to offspring, or sales by owners, or builders directly to buyers.”
“Owners are typically more successful in selling their own properties in strong housing markets than they are in softening markets, that worse track record may be reflected in Warren’s steeper drop. ‘If the number of sales involving realtors didn’t decline as much,’ he said, ‘then realtors are doing a better job of maintaining their business than builders and for-sale-by-owners are.’”
Ben:
I’m shocked that the MAR’s data would be unreliable. Of course, there is all the private transactions - a parent’s sale to offspring, etc. - they don’t count.
A parent’s sale to offspring?! I can see FSBO or builders’ direct sales having some effect, but to throw in the parent’s sale to offspring nonsense as the first in the list is really grasping.
This is but one example of how the realtors will continue to skew the numbers to try to reassure the public that there is a mere leveling off, when the reality is much worse. Thank goodness for this Warren Group report to show the disparity of the numbers.
The San Fernando Valley stats are out for Jan. Sales were off over 30% year over year. This is a huge huge drop. They will probably manage to bury this press release even deeper than the one from last month when it was “only” off 23%.
I am sure there are enormous sales volume drop offs like this happening in hot spots all over the country. I am surprised that the press hasn’t jumped on this a little more (despite the fact that they don’t want to upset their advertisers).
deb,
Do you have a link?
The the sales numbers will be even worse this year in the bubble markets. Prices need to fall.
David
Bubble Meter blog
Am I just imagining this, or does it seem to others like the terms “steeper” and “accelerate” are showing up with accelerating frequency in reports on the housing situation? Not to mention in the resemblance of these terms to the appearance of TOL’s stock chart?
“The Warren Group, as a result, reported a larger number of statewide home sales in 2005 — 63,350, compared with the association’s 49,306 sales.”
This to me is a stunning difference. I wonder if a 28% difference between realtor-reported and county-registered sales is typical across the country. Would need a reconciliation of these two numbers in order to have a complete picture of the Massachusetts market.
I am not going to bash Ma, but I have been comparing this state with others, and it is extremely expensive. What I cannot figure out is why. There have been no new exiting companies created in the last 6-7 years since the doc com bust, there are no new jobs that are not RE or Mortgage related, the jobs that are here, require PhD knowledge with a minimum wage salary, and taxes, ohh those lovely taxes. Income tax, Sales Tax, Corporate Tax, Property Tax, etc, ad nauseum.
Now here is the really sad part. Where I live, there has been very little change in inventory, therefore prices are not going down. Sad, depressing, and is making me seriously consider finding a job somewhere else, and moving away. OTOH there are no sales either….
Ben,
Check your email for “San Fernando Valley stats”.
In just a short walk through my neighborhood yesterday I noticed there are plenty of homes for sale. There is a home right across the road from me that just went up last weekend(ugly and crappy location)I wonder how long this will be up? 6 months or longer is not uncommon here.I live in Mass. north of Boston in Essex county.
Did this article mention the rising inventory? Hmmm…….
…and the prices continue to rise. simply amazing. it will be interesting to see what happens w/ prices in ‘06.
MA
Essex County
nice how MAR tries to spin the numbers as if realtors are doing a good job. if realtors were really doing a good job, sales wouldn’t be falling off at all because realtors would convince sellers to price their homes accurately.
Mass has a lot of problems, but at least it has a lot of young and growing businesses. I was reading a report the other day that showed that Mass has the highest percentage of venture capital backed businesses in the country.
a lot of bubble states (e.g., Arizona, FL) don’t have anything remotely close to a burgeoning high wage industry. of course, Mass runs the risk of driving a lot of business away by its high taxes and cost of living, but it still seems to be in a better position than a lot of places
Skeptic,
I would hope a realtor could outsell a FSBO in a slower market. The important implication is that the for-sale inventory is actually much higher than MAR is reporting.
Skeptic: I live in SE mass, and have looked for a job for the last 3 years with little or no luck. I believe that I have good knowledge, a wide skill set, but I have been unable to find a decent job. Currently I am working with my family, and my stepbrother who is also looking, concurs with me that there are few jobs, and very few good paying ones around here.
Those VC backed companies are mostly based in India and in China. Most of them are service oriented towards the high tech industry. Call centers, programming, network management, etc. All those jobs that used to provide a decent wage base for Ma, Ca, and some other states, have moved over seas.
On another note, 2 of the biggest companies in Boston got bought last year. Gillette, and John Hancock. Gillette is already laying people off.
Ben Jones Says:
Skeptic,
I would hope a realtor could outsell a FSBO in a slower market.
You would think that, except for the fact that when a buyer sells, they don’t face the realtor’s incentive of maxing sale price to max commission. Of course, even realtors figure at some point that a commission on a house that isn’t sold is zero.
skeptic,
I read that same article. MA is #2 behind Silicon Valley in terms of VC money available. If you want to pitch a company, you can quite literally take a drive up Bear Hill in Waltham and hit about a dozen VC firms - and that’s just the starting point. It’s a combo of the Boston colleges & universities, the 128 - 495 tech corridor, and the start-up financing available that make MA attractive.
Unfortunately the increase in housing costs and the stagnant wage growth continues to drive away manufacturing and even more established high-tech companies that choose not to pay big salaries. Our company hired like crazy in MA throughout ‘05, but we also just announced a new facility in Alabama. I know of several firms opening up in Raleigh-Durham, NC. NC seems be attracting some tech.
not a surprise that realtors are lying/incomptetant. I pretty much assume this anyway, but it’s nice to have confirmation.
I wonder when they’ll realize that the only way they’re gonna sell houses is by getting sellers to wake up and realize a crash is underway. They longer they keep trying to manipulate the numbers and spin, spin, spin, the more unrealistic sellers get. from a realtor’s perspective, a discount sale is better than no sale
Deb,
Are you seeing a sales pickup in the SFV? Here, in north SD, houses are suddenly selling again (like last year). Homes that have been on the market since summer/fall have all sold in the past couple of weeks (Carlsbad area).
In SD, summer/fall of 2004 was the “peak”, IMO. Some communities rose, some fell, but it’s basically been flat since then. We would have been negative, YOY, if not for the “spring bounce” in 2005. It was very shallow, but brought hope back to the bulls which lasted the entire year.
I figured we’d see increased sales this spring. Let’s just hope it doesn’t continue for long. Let’s be done with this stupid bubble already!
Yes, sales have picked up, but they are still well short of this time last year. The holidays were very, very slow (even slower than normal seasonality would suggest), so there is a pick up now. I knew there would be as well. Prices seem to be about the same since the summer. Inventory is continuing its increase. We are just about back to peak inventory levels hit just before Thanksgiving last year- far above the levels for any January since at least 2000 and probably longer.
The real test will come with the March-Sept sales data when we have typically seen HUGE price increases. If the March data continues to show flat sales prices and lower sales volume, I will feel more confident that the top is in.
I live in southern N.H. on the tax-free edge of the Boston market. From what I’ve seen, the market fell off a cliff in August. Six houses on my street are for sale and the only one that “moved” was a repossession. One house, a very pretty 75 year old on a busy street, has been for sale since July. It was listed at a bubbly $375K, adjusted to a realistic $275K and as of October was at $220K. It continues to sit.
Another factor in the Boston market is the massive loss of population for more livable places.
John,
What town in NH? I have two friends who buy/sell and refurb houses mostly in Salem, NH and vicinity and they told me business is still good. In their words, “Yeah it takes two weeks to sell a house now instead of one like last year.” Of course they do a good job, they are savvy, and being that they have been in the business full-time for over 10 yrs, they prob know how to feel out the market and price accordingly. That being said, they will also be the first to say that ‘flipping’ properties is not all glamour and not nearly as easy as people think. Then again, they are in FL on their annual 1 mo vacation right now, lol.