February’s numbers are in and the trend of prices down, numbers up continues for the second month of the year.
Single-family home sales rose 30.84 percent versus the same month last year, to 2,868, according to The Warren Group, publisher of Banker & Tradesman; that’s the highest number of homes sold in February since 2005. Prices dropped, however; the median single-family home price in was just shy of $300,000, down 4.32 percent from last year. Last month the median price was flat compared to 2015, while the number of sales rose 26 percent.
The Massachusetts Association of Realtors (MAR) reported last week that inventory of single-families was down about 3,000 units for the month compared to 2015, while the supply was down a whopping 31 percent, to less than three months of inventory.
The condominium market saw a similar swing, jumping to 1,150 units sold, a 23 percent increase, while the median sale price fell to $275,250, a 3.9 percent decrease. MAR reported condo inventory was down 17.5 percent, while supply dropped nearly 29 percent to just eight weeks.
Also in MAR’s releases, pending single-family sales were up a staggering 75 percent for the month and condos were up nearly 62 percent. New listings rose 56 percent and 39 percent respectively, so expect another big jump in sales figures in March.
The numbers combined paint a picture of fewer homes available compared to last year, and yet volume was up and prices were down. Volume up, prices down at least makes sense – there are more houses selling, so the prices are coming down, a welcome relief from 17 months of price increases in the state’s red-hot housing market.
Perhaps the best explanation for the double-digit percentage increase in closed sales is not in the numbers, but in the air: this year’s winter was incomparably better than last year’s. Homes obviously show better when they aren’t literally buried in snow. And if homebuyers are able to actually leave their own houses, they’re better able to view those homes for sale; if sellers are able to open their front doors, really, sales can only improve.
According to lenders and Realtors, the TILA-RESPA Integrated Disclosure (TRID) rules that came into effect in October have delayed closings somewhat, but not enough to account for the wave of closings in January and February of this year.
Perhaps the price drops truly are a course correction, allowing the market to recover from months of torrid growth. Some of the state’s hottest towns are slowing, stagnating and even dropping. But with the reduction in inventory and supply, we wouldn’t bet on it. While the first day of spring was technically last week, the market may just be catching its breath before the spring market truly begins. On the whole, it remains a seller’s market and unless an absolute deluge of new listings appears, it’s likely to remain that way for the foreseeable future.