The best time to buy or sell a home in Massachusetts
(Note: this article was updated in February 2016 at When is the best time to buy or sell a home in Massachusetts?)
Ok, I know, you don’t own a home – or are not thinking of buying a home – in “Massachusetts” but in Marblehead, or Swampscott, or Salem or Beverly.
But… as a commentator on a blog article I wrote last year pointed out, it is always useful to know what is going on beyond one’s immediate neighborhood. That may mean the state of the economy, which will affect mortgage rates, or geopolitical developments, which affect general confidence.
We all spent 2013 reading of bidding wars and dire warnings of “a new bubble”. I freely admit to greeting bubble warnings with disdain, even with that well known refuge of the desperate – or at least the British – sarcasm.
Well, the results are in: the housing “bubble” in Massachusetts in 2013 produced just a 5% increase in the median price of a Single Family Home (SFH), as sales increased by 8%. Bubble? I don’t think so.
Here are the numbers. First sales, close to every Realtor’s heart:
The peak years in MA were 2004/05, with sales close to 50,000. They dropped to around 35,000 by 2008 and stayed at that level for 4 years, before rebounding nicely in the last two years and are now not far off record levels. And sales would undoubtedly be higher if there were more houses available for sale.
Median prices: here is a chart showing quarterly prices for the last four years. (Note that in my reports, sales numbers include all recorded MLS sales, while median prices exclude distressed sales – foreclosures and short sales).
I have shown just the last 4 years to get a big enough scale to demonstrate that there has not been much overall movement. The peak median prices in Massachusetts were achieved in 2004-2007, with a range of $345,000 – $362,000, and an average of about $351,000 over that period. Prices fell 17% from the absolute peak, and have since recovered so that in 2013 they were only 6% below the peak.
Now I come to the point of the title of this post. I discovered an interesting phenomenon as far as timing is concerned. We know the market in New England is seasonal (how many people went house hunting when the polar vortex threatened us recently?) But there is a clear pattern as far as Massachusetts as a whole is concerned.
First, look at this chart of quarterly median prices with the highest price of the year highlighted:
In 12 of the last 14 years the highest price has been achieved in the third quarter.
Now look at this chart, which has the same figures but this time with the lowest quarterly figure highlighted:
In 10 of the 14 years the lowest median price was recorded in the 1st quarter and in the other 4 years it happened in the 4th quarter. In no year did the lowest price occur in the second or third quarters!
There are many factors in deciding when to buy or sell a home, but here is a reason that buyers may want to get on their skates and buy in the first quarter of 2014.
If you are considering buying or selling a home and have questions about the market and/or current home prices, feel free to contact me on 781.631.1223 or andrew@HarborsideRealty.com.
Andrew Oliver is a Realtor with Harborside Realty in Marblehead