Monday, February 23, 2009

Collapsedachusetts Existing Home Sales Preview: January 2009

Sources inside the Massachusetts Association of Realtors (MAR) report that tomorrows monthly existing home sales results will show that in January single family home sales declined significantly dropping 12.5% on a year-over-year basis while condo sales absolutely collapsed falling a staggering 26% over the same period firmly indicating that a new and dramatic leg of the housing downturn has commenced.

Further, the single family median home value declined a whopping 17.9% on a year-over-year basis to $263,500 while condo median prices simply fell off a cliff… plunging a stunning 26.1% to $204,000.

Clearly, the impact of the recent stock market crash (that keeps on crashing) and ongoing economic crisis is bearing down on both consumer sentiment and, more fundamentally, credit availability resulting in a significant pullback in spending on homes and other costly purchases.

It’s perfectly clear now that home sellers that choose to wait out the “down market” did so in vain as the 2008 selling season marked likely the last opportunity to sell any residential property at anywhere near the prices set in the peak boom years.

With confidence depressed and eroding and sale volumes this low, Boston area home prices have nowhere left to go but down.

It’s also important to note that the January’s single family home sales count was the lowest January count on record since 1991 and at 1737 units sold was 45.6% below the record January peak set in 1999.

The following charts (click for larger) show the decline in single family home sales since 2005.

Notice that January 2009 registered a home sales count well below the 2008 level as well as indicating that the February’s results may very well drop well below 2000 units, a significant decline.