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MASSACHUSETTS ASSOCIATION OF REALTORS® HOUSING MARKET 2007 September and Quarter Three - TALKING POINTS KEY POINTS AND OUTLOOK For those buyers who have good credit, now is an excellent time to buy. Interest rates in the jumbo loan market (loans over $417,000) are moving back to more normal levels. Making the loans more affordable, this will benefit buyers in higher cost areas like Massachusetts. (Source: NAR) Currently, buyer confidence is low because of the continued reporting of foreclosures, credit issues, and sales declines. This has resulted in more buyers waiting on the sidelines. Despite the gloomy news, interest rates are still low and for credit-worthy buyers now is a really good time to buy. September is the ninth straight month that year-to-year inventory levels have decreased for both single-family homes and condos. Despite the drop in sales in September, the third quarter was still the fourth most active third quarter since 1990. The Residential market through the first three quarters of the year is keeping pace with the same three quarters of last year, with sales down only 1.1 percent. The continued action by the state and federal government around the credit and foreclosure issues has the potential to get people back into the market. The average interest rate in September was under 7.00% - which is still near historic lows. Real Estate continues to be a good investment in addition to providing shelter. For example, had you bought a single-family home in September of 2002 at the median price of $287,000 and sold it this September at the median price of $340,000, you would have realized a return of $53,000. Instead of investing in real estate, you decided to put that 10 percent down payment ($28,700) in the stock market over the same time (assuming a generous 10% growth each year) the return would have been only $22,144. Had you used the 20 percent down payment, the return would only be $44,288. August Numbers: Single-Family Sales – Down 13.7% (from 3,600 homes in 2006 to 3,108 homes in 2007) Month-to-month Sales - Down 33.9% (from 4,700 in August 2007 to 3,108 in Sept. 2007) Year-to-date Sales (1/1-9/30) – Down 1.2% (33,356 in 2006 to 32,945 in 2007) Prices – Medians down 0.3% (from $341,000 in 2006 to $340,000 in 2007) Month-to-month Prices – Medians down 4.8% (from $357,000 in August to $340,000 in Sept.) Five-Year View – Median price up 18.5% (from $287,000 in 2002 to $340,000 in 2007) Inventory – Down 14% (from 43,227 listings in 2006 to 37,232 listings in 2007) Supply – Supply in both Sept. 2007 and 2006 was at 12 months Market is balanced when there is between 7.5 and 8.5 months of supply. Days on Market – Up to 129 days in Sept. 2007 from 124 days in Sept. 2006, and up from 127days in August 2007. Condos Sales – Down 13% (from 1,590 units in 2006 to 1,384 units in 2007) Month-to-month Sales – Down 38.1% (from 2,235 units in August to 1,384 units in Sept.) Year-to-date Sales - (1/1-9/30) Up 0.7% (from 16,244 in 2006 to 16,128 in 2007) Prices – Medians Up 1.9% (from $270,000 in 2006 to $275,000 in 2007) Month-to-month Prices – Medians down 5.6% (from $291,250 in August to $275,000 in Sept.) Five-Year View – Median Price up 31% (from $209,900 in 2002 to $275,000 in Sept. 2007) Inventory – Down 19% (from 20,729 listings in 2006 to 16,725 listings in 2007) Supply – Down to 12.1 months of supply in Sept. 2007 from 13 months in Sept. 2006 Market is balanced when there is between 8.5 and 7.5 months of supply. Days on Market – Up to 135 days in Sept. 2007 from 119 days in Sept. 2006, and up from 124 days in August 2007. 2nd Quarter Numbers: Single-Family Sales – Down 0.4% (from 12,127 homes in 2006 to 12,171 homes in 2007) - Southeast 14.3% increase (447 homes in 2006 to 511 homes in 2007) - Western Mass. 9.0% decrease (1,846 homes in 2006 to 1,679 homes in 2007) Prices – Medians up 0.9% ($352,000 in 2006 to $355,000 in 2007) - Cape Cod and Islands 4.9% increase ($390,000 in 2006 to $409,000 in 2007) - Central Mass. 2.7% decrease ($290,000 to $282,250 in 2007) Condos Sales – Down 2.4% (from 5,686 units in 2006 to 5,552 units in 2007) - Cape Cod and Islands. 11.8% increase (178 units in 2006 to 199 units in 2007) - Central Mass. 19% decrease (574 units in 2006 to 465 units in 2007) Prices – Medians up 4.7% ($275,000 in 2006 to $288,000 in 2007). - Greater Boston 6.8% increase (from $337,000 in 2006 to $360,000 in 2007) - Central Mass. 4.2% decrease (from $208,750 in 2006 to $200,000 in 2007) Multi-Family Sales – Down 24.3% (from 1,718 homes in 2006 to 1,301 homes in 2007) Prices – Medians down 7.6% (from $353,000 in 2006 to $326,000 in 2007) MORTGAGE RATES/TERMS: § The average mortgage interest rate in Sept. 2007 was 6.89%. This was down from an average of 7.05% in August. REALTOR®VALUE: Choice of REALTOR® continues to be vital in this market. REALTORS® remain well-informed about changes in market, consumer attitudes, interest rates and other critical factors. - Real estate is the most important investment for most consumers…and one where you spend most of your life. Whether a buyer or seller, finding the right professional is your first and best choice to manage the process. - Not all real estate licensees are REALTORS®. REALTORS® must subscribe to a strict Code of Ethics and remain educated about changing market and legal conditions. |
