Local housing market shows vast improvement
The median price for Massachusetts single-family homes sold in January rose 9.6 percent to $285,000 from $260,000 in January 2009, the second consecutive month that median prices for single-family homes increased by about 10 percent on a year-to-year comparison basis, the Warren Group reported today.
On a volume basis, the number of Massachusetts single-family homes rose 11.8 percent to 2,153 from 1,926 in January 2009; that was the fourth consecutive month of double-digit percentage increases, said the Warren Group, a Boston firm that tracks the local housing market and publishes Banker & Tradesman.
"The gains in both sales volume and median prices are a vast improvement to the housing marketís slow start last year," Warren Group chief executive Timothy M. Warren Jr. said in a statement. "The improving economic picture and incentives like the home-buyer tax credit and low mortgage interest rates have aided the housing market. Still, itís important to keep in mind that last monthís median selling price is 12 percent lower than it was in January 2008."
Despite last month's showing, there are some concerns. Recent momentum in the housing market has been propelled by a temporary tax credit for home buyers and mortgage rates near historic lows. That tax credit is scheduled to expire later this year, and mortgage rates are likely to rise, causing the loss of some momentum. Meanwhile, home owners who don't need to move are reluctant to put their properties up for sale, thinking they may be able to get a better price if they wait. That reluctance has led to an inventory shortage, analysts said.
In any event, the Warren Group's January snapshot of the Massachusetts condo market showed that the median condo price increased 16.7 percent to $245,000 in January 2010 from $209,900 in January 2009. The number of condo sales was up 25.3 percent to 1,011 in January from 807 a year earlier.
The Massachusetts Association of Realtors also issued its monthly report on the local housing market. The association uses a different method to track activity than the Warren Group does. In January, the results of the two reports were similar.
In association's report, the median selling price for single-family homes in January was $300,000, an increase of 14.1 percent compared to $263,000 in January 2009. On a month-to-month basis, the January median selling price in Massachusetts was down 1.6 percent from $305,000 in December 2009, the association said.
"Another month of positive sales is a nice way to start off the new year as buyers are continuing to take advantage of the favorable market conditions," Massachusetts Association of Realtors president Kevin Sears said in a statement. "However, to get back to a more normal market we still need to see more homes for sale than we currently have. If not, prices will continue to go up to the point where it will impact sales and drive the market back down."
A third housing report that includes data for the Boston area is scheduled to be released later this morning.