Massachusetts REALTORS® Report Modest Decline in 2007 Sales, Median Prices
Sales down for fourth straight month in December WALTHAM, Mass. - January 28, 2008 - The Massachusetts Association of REALTORS® (MAR) reported today that despite the troubles in the subprime market and the tightening of credit, 2007 finished as the eighth best year on record for residential home sales. Residential sales were down only 4.4 percent compared to 2006, while median prices were down less than one percent. On a monthly basis, single-family home sales and condo sales were down substantially in December at 20 and 28 percent respectively.
“There is no question that 2007 was a challenging year for the real estate market for many reasons, yet people continued to buy and sell homes on a daily basis, contributing $25.7 billion to the Massachusetts economy,” said MAR President Susan M. Renfrew, broker/co-owner of Renfrew Real Estate in Greenfield. “When you take a step back and look at the year in historical context, it was actually pretty good. In fact, it was the eighth best year on record for sales, and median residential prices remained essentially unchanged.”Year End Sales and Prices
The number of detached single-family homes sold in 2007 declined 4.3 percent from 2006 (from 43,379 to 41,510 homes). The number of condominiums sold in 2007 went down 4.4 percent (from 20,747 to 19,789 units), but despite this drop, it was the third highest year on record since 1990.
The median price for a single-family home declined a modest 1.3 percent from 2006 (from $350,000 to $345,500). This is a 7.9 percent decline from the peak of $375,000 in July-August, 2005, but a gain of 23.8 percent since 2002, when MAR first started reporting median prices. . In 10 years, the average price of a single-family home has increased $239,456 (or 120 percent since 1997).
The condominium market saw median prices increase 2.5 percent from 2006 (from $275,000 to $282,000). Since 2002, the median condominium price has increased $82,000 or 41 percent. In 10 years, the average price of a condominium has increased $213,390 (or 167 percent) since 1997.
Single-family homes stayed on the market 139 days on average in 2007, as compared to 122 days on average in 2006. The average monthly inventory (34,039 homes) was 15 percent lower in 2007 than it was in 2006 (39,833 homes). This translates to 9.8 months of supply on average for 2007 compared to 11 months of supply on average in 2006, and is down significantly from the high of 15 months of supply in February 2006. The market is considered “balanced” when 7.5 to 8.5 months of housing supply exists.
Condominiums stayed on the market 135 days on average in 2007, compared to 116 days on average in 2006. The average monthly inventory (15,876 units) was 20 percent lower than 2006 average level of 19,956 units statewide. This translates to 9.6 months of supply on average for 2007, compared to 11.5 months of supply on average in 2008, and down significantly from the high of 15 months of supply in February 2006.
Multi-family home sales were down 24 percent in 2007 compared to 2006 (from 6,674 homes sold in 2006 to 5,070 homes in 2007). Median sales prices for multi-family homes were down 10.6 percent from 2006 ($360,000 in 2006 to $321,750 in 2007). December Sales and Prices
There were 2,532 single-family homes sold in December 2007, a 20 percent decrease compared to the year before (from 3,166 homes sold in 2006). On a month-to-month basis, there was a 15.2 percent decrease compared to the 2,986 homes sold this past November.
In December, the median selling price for single-family homes was $323,000, a decrease of 3.6 percent compared to $335,000 in December 2006. On a month-to-month basis, the December median selling price went down 2.1 percent from November at $330,000.
The condominium market experienced a large decrease in the number of units sold this December, with a 28.3 percent drop compared to December 2006 (from 1,544 units sold in 2006 to 1,107 units sold in 2007). On a month-to-month basis, condominium sales were down 11.1 percent compared to 1,245 units sold in November.
The median selling price of a condo in December 2007 was $270,000, and was unchanged from December 2006. Compared to this past November, the median selling price of a condominium was down 1.8 percent (from $275,000).
“December is typically not a month in which sales accelerate,” said Renfrew. “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.”
The inventory of single-family homes fell 2 percent from December 2006 levels (from 30,651 listings in 2006 to 30,022 listings in 2007) which translates into 11.9 months of supply in December 2007. This is up from 9.7 months of supply in December 2006 and up from 11.0 months of supply in November 2007.
Inventory continues to drop in the condominium market as well. December inventory went down 16 percent (from 16,581 listings in 2006 to 14,007 listings in 2007), which translates into 12.7 months of supply, up from 10.7 months of supply in December 2006 and up from 12.2 months this past November.
Detached single-family homes stayed on the market an average of 138 days in December 2007 compared to an average of 134 days in December 2006, while condos stayed on the market an average of 144 days, up from an average of 134 days in December 2006.
For 2007 fourth quarter sales data comparisons by state and regions across the state, go to www.marealtor.com.
About the Massachusetts Association of REALTORS®:
Organized in 1924, the Massachusetts Association of REALTORS® is a professional trade organization with more than 23,000 members. The term REALTOR® is registered as the exclusive designation of members of the National Association of REALTORS® who subscribe to a strict code of ethics and enjoy continuing education programs.