November home sales slide to 13-year low
Massachusetts single-family home sales in November slipped to the lowest level for the month since November 1994, according to the Massachusetts Association of Realtors.
A broader sales count already released by the Warren Group, including sales without the help of a real estate agent, showed volume fell to the lowest level for November since 1991.
The 2,986 sales reported by MAR were down 12.6 percent from last November, the third straight month-over-month decline. Part of the reason may be the relative stability of prices, which declined by only 2.9 percent compared to last November, suggesting people are choosing to keep their homes rather than seeking buyers at lower prices.
Such a dynamic often indicates that significant price drops are on the horizon, as owners who want to sell accept the need to reduce prices.
Condominium sales also fell sharply, by 14 percent over last November, but remained relatively strong by historical standards. Median condo prices actually nudged upward by 1.9 percent.
Combined total sales of 4,231 housing units was the lowest for the month since November 1996.
MAR, which represents the state's real estate agents, presented the data with its trademark optimism, encouraging renters -- who do not need overcome the difficulty of selling an existing home before buying a new one -- to take advantage of what it called a "buyer's market."
(By Binyamin Appelbaum, Globe staff)
AS A MORTGAGE PROFESSIONAL FOR OVER 10 YEARS, I BELIEVE PRICES WILL DROP SIGNIFICANTLY BECAUSE THE AMOUNT OF POTENTIAL BUYERS HAS SIGNIFICANTLY DROPPED DUE TO UNDERWRITING CHANGES WITH FANNIE MAE, THE DISAPPEARANCE OF NO INCOME LOANS AND SIGNIFICANT CHANGES TO FICO SCORE REQUIREMENTS
What a shock. The epitome of schill organizations, the MAR (and NAR) proclaim this to be a great time to buy.
Sorry folks. Prices have much further to plunge. When everyone you know is telling you how much the value of their home has dropped and you're an idiot for buying, then you'll know we've reached the bottom
I'm glad this author pointed out (in the last paragraph) how people in the real estate business keep saying its a buyer's market, even though most everyone else is saying things are going to slide for a good while longer.
I bet we see 1990 prices very soon. Houses trying to sell for 480K will be sold at 200K.....
The real drop will come when the recession hits and people lose their jobs. They'll be forced to sell into a falling market (sounds like 1992). Also expect mortgage rates to go up substantially becasuse of the increased risk yield and the weakness of the dollar
The opportunity, of course, is to buy low. This might not happen again for 20 years.
Don't forget that real estate markets are local. Price changes and time on market calculations for the state as a whole (or the nation for that matter) are somewhat meaningless. Prospective buyers and sellers should pay close attention to the town a given home is located in rather than the generalizations being tossed around by the media.
That said, the financial markets are national or even global rather than local. Reduced availability of easy loans will translate to fewer buyers unless more high-paying jobs are created in the region.
I still think it's hard to know where this is all headed. Lots of predictions, but not much past history to base expectations on. One way or aother, it will be interesting!
iI have a contrarian view of the market. The condo data may reflect a decline in inventory with relatively more stable demand for units. The decline in overall sales may be due to drop out of speculators selling to other speculators and the current sales level may be a better marker of true market equilibrium. Unlike many areas of the country, some established Boston communities without excess new construction homes such as Newton and Brookline, may actually see prices start to rise if inventories fall in the face of stable demand. Some of the fall in inventory may reflect speculative purchases that are now in the rental market. The cost of homes in Boston is still a bargain if compared to prices in some other major desireable large cities such as New York and San Francisco. The Boston metro area is a heterogeneous market. Advice to bottom fishing buyers --- If you wait too long, lower inventories may limit your selection of homes, especially in the more desireable areas. Interest rates are low and it is possible that next spring the prices may start to rise again for moderately priced homes in the more desireable Boston area communities, especially if inventory declines.
It's obvious that this is a self fulfilling prophesy. There are NO realistic
scenarios for increasing demand or pricing on the horizon. Price declines
erode existing homeowner liquidity , which creates only more supply as
liquidity evaporates. Only the heady smell of profit and success will turn
this mess around . a population explosion might help with demand ... um,
yeah!
Customers cannot trust the lenders. The customers cannot trust Beacon Hill or Washington to regulate banks and lenders because the banks and lenders are spending so much money on these corrupt politicians. Even Secretary Galvin said last week predatory lenders are spending crazy amounts of money on BEACON HILL.. And we have the fuel. The average customer is spending more $2,000 a year in heating oil and car gasoline. Thats were mortage payments have gone. We need to elect people in the fall who represent us and not Wall Street.. We need a change election, fast.
GB are you a realtor? You sure sound like one. Maybe you bough tin 2005 and are getting nervous
"The cost of homes in Boston is still a bargain if compared to prices in some other major desireable large cities such as New York and San Francisco. "
...and if you compare it to other cities in westernised countries, Boston is an incredible bargain. I moved to Boston recently from London. I purchased a 2 bedroom flat in the South End for 500k. The same flat in London would have cost me 500 thousand pounds....or 1 million dollars. You may eventually see a small invasion of Europeans moving into this fine city as the cost of living here is much more affordable.
"You may eventually see a small invasion of Europeans moving into this fine city as the cost of living here is much more affordable."
Only those who have American significant others...or receive permanent residence through work- or am I missing something?
Just a couple of the comments so far.
"I bet we see 1990 prices very soon. Houses trying to sell for 480K will be sold at 200K"
"The opportunity, of course, is to buy low. This might not happen again for 20 years."
Sounds like some people are going to be living in their parents' basements for a long time.
This blogger might want to review your comment before posting it.
Recent Posts
browse this blog
by categoryINside Boston.com