This recurring monthly post tracks the latest results of the housing market seen in Arlington Massachusetts.I choose Arlington as a result of the Boston Globe’s relatively recently published and absurdly anecdotal and ludicrous farce about the town’s “hot” housing market.
The ridiculous tone and outright mishandling of the housing data by the Boston Globe “reporter” would almost be comical if it weren’t for the fact that the Globe’s editor, Martin Baron, ALSO blundered seriously when he responded to my email about the discrepancies.
Baron attempted to justify the articles contents and in so doing, he disclosed his disgracefully poor and obviously unsophisticated abilities with even the most basic economic data.
The December results again confirm that Arlington is by no means a “stand out” amongst its neighboring towns as Baron suggested in his email and, in fact, is following along on a path wholly consistent with the trend seen in the county, state, region and nation.
Why would an editor of a nationally recognized newspaper think that a single town would continue to function as an isolated bubble amongst a backdrop of the most significant nationwide housing recession since the Great Depression?
As I have shown in my prior posts, this data when charted and compared to other towns in the region proves there are absolutely no grounds to call Arlington’s market exceptional.
The most notable feature of the recent results is unquestionably the low number of home sales with only 248 sales for the entire year, a 20.51% decline as compared to 2007 and the lowest readings since the recessionary period of 1990.
Another important point to remember is that when sales decline dramatically the median selling price can jump wildly up or down since the small number of sales provides a small set with which to determine the “middle” selling price.
The following chart (click for much larger version) shows a history of Arlington’s December median sales price since 1988 along with the annual outcome.
Regular readers will notice that the “year-to-date” median selling price, a more accurate median indicator, has declined significantly from where it stood earlier in the year as the number of home sales have slowly accumulated and now stands at $475,000.
Although my expectation was for the median to drop “well below $470,000” by the end of the year, the full year outcome of $475,000 was essentially flat compared to 2007 and remains well within the bubble reversion to the mean thesis.
All towns, except for Cambridge which had an exceptionally low number of single family home sales in 2008, registered flat to declining median selling prices which, as this post makes so clear, further indicates that Arlington is no “stand out” amongst its peers.
The next chart (click for much larger version) shows that annual home sales in Arlington have fluctuated in a range between 233 and 381 over the last 21 years with the peak selling year being 1998.This is not such a surprising result for those that have observed Arlington’s real estate market over the last two decades.
Arlington experienced tremendous growth during the 90s internet boom as young families sought its desirable location and outstanding (presumed…) school system.
Now though, it looks as if Arlington is, more or less, a perfect representation of a town struggling with our secular bear market economy.
Its housing market has essentially been eroding since the peak of the internet economy and not even the unusual conditions of the housing bubble could bring back the outstanding growth experienced during that era.
In recent years, Arlington has found itself falling behind with state cutbacks and lower property tax revenues leading to public funding stress and particularly the postponement of the much needed renovation of two dilapidated schools.
It’s important to note that the dilapidated schools happen to reside in the school districts generally considered to be the lower income areas of the town.
In fact, the higher income sections of the town, particularly the Brackett school district, were fortunate enough to get their schools completely redeveloped in “world class” style before the funding dried up.
As you can imagine, the quality of the school buildings in the lower income areas are not the only elements of those districts to have suffered with students producing notably lower MCAS scores and one school even receiving a designation of a “year 1 improvement plan” by the state department of education.
This type of blatant favoritism breeds discontent and, internally, the town’s residents have struggled with the issue of fairness.
This week an armed gunman even reined terror down on the residents of his Arlington neighborhood as he walked down his street brandishing his weapon in menacing style, threatening neighbors and even local police before being apprehended.
With the economy headed into likely the worst recessionary years of the post-WWII period, it will be interesting to watch how this firmly middle class suburban town copes.
The final chart shows how the year-to-date median sales price and combined sale count for Arlington, Bedford, Belmont, Cambridge and Lexington have changed since 1988.Notice again that as sales have mounted for the year, the median values are looking generally flat to trending down.
In review, the data shows that there is nothing exceptional about Arlington’s housing market proving clearly that the claims made in the Boston Globe article and later endorsed by its editor Martin Baron were entirely erroneous.
