Crashachusetts Existing Home Sales and Prices: February 2009

Today, the Massachusetts Association of Realtors (MAR) released their Existing Home Sales Report for February showing that single family home sales declined significantly dropping 11.42% on a year-over-year basis while condo sales dropped 16.4% over the same period firmly indicating that the new leg down for the housing market is continuing.

Further, the single family median home value declined a whopping 18.5% on a year-over-year basis to $252,500 while condo median prices dropped 15.4% to $213,250.

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.

Of course, the new Massachusetts Association of Realtor president Gary Rogers strikes a more hopeful tone while embracing government handouts for his industry:

“We continue to be hopeful that sales will increase in the coming months as buyers take advantage of the combination of low prices, low interest rates and the $8,000 federal first-time homebuyer tax credit that expires on December 1, 2009,”

It’s important to keep the following points in mind when considering the impact of the homebuyer tax credit legislation:

• The credit is for “first time” home buyers only… if you have had ownership interest in any home (including condos) anytime in the last three years you are NOT eligible.
• The credit has income restrictions of $75,000 for individuals and $150,000 for married couples filing jointly.
• The credit can only be used for principle residence.
• The credit cannot be applied to the downpayment.

So this is really a very limited program which will very likely NOT result in any noticeable increase in demand in our area.

MAR reports that in February, single family home sales declined 11.42% as compared to February 2008 with a 16% decline in inventory translating to 15.4 months of supply and a median selling price decline of 18.5% while condo sales dropped 16.4% with an 24% decline in inventory translating to 16.0 months of supply and a median selling price decline of 15.4%.



As in months past, be on the lookout for the inflation adjusted charts produced by BostonBubble.com for an even more accurate "real" view of the current home price movement.

February’s key MAR statistics:

• Single family sales declined 11.42% as compared to February 2008
• Single family median selling price decreased 18.5% as compared to February 2008
• Condo sales declined 16.4% as compared to February 2008
• Condo median price declined 15.4% as compared to February 2008
• The number of months supply of single family homes stands at 15.4 months.
• The number of months supply of condos stands at 16.0 months.
• The average “days on market” for single family homes stands at 153 days.
• The average “days on market” for condos stands at 187 days.

Collapsedachusetts Existing Home Sales Preview: February 2008

Sources inside the Massachusetts Association of Realtors (MAR) report that next week’s monthly existing home sales results will show that February single family home sales crashed 22.9% on a year-over-year basis while condo sales collapsed 34.6% over the same period.

Further, the single family median home value declined 4.6% on a year-over-year basis to $310,000 while condo median prices decreased 6.7% to $252,000.

It’s also important to note that February’s single family home sales count was the lowest February count on record since 1996 and at 1857 units sold was 26.91% below the record peak set in February 1999 and 22.9% below the more recent peak of February 2007.

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

Notice that February 2008 is registering a home sales count well below even the 2007 level as well as indicating that the March’s results will likely be well below 3000 units, a significant decline.


After over two years of declining home sales, weakening home prices and now looming recession it appears that Massachusetts may have just entered the price “free-fall” phase of the housing decline where home prices continuously drop even through the spring months which are typically strong in the region.

Stay tuned as next week's S&P/Case-Shiller home price index results will be available for Boston likely showing the most significant decline in the last 12 months.

Crashachusetts Existing Home Sales: December 2007

This week, the Massachusetts Association of Realtors (MAR) released their Existing Home Sales Report for December 2007 showing again the utter foolishness of former MAR president Doug Azarian’s yearlong optimistic sentiment.

But, seeing as this is January, the month reserved for the annual “changing of the guards” in the Realtor power structure, let’s offer the incoming MAR president Susan M. Renfrew our warmest congratulations and even go so far as observing a short moment of silence in recognition of another orderly and peaceful transfer truly brazen and unabashed debauchery.

… now that that’s over…

MAR reports that in December, single family home sales plummeted 20% as compared to December 2006 translating to a whopping 11.9 months of supply and a median price decline of 3.6%.

Hitting the ground running, Renfrew downplays the decline while suggesting that “stable” prices and great inventory may offer some hope for a better 2008.

“December is typically not a month in which sales accelerate… Hopefully, the folks who are on the fence about owning a home will take advantage of this buyer’s market – great inventory, stable prices, last week’s Fed rate cut, and the potential increase of conforming loan limits – to get sales moving in the first quarter.”

Unfortunately for the Fed-glee filled MAR though, many buyers are now nearly “permanently” sidelined as a combination of tougher lending standards (even for FHA and GSE loans), the continued absence of Jumbo loans and outright fear of buying a quickly depreciating asset during an obvious recession all work to provide a powerful deterrent to home sales.

Nice touch on the “stable” prices though but I think that at this point it’s fairly obvious which direction prices are going from here.

Furthermore, 2007 showed the least sales of single family homes since 1996 leaving 2008 poised to set the pace back to that seen during the last major housing collapse.

As usual, The Warren Group’s latest figures were significantly different than that of MARs showing sales of single family homes down 23.3% and a median price decline of 10.5% as compared to December of 2006.

With December’s results we have completed our crossing over to the new reality of virtually non-existent (or ridiculously costly and inaccessible… take your pick) Jumbo loans and are now just entering a new phase of recessionary period sales declines.

The housing debacle is now common knowledge (we’ve sure come a long way) as is the looming (or actually existing) recession and related “bear” market conditions on Wall Street.

All of these circumstances will work together to create a sense of urgency not to overspend, get overleveraged or take unnecessary risks in the face of unprecedented uncertainty about the future prospects for the economy.

To better illustrate the drop-off in home prices and the potential length and depth of the current housing decline, I have compared BOTH the year-over-year and peak percentage changes to the S&P/Case-Shiller home price index for Boston (BOXR) from the 80s-90s housing bust to today’s bust (ultra-hat tip to the great Massachusetts Housing Blog for the concept).


The “year-over-year” chart compares the percentage change, on a year-over-year basis, to the BOXR from the last positive value through the decline to the first positive value at the end of the decline.

In this way, this chart captures only the months that showed monthly “annual declines” and as we can see, if history is to be a guide, we could be about one third of the way through the annual price declines with the majority of falling prices yet to come.

The “peak” chart compares the percentage change, comparing monthly BOXR values to the peak value seen just prior to the first declining month all the way through the downturn and the full recovery of home prices.

In this way, this chart captures ALL months of the downturn from the peak to trough to peak again.

As you can see the last downturn lasted 105 months (almost 9 years) peak to peak including 34 months of annual price declines during the heart of the downturn.

Notice that peak declines have been more significant to date and, keeping in mind that our current run-up was many times more magnificent than the 80s-90s run-up, it is not inconceivable that current decline will run deeper and last longer.

As in months past, be on the lookout for the inflation adjusted charts produced by BostonBubble.com for an even more accurate "real" view of the current market trend.

December’s Key Statistics:

• Single family sales declined 20% as compared to December 2006
• Single family median price decreased 3.6% as compared to December 2006
• Condo sales declined 28.3% as compared to December 2006
• Condo median price went unchanged as compared to December 2006
• The number of months supply of single family homes stands at 11.9 months.
• The number of months supply of condos stands at 12.7 months.
• The average “days on market” for single family homes stands at 138 days.
• The average “days on market” for condos stands at 144 days.

Crashachusetts Existing Home Sales: August 2007

Yesterday, the Massachusetts Association of Realtors (MAR) released their Existing Home Sales Report for August 2007 again purporting to show “positive” signs of sales and even price strength with single family home sales increasing 6.6% and the median price increasing 1.4% as compared to August 2006.

Along with MARs release, President Doug Azarian continued the typical spin suggesting that the Federal Reserve’s rate cuts and government intervention into the nation’s housing markets will immediately translate to positive growth.

“It is definitely a positive sign to see two consecutive months of year-over-year sales gains to end the summer … Combined with the recent interest rate drop by the Fed and continued legislative action on Capitol Hill, the potential for continued sales growth through the fall is good.”

As usual, The Warren Group’s latest figures were significantly different than that of MARs showing sales down 1.5% and a median price decline of 4.9% as compared to August of 2006.

In a related development, the latest release of the S&P/Case-Shiller index for Boston continued to indicate price appreciation now capping 5 consecutive months of price increases for the index.

So what’s going on here?

I think it’s safe to say that we are at a literal crossroads in terms of information and perception.

First, as you may already know, I believe the MAR numbers are truly untrustworthy.

There have been numerous flaws in past reports with unexplained and conflicting revisions as well as simply the inconsistency that has been shown when comparing MARs results with both the Warren Group and the Case-Shiller data.

That said, I do believe that this selling season showed some positive trends with inventory falling significantly and sales, while slowing, generally keeping pace, or at least not collapsing, as compared to last year.

Additionally, although the S&P/Case-Shiller index for Boston has historically showed a strong degree of seasonality with prices generally increasing as sales volume increases between February and July and then slowing toward the end of the year, this year’s seasonal upward price movement has looked much like any other year also without any collapse.

Lastly, while the Warren Group’s numbers are clearly more accurate than MARs and have generally showed greater sales declines as well as median price declines in-line with the S&P/Case-Shiller, they have not indicated any truly cataclysmic collapse.

By collapse what I’m suggesting is something on the order of the “bottoms away” declines seen during the last housing recession where prices literally dropped off a cliff and fell consistently for roughly two straight years.

Now keep in mind, the most significant structural change for our areas housing market, namely the disappearance of the Jumbo and No-Doc loan, JUST OCCURRED in August and none of the data that we have seen to date accurately reflects the impact of that change.

We are now clearly at a crossroads with the shape and movement of this downturn diverging from what we have experienced in the past and now firmly on its own course.

In fact, you can clearly see the divergence in both of the “then and now” charts I have published in prior posts (see below).

So what’s next for Boston housing?

I think it would be very unlikely that the developments in the mortgage market would have no impact on sales and prices in our area.

I am firmly convinced that prices will reflect the extraordinary changes that have taken place and the adjustment will not be short lived.

Whether this price adjustment occurs slowly over time, buoyed by a relatively strong economy and job market or whether we head for recession and real housing distress is yet to be determined but my money is on significant adjustment one way or the other.

To better illustrate the drop-off in home prices and the potential length and depth of the current housing decline, I have compared BOTH the year-over-year and peak percentage changes to the S&P/Case-Shiller home price index for Boston (BOXR) from the 80s-90s housing bust to today’s bust (ultra-hat tip to the great Massachusetts Housing Blog for the concept).


The “year-over-year” chart compares the percentage change, on a year-over-year basis, to the BOXR from the last positive value through the decline to the first positive value at the end of the decline.

In this way, this chart captures only the months that showed monthly “annual declines” and as we can see, if history is to be a guide, we could be about one third of the way through the annual price declines with the majority of falling prices yet to come.

The “peak” chart compares the percentage change, comparing monthly BOXR values to the peak value seen just prior to the first declining month all the way through the downturn and the full recovery of home prices.

In this way, this chart captures ALL months of the downturn from the peak to trough to peak again.

As you can see the last downturn lasted 105 months (almost 9 years) peak to peak including 34 months of annual price declines during the heart of the downturn.

Notice that peak declines have been more significant to date and, keeping in mind that our current run-up was many times more magnificent than the 80s-90s run-up, it is not inconceivable that current decline will run deeper and last longer.

As in months past, be on the lookout for the inflation adjusted charts produced by BostonBubble.com for an even more accurate "real" view of the current market trend.

Augusts’ Key Statistics:

• Single family sales increased 6.6% as compared to August 2006
• Single family median price increased 1.4% as compared to August 2006
• Condo sales increased 3.4% as compared to August 2006
• Condo median price increased 4.8% as compared to August 2006
• The number of months supply of single family homes stands at 8.2 months.
• The number of months supply of condos stands at 7.4 months.
• The average “days on market” for single family homes stands at 127 days.
• The average “days on market” for condos stands at 124 days.

Massachusetts Home Sales Rebound?

The headlines said it all… “Bay State Home Sales Rebound in January”, “State’s Home Sales Rebound”, “Mass Housing Market Bouncing Back”.

Or, maybe MAR President Doug Azarian summed it up with the following guarded optimism:

“We are encouraged about the way January has started off… As sellers continue to price their homes correctly, we should begin to see demand pick up, inventories go down, and the market becoming more balanced.

Obviously, looking at the numbers there is a significant increase to single family home sales this January versus the results of January 2006.

Of course we could debate about the MARs numbers and The Warren Groups numbers but for sake of simplicity let’s just consider the MAR numbers.

First, keep in mind, Boston as well as the whole of the Northeast has experienced exceptionally mild weather in January allowing for many more days of buying activity than would have otherwise occurred.

But even given the mild weather, the 2744 units sold are still under the January 2002 and 2003 results as well as 7.5% below the 2005 results.

Additionally, prices have been falling fairly regularly since June 2005 and again dropped 2.1% in January.

So, we are continuing to see a decline, both sales and prices are significantly below the peak values and soon the spring inventory will rejuvenate competition putting further pressure on prices.

As in months past, be on the lookout for the inflation adjusted charts produced by BostonBubble.com for an even more accurate "real" view of the current market trend.

Unfortunately, MAR seems to have trimmed their reporting of inventory and days on the market so, for now, we will have to live with the following key statistics for January 2006:

• Single Family Sales increased 12.6% as compared to January 2006
• Single Family Median Price declined 2.4% as compared to January 2006
• Condo Sales increased 5.3% as compared to January 2006
• Condo Median Price declined 0.7% as compared to January 2006

housing+bubble realtor massachusetts MAR NAR association+of+realtors Doug+Azarian economy housing recession home+sales median+price real+estate decline

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