Wednesday, February 28, 2007

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 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