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Runaway prices?

Posted by Scott Van Voorhis May 29, 2013 07:29 AM

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As prices head skyward, sellers are finally getting off the fence.

New listings jumped 12.7 percent in April, with a total of 9,350 homes hitting the market in April, the Massachusetts Association of Realtors reports.

It was the biggest surge of inventory since April 2010, when sellers rushed to get their homes on the market amid the frenzy caused by the expiration of the first-time buyer tax credit.

Yet this all may be too little, too late.

Even with the increase in new listings, it is barely enough to keep up with current demand, with the homes hitting the market getting snapped up as quickly as they come on.

Despite April's jump in listings, the overall number of homes on the market is still down by more than a quarter compared to the spring of 2012, MAR reports.

Here's what Sam Schneiderman, president of the Massachusetts Association of Buyer Agents, had to say.

"Despite the sharp increase in new listings last month, there are still more buyers than sellers in most communities which is why we are also seeing extraordinary price gains over the previous month," Schneiderman said in comments emailed over this morning. "We continue to see multiple buyers making offers on many new listings and that is pushing the prices up."

The big question now is whether anything short of say a truly massive influx of new listings - say 50 percent - will be enough to put a brake on prices.

Anyway, it should be no mystery why sellers are starting to jump back in - just take a look at what is happening with prices.

Boston area prices rose 6.7 percent in March compared to the same month the year before, according to the latest Case-Shiller report, the gold standard for the real estate industry.

Local market trackers are reporting even bigger increases.

The median price for a single-family home in Massachusetts rose 10.5 percent this April compared to April 2012, to $315,000, according to MAR.

The Warren Group, publisher of Banker & Tradesman, pegged the increase at 14 percent, with the median price statewide now at $313,000.

Are we already on our way to another housing bubble? Short of a big pullback by the Fed on its campaign to keep interest rates at artificially low levels, can it be stopped?. What's your take?

This blog is not written or edited by 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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