March sales data by town

I'm afraid you've ground your favorite ax right down to the nub.

You're now backing up your increasingly ridiculous assertion of "immune" towns with 7 single family home sales in Winchester. Seven. Sales haven't been that low in Winchester for 7 years.

Total sales in Arlington have dropped by nearly half.

But, sure. Inner suburbs are immune. A good mantra for homeowners as they hug and rock themselves.

I just noticed: Winchester SFH prices cratered by $300K from 06 to 07. Did the miraculous immunity take hold only after that?

Well said, Marcus. Also, note that many of the inner suburbs did see price declines (e.g., Cambridge, Somerville, Brookline). Oh look - "immune" Newton saw declines too. Better hug and rock harder.

Oh, my. No awards for careful reading this afternoon.

1. The map is based on data year-to-date. For Winchester, that's 32 sales so far this year. Seven is the total for March.

2. The median price in Winchester in 2006 was $700,000. In 2007, it was $664,375. So far in 2008, it's $830,000.

3. Prices in Newton have declined by 1.7 percent year-over-year. Prices in Brookline are up 13 percent. It's not included on the map because there haven't been 30 single-family sales so far this year.

Cambridge and Somerville also don't meet the minimum.

Inventory this past winter was LOW in a many towns especially in the metrowest. The Boston area endured snow storm after snow storm so people held off on listing.

The low inventory is WHY there was a significant drop in sales -

Fewer homes to sell = fewer sales. As a result fewer sales registered the first three months of 2008 then in '07. Yes, in part, blame the snow.

This article's three month "snapshot views" of year over year are not good indicators and very misleading; really worthless if not taken in context of the bigger picture.

Condos don't seem to follow your rule of thumb, perhaps because there just ain't that many in the outer-ring suburbs. Still, if demand for the urban core was holding constant, you might expect to see condo prices holding up fairly well. But in urban core towns with a significant number of sales, prices are down in Cambridge (-16%), Quincy (-9%), Somerville (-6%), Waltham (-14%), Watertown (-9%) and Arlington (-6%). They've held constant in Boston, and they're up in Brookline (7%) and Newton (8%). At best, that's a fairly random distribution. But given that condos in the state as a whole slid just -1.8% in the period, it seems like something more.

Going to many open houses this weekend we saw many young couples looking at houses in Newton worth 800K to 1 mil. My husband and I were cracking up at the look on their faces as they actually believed they could afford these houses! We are in our early 40's, have moved a lot with 3 kids, and have been renting and saving like crazy! We are not yet ready to buy. My point is, when the newbies can't close the deal at these crazy prices, we will be ready to move in. Houses may be under agreement, but until they are SOLD, declines will continue.

Marcus -What's your take on the Newton Market this fall?

Oh my. No awards for cherry picking data.

You have repeatedly focused on single-month data to claim that the pace of declines is slowing.

But March just went off a cliff. SFH prices in Newton have collapsed, cliff diving from 868K to 544K. So now you reach back to earlier months where the YOY decline was lower.

It's very hard to carry off a shell game for very long.

Bear baiting has gone out of fashion, so I'll make one more point and let the discussion tend to itself:

The median single-family price in Newton actually declined from $760,950 in the first three months of 2007 to $748,000 in the first three months of 2008. That's a decline of 1.7 percent.

Anyone interested in seeing the data for themselves, for any town in Massachusetts, should follow the links in the post.

Median SFH home prices in Newton crashed 37% in March--the start of the spring selling season--from a year ago. A devastating but hardly untimely death blow to the immune-suburb crowd.

I'm sure you'll be happy to comb back over your previous posts and show us that you have always preferred to report data in three-month increments. Unless you just discovered this technique when the pace of decline accelerated?

Indeed. And be sure to come back next month, when we discover four-month increments.

Marcus, get a clue, what industry doesn't report quarterly year over year comparisons? That is exactly what this is. Doing montly year over year comparisons does not give enough data to be mathematically relevant. Not to mention it's Warren Groups study, so not so sure why you are getting so heated towards Binyamin?!?!

now that's what I'm talking about...great debate guys... what I would like to see is a comparison of the MCAS (i think that what you MA guys call it) test results (say third grade) vs. to the price changes for each town. Also if we have any stats guys, please include towns with low tax rates vs high tax rates. Say Northborough vs Southborough since they have the same High School.

Thanks Ben for the posting, your doing a great job. As for my bottom call in past comments, your guess is as good as mine. But you have to like what you see in the stock market for the last month which will start make people with 401k start to feel somewhat better.

Kindly don't tell me to "get a clue."

The data comes from the Warren Group. The use of it to argue that some towns are immune comes from Binyamin. Who has previously set great store by the importance of single-month data.

Seems like the sudden paramount importance of Warren Group data is catching on.

Actually, my count of single family homes sold in Winchester, on the MLS alone, so far in 2008, is 39.

There are probably more out there that were FSBO and not on the MLS.

Here are the questions and data-points that we need to get to in order to determine what is real:

- What is the avg sq foot? And the comparable avg price per sq foot?
- Can we derive a weighted average sq price for a house in move-in condition- i.e., a house that needs a lot of work adjusted by $ 25 sq foot to account for rehab (we saw a house this weekend that was priced $ 100k less than the market, but requires $ 200k+ in work, and still would not be comparable due to disadvantaged driveway parking
- What is the median sq footage between the time periods?
- What are the mean, median price and std deviation for both 2007 and 2008
- What are the # of listings for both time periods, equating to # of months of inventory
- How many of the homes sold were occupied vs empty
- How many of the houses for sale are empty vs 2007
- How many of those for sale are more than 1 mtg payment behind?
- How many are tapping credit cards and 401ks to cover living expenses, Q1 2007 toQ2 2008
- What is the breakdown of home sales by region-if you look at Newton, there is a big difference in prices from one community to another (partially, but not fully reflected in property taxes
- Is the average monthly payment of the 2008 buyers higher than the Q1 2007 buyers?

If someone wants to start compiling sufficient data, I will take on the task of a real statistical analysis.

I hope folks aren't confused. The nicer neighborhoods got slaughtered in the Warren numbers.

Newton--Median prices plunged from 747K to 525K, while sales collapsed from 76 to 45.

Cambridge--Sales collapsed from 123 to 76, while median prices crashed from 510K to 401K.

Lexington--Sales fell from 38 to 23 while the median dropped from 647K to 595K.

Somerville--The median dropped from 376K to 347K, sales collapsed 67 to 38.

Concord--The median SFH price "suicided," as W would say, from over a million to 600K, while the total median fell from 762K to 600K; the total sales number did go up, skyrocketing by 2.

Weston--Median price for all sales fell from 987K to 855K

We can certainly see why the bulls would resort to personal attacks.

This is a rollicking-good debate!

My question is: When are sellers going to "get-it?" It seems they're stubbornly staring through vaseline-coated glasses, clinging to glimmers of yesteryear.

Can someone get a bullhorn and yell "It's not 2004!!! ?

Marcus? Binyamin?

James P,

"Inventory this past winter was LOW in a many towns especially in the metrowest. The Boston area endured snow storm after snow storm so people held off on listing."

We had very little snowfall after December, plenty of opportunity to clear the walk for an open house, nice try though...

Snowfall totals in inches:

Dec 27.7

Jan 8.3

Feb 15.0

March 1.0

nice try G-man. But I'm not selling until I get full market value for my pad. yes, I could take a bit out of someone, I'm just not selling, no way. no how. Full price or no deal. 29.7 years until she paid off. TA is here to stay.

LynnLs, I laud you for making decisions that have seemed to work well for you, your husband, and your family, but I was deeply offended that you would actually admit to condescendingly laughing at "young buyers" who "actually believed" they could afford homes in the $800k to $1M range.

Being able to afford a home has little to nothing to do with age. 30-year-old buyers purchase homes valued all over the map, from under $200k to $2M or more, all dependent upon their own personal financial situations. As a woman in your early 40's, I would think you wouldn't be so naive to overlook this fact.

It's also not appropriate of you to assume that young buyers as a category of purchasers are being flip about their finances, spending egregiously on homes they cannot afford. Last I read, this mortgage crisis has far more to do with high-risk buyers as a purchasing group than it has to do with "young buyers" as a purchasing group.

And Binyamin, excellent blog. I enjoy checking in more than daily and hope you'll keep up the great work.

All I can say is.... figures that we'd sell out and get out of the MA market in 2005 (with a nice profit and our shirts on,, only to hate the south, long to return, and bingo! the housing market slide takes hold pretty much everywhere except in the town we wanted to come back to: Arlington!

oh well, we still got a nice deal on an historic place in an historic district buying in the winter, and we're coming back. thank god the market in our sunny clime held so we could sell for profit down south, too!

buyers who have good credit, can get bridge loans in the range of 600-900K are still in a better position in MA than they were 5-8 years ago. And, sellers who have to sell for job transfers or other necessary moves are making deals. no doubt about it. glad to be back up north, and we'll stay put for the long haul now, knowing that values will only hold and increase nicely again.

I bet a medical doctor would find this debate familiar.

"Yeah, doc, but those odds don't apply to someone in my shape, it doesn't run in my family, you gotta admit I have a better shot because I'm younger/ healthier/skinner/never drank/had wine with every meal."

I think we've moved from "denial" to "bargaining."

Actually, my count of single family homes sold in Winchester, on the MLS alone, so far in 2008, is 39.

Sally, this is not a matter for your count. The Warren Group data comes from the Registry of Deeds and is definitive. Total sales for 2008, including condos and single family homes totals 49. Down from 88 last year--a precipitous 44% plunge.

In March--start of the spring selling season, there were a total of 15 sales, down 57% from 35 sales last year.

Only 7 SFHs sold in March. Seven.

There isn't any doubt that prices have come down across the state.

Typically, the communities that have had smaller price declines over the past couple of years have seen a significant drop in sales. Those communities that have seen prices fall much faster have actually seen sales increases or smaller declines in sales recently. Some communities saw their price declines in 2006, others in 2007 and some in both years.

The situation is different from city to city and neighborhood to neighborhood. There are just so many factors that determine what someone is willing to pay for a house, and there are just as many factors that determine what someone will sell their home for.

Keep up the good work Binyamin.

Good debate. I think Marcus has a point. We usually compare monthly YOY sales and price. Why don't we have or show the data of this March? I am not saying quarterly YOY data is useless but the March data will be very useful and informative considering the housing market plunge is expediting. It could show us the trend of the future housing market.

Wow, how disappointing that this blog is full of such hostile comments, mostly from one person. I really don't understand it. Terrible. The way most people would hope it would work is the blogger would post data along with some independent thought, hoping people would find it entertaining and educational. It seems as though some readers understand this, and are adding their own opinions to the mix, or asking for clarification and elucidation.

But what we seem to have here is someone whose only reason for posting is to criticize, question, and argue. Sometimes, only with himself - multiple posts in a row. This ruins it for the rest of us. It takes the focus off the information and the educated opinion of the original writer.

I like how Marcus claims that he is being personally attacked in here when it seems like he is the only one that is launching attacks on his own....his choice of language is very telling...

"cherry picking", "shell game", etc...and each comment drips with sarcasm - "I'm sure you'd like to go back to your previous posts", etc.

Marcus, you are the one setting a condescending tone here. Just present the data in the way you think it should be presented and leave out the personal attacks and sarcasm. Seriously, are you sad that you don't own a house or something?

I learn a lot more and get better information from the combination of both Marcus and Binyamin than I do from just Binyamin. And I find the interplay more entertaining :), though I would say the main job of a legit newspaper is to inform much more than it is to entertain.

By the way Binyamin, great blog, and I like your perspective and reports on a standalone basis too! But Marcus's is an important voice in balancing the institutional tendentiousness of newspapers who rely on the large real estate industry for revenues and is the subject of pressure from their powerful lobby. His tone may not be for the squeamishly faint of heart, but is not inappropriate and can be justified given the warranted view that enormous harm has been, and is being, wrought by irresponsible loan-takers, home-buyers, and mortgage lenders that artificially pumped up prices that are hurting more responsible, worthy, and unfairly penalized and frustrated persons.

But tone aside, I find that , like Binyamin's, Marcus's facts and analysis are incisive, smart, and informative, and that's the important thing.

There is a big problem with the data presented here. I don't think the actual numbers are wrong; rater, I have every reason to believe they are correct. The problem is in the use of median prices, which are known to be subject to huge swings due to changing mixes of properties sold. They are so variable that even nationwide monthly median sales data fluctuates significantly from month to month. Certainly, sales data for a single town, over a period of three months, has to be even less reliable.

It seems virtually impossible that the town-by-town housing market is remaking itself by the month, or by the quarter, or even over the course of a year. The idea that the pricing relationships between nearby towns is changing by tens of percent a year is absurd.

The best bet is to take the sales volume data and combine it with the Case-Shiller index for the Boston area. Then apply those numbers evenly across the region, carefully and conservatively applying individual town data taken over a period of time to perhaps adjust the numbers.

The thing that none of these reports ever captures is how price per square foot is developing. In the past 2 years, I have seen one piece (I don't remember if it was in a blog or a regular publication) that discussed. The picture was far more grim than these sorts of "feel-good" fluff journalism. The fact that fewer (and probably larger) houses are selling skews the numbers. In the towns like Winchester, Arlington, Milton, etc., there will always be demand for a limited number of larger homes. There prices won't get affected. However, when the rest of the demand evaporates, then the average price goes up. Plain & simple. Not really a scientific measure, is it?

Can Anybody tell me about the latest craze in real estate? You know, ripping out fixtures such as hot tubs from your own foreclosed house and trying to sell them out of storage garages. Is this the future of the real estate market? Are we headed towards the grapes of wrath or are we there already?

I agree with LynnLS. Much more data is needed to make anything out of these numbers. The extreme declines in median price in many of these towns almost certainly reflects a shift in the mix of houses sold rather than true price declines for comparable homes. I suspect, for example, that if one were to look more closely at the data for some of the pricier western suburbs (e.g. Weston, Wayland, Concord, Sudbury, etc...) there would be far fewer homes being sold in the 1 million + range than in the previous period.

But., hey.. if the bears out there believe in some of the 20%-30% price declines reported here and think you can get a $700k house for under $500k in these towns, then be my guest...

Jeff,

Monthly YOY sales and price data is useful for geographic units that generate large volumes of sales - the state, for example, or the metro area. Quarterly YOY data is more useful for looking at individual towns, because by adding together several months of transactions, it tends to produce samples that are significant in their size, thus reducing random variation.

As a local economist I thought I would just mention that March of 2008 was an odd month due to the early Easter. Holidays always skew economic activity, Easter especially since it moves from year to year. I encourage you not to place too much stock in March numbers.

Then again, as someone trying to sell his house, April is almost over and I still only have 1 showing. Things are not great, and will likely get worse.

G-man: "My question is: When are sellers going to "get-it?" It seems they're stubbornly staring through vaseline-coated glasses, clinging to glimmers of yesteryear."

I think most of the analysis of activity and prices IGNORES the sellers' issues. I tried selling my house for a year and half. I started at what I'd purchased the house for then steadily dropped the price until I literally would have had to write a check to sell my house. Sellers have mortgages to pay back, after all. I think this explains why there is so little activity out there. Prices have dropped substantially (I don't think any objective observer would deny this), and it's entirely possible they can't drop much more.

Of course medians aren’t perfect. Nothing is. But we don’t have—and won’t ever have—a complete and convenient set of housing data to play with. Warren spends a lot of effort combing through individual sales to exclude family transfers. Case-Shiller painstakingly tracks resales of individual homes over time. The effort must be exhausting, but necessary, because there just isn’t a one-stop source for all the housing data we’d like to see.

If you have ever used any statistical measure at work, you know this situation is not unusual. You’d always like to see how executive compensation affects merger activity, or whether left-handed people buy fewer scissors, or if flax seed oil reduces cancer mortality in women. But perfect data doesn’t exist. So you have to use multiple measures to try to get at the truth, always remembering the limitations of each.

About quarterly data: Sometimes quarterly data is all that’s available, as with Case-Shiller. And I understand the argument that using monthly data leaves you with tiny samples in some towns. However, an over-emphasis on quarterly data is a big problem when the very question at hand is whether the pace of decline is accelerating, or—as Binyamin has argued repeatedly—flat.

The extreme declines in median price in many of these towns almost certainly reflects a shift in the mix of houses sold rather than true price declines for comparable homes

Funny, isn’t it? We never heard how unreliable those darn median prices were during the boom—when prices were going up. And we still don’t hear it now when people talk about “immune” suburbs. Arlington, for example, has recently become a hotbed of new construction, something rare in the inner suburbs, and the new homes are the most expensive. Somehow, that gets translated into “Everyone wants to live here!”

Where median prices are falling, a changing mix may be part of the cause. But that means expensive homes are just not selling. They have not reached a market-clearing price, and as Kimberly Blanton points out today, they won’t, until prices come down further.

Just wanted to add a comment to originally posted by LynnLs "laughing" at young buyers (in their 30s) looking at 800k-1mil homes. I agree with a previous poster that this all comes down to personal finances and while you your husband may be in your 40's and have saved significants amount of $$ to afford a home in that price range -- you also have 3 kids which can be expensive. Some of these young buyers may or may not have children. We shouldn't make assumptions.

Kyle. Thank you for making my point. We already get that kids can be expensive, so we have that advantage going in. Believe me, even with a decent financial situation, we feel overwhelmed viewing million dollar homes.

There are some who are again passing judgement on young buyers, now assuming that they are clueless to the fact that having children presents significant additional financial stress.

I take this to heart because my husband and I recently purchased a home in a suburb we are proud to live in for $1.6M. We are 30 and 31, respectively. Our personal financial situation allows us to do this more than comfortably, while preparing for a child on the way and hopefully others to come. Our methodical and conservative financial planning has nothing to do with our age. That's the simple point I wish you would understand.

As an aside, as my husband and I searched for a home, we dismissed any Realtor who dismissed *us* as a result of our (relatively) young age as a person we had no interest in working with. While discrimination based on age/race/sexual orientation is illegal, we found it all too common.

Just a small point -- I too would rely on the Warren Group and registry data long, long, long before I would rely on MLS, but it is possible that some of the closings have not yet been recorded. I wouldn't say that this accounts for the differential between the MLS and the Warren Group (much more likely that it is human input error), but this does happen more frequently than people think -- esp. in all cash deals for the upper income homes.

Also, Binyamin is there any Boston-specific data for the various neighborhoods? I would speculate that there is a large disparity of price drops and increases by neighborhood (as with the foreclosure data you previously reported.)

mrs_in_mass. I rest my case with you.

Can we move on...I want to discuss the declines yet to come.

The sad truth is $115k a year combined income doesnt afford you a comfortable existence in Mass.... We rent and will continue to rent untill we find a house we like that we can get for the historical ratio of 2.5 times income. In our case that would be $287,000. We saw lots of house we liked at the 400k range the last few years maybe they will fall enough for us to buy. We plan on having kids and I may want to be ouit of the work force for a while so we would need to factor that into our calculations on how much we can afford.

M Homeowner:

We do report data on prices per square foot. A recent example is here: http://www.boston.com/realestate/news/blogs/renow/buying_and_selling/

MWest:

Here's the Warren Group data by Boston neighborhood. My apologies for the formatting. I don't have time right now to clean it up.

SINGLE FAMILY
Area 2007 2008 % 2007 2008 %
Allston 4 0 -100% 449000 0
Boston 8 9 12.5% 1947000 1950000 0.2%
Brighton 14 3 -78.6% 515500 285000 -44.7%
Charlestown 12 15 25.0% 615500 680000 10.5%
Dorchester 35 24 -31.4% 329000 309250 -6.0%
East Boston 4 13 225.0% 251450 210000 -16.5%
Hyde Park 28 26 -7.1% 332500 310000 -6.8%
Jamaica Plain 18 12 -33.3% 398750 498000 24.9%
Mattapan 17 6 -64.7% 320000 255000 -20.3%
Roslindale 25 17 -32.0% 350000 316500 -9.6%
Roxbury 8 6 -25.0% 662500 302500 -54.3%
South Boston 14 11 -21.4% 384500 400000 4.0%
West Roxbury 46 32 -30.4% 392500 407375 3.8%

CONDOMINIUMS
Area 2007 2008 % 2007 2008 %
Allston 20 15 -25.0% 274000 305000 11.3%
Boston 434 350 -19.4% 549950 525500 -4.4%
Brighton 129 35 -72.9% 412000 231900 -43.7%
Charlestown 66 43 -34.8% 445597 437500 -1.8%
Dorchester 230 111 -51.7% 275000 263000 -4.4%
East Boston 49 29 -40.8% 268000 215000 -19.8%
Hyde Park 16 9 -43.8% 277500 252500 -9.0%
Jamaica Plain 112 68 -39.3% 337000 346500 2.8%
Mattapan 14 7 -50.0% 265500 155000 -41.6%
Roslindale 34 17 -50.0% 308000 259250 -15.8%
Roxbury 80 49 -38.8% 322250 309900 -3.8%
South Boston 134 98 -26.9% 340500 386500 13.5%
West Roxbury 20 16 -20.0% 234250 269250 14.9%

Interesting. Is there any info on the seeming JP anomaly?

The historical ratio of income:mortgage price of 2.5:1 only really applies if rates are much higher. Today, interest rates are low, so ratios closer to 3.5:1 or more are possible. Also - that is a income to mortgage ratio, not home price ratio. With 20% down, considering everything, home prices in MA are not as out of line as some suggest.

Now, with that said, someday interest rates will climb. It might be in a week. It might not happen for 20 years. Who knows. But rates will not be 6% forever. In fact they might even go lower .. 5%. Heck, maybe even 4%. Note, they have been as high as 18%.

When rates do go back up, whenever that is, it will bring home values lower relative to salaries. Because home prices are based on CASH FLOW, not necessarily money supply.

I didnt create this funky system, I just live in it.

Somebody asked when will sellers get in, and I'll repeat. My family just sold our home in Framingham, and just bought a home in Southborough.

We sold our home in 7 days. We had 25 private showings scheduled within 2 days of listing. We staged our home well, meticulously maintained it, and priced it reasonably. The home we are purchasing, in a great area of town, was purchased 10% under assessment, and nearly 30% under initial asking price. It needs updates and has a little deferred maintenance, which most people dont want to deal with at the purchase price we are dealing with here. We never would have been able to afford that home 2-3 years ago. Overall we have benefited by this period of declining home values. We got a great home in the town that I have loved for years, and I cant wait to join the Southborough community.

I am seeing a lot of people at open houses.

I am not a "RE bull" by any stretch of the imagination. In fact I have been very bearish since 2006. But with rates low, the local economy stable, and (some) home sellers willing to negotiate, its not as bad a market as it was last year.

Prices may fall further this year. In fact it is likely. But my son is starting HS this fall, so it was the right time for us to move. We didnt want to wait and have him change schools after 1 year, just to save a little more money.

Also, how much your home value has declined depends upon its location and condition. Under-maintained homes are being hit really hard. We sold in 7 days since our home was clean and tight - it took a lot of time and money to make it that way. It was no coincidence. Buyers hold more cards than sellers these days.

A question to ponder is why the value of SFHs in typically "blue-collar, middle-class" towns/ cities are now seeing an increase? The data put forth in this article is a snapshot. How can some of the cities/towns make this list. Woburn, Stoneham, and North Attleboro are historically more affordable communities. In a recession, like the one we are currently in, people try make their dollars go a long way. They can justify putting their money to a larger home or property in a more affordable community. This is perhaps why the increase is showing in those communities.

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