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Prices spike as listings plunge

Posted by Scott Van Voorhis  January 24, 2013 09:07 AM

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Maybe it's not quite time to press the panic button. But some big red flags are popping up right now related to home prices and inventory.

Massachusetts home prices jumped 10 percent in December over December 2011, hitting a median price of $303,500, the Massachusetts Association of Realtors reports.

It is rather odd trend for a December, typically a time of year when the real estate market takes a holiday slumber and only bargain hunters and desperate home sellers are to be found.

In fact, it is the biggest December price spike since 2010, when Congress was artificially ginning up sales and prices with the $8,000 home buyer tax credit.

But instead of the phony baloney tax credit driving up prices, we now have a dizzying plunge in the number of homes on the market to blame.

The price spike in December coincided with a big drop in the months of supply of unsold homes on the market, which fell from 6 months in November to 4.7 months in December, MAR reports.

That's a more than 20 percent drop in  inventory in a single month.

For buyers, this trend does not bode well, with the potential for a some big price increases this spring, unless, of course, there is a surge of sellers rushing to put their homes on the market.

So far, there is no sign of that, but of course, the year is young and the spring selling season is not here yet.

That, anyway, is the biggest news buried in the press releases sent out this morning by The Warren Group and the Massachusetts Association of Realtors tallying the 2012 sales numbers.

Massachusetts saw a big rebound in home sale in 2012, the best year since at least 2006, according to The Warren Group, with the Massachusetts Association of Realtors arguing only 2005 compares.

The Warren Group, publisher of Banker & Tradesman, pegs the total home sales increase at 18 percent, while MAR offers 21 percent.

In fact, home sales in 2012 were just 10 percent below the peak reached in 2005, when 51,078 homes were sold, a look at MAR's number show.

This blog is not written or edited by Boston.com or the Boston Globe.
The author is solely responsible for the content.

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About boston real estate now
Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

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