Big Papi strikes Marblehead housing market again
My 2009 mid-year review published in the Marblehead Reporter described the phenomenon that the local real estate market was like David Ortiz’s season: starting so poorly that even with great numbers later in the season the year’s median price would still be quite low.
Well 2012 was much like 2009, at least for the local real estate market (Big Papi himself, courtesy of a new diet and/or because he was entering a contract year, hit 318).
My November 10 article Prices – are they up or down? explained what has been happening in the market, with a greater percentage of sales occurring at lower levels as investors and first time buyers sought properties in this price range. The increased share of sales at lower prices, rather than the prices themselves, caused the median price for the market overall to decline.
Here are the same two tables updated: median price by quarter since 2009, and the percentage of sales that took place under $500k.
The phenomenon of increases sales at lower prices was most marked from late 2011 to the summer of 2012. My November report suggested that this trend would reverse in Q4 and guessed that the median price for that quarter would recover to $535,000. In fact it was $539,450. On the other hand I guessed that the median price for the year would come out at $517,000, while the actual number was $510,000.
As always, it is important not to get too wedded to exact numbers in a market like Marblehead where the number of transactions remains quite small and where there are often significant gaps in price between sales.
The biggest number this year in percentage terms was the drop in Q2 from a year ago, but if you look at the numbers per quarter for the last four years there is a strong case that the anomaly was Q2 2011, not Q2 2012. Looking into 2013, I see that the median price of the 82 non-FC/SS houses for sale today (I didn’t think to check this on the 1st, but it’s close enough for government work) is $715,000.
Now, I have no way of course of knowing which will sell and close in the first half of 2013, but it seems a reasonable guess that the median price will show an increase, possibly quite a sharp one, over the $490,000 in the first half of 2012.
What does all this mean? As I’ve indicated in recent posts discussing sales, volume has returned to the market and sales are closer to normal levels. This indicates that buyers are coming out again, as the consensus view is increasingly that the housing market in the US has bottomed and is on the rise again.
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