Marblehead Condo Market 2013 Review and Outlook
After several years of high inventory the condo market in Marblehead turned around sharply in the second half of 2013.
At mid-year there were 24 condos available for sale after just 12 sold in the first half of the year.
In the second half of the year, however, there were 34 sales, the highest number in any six month period since 2005, and as of today there are just 9 condos for sale in Marblehead, and 3 of those are priced at $625,000 or higher.
The law of supply and demand suggests that 2014 will be a good year for condo prices in Marblehead.
Reasons for the turnaround include:
1. Condos are often bought by first time, younger buyers, who may be feeling more confident about their job prospects.
2. At the higher end, condos are bought by people down-sizing or wanting a summer property.
3. As mortgage rates moved up during 2013, Adjustable Rate Mortgages (ARMs), which are often used by condo buyers, became more attractive as the benchmark interest rate used to price ARMs did not move up as much as that used in pricing 30 year mortgages.
4. The days of converting 2/3 unit apartment buildings and calling them condos are gone. Today’s condo buyer wants a purpose-built or professionally converted condo, and there is a limited supply of these in Marblehead.
Let’s look at the numbers. First sales:
Shortage of supply may be the determining factor in 2014 sales.
Next median prices (note that all median prices in my reports exclude FCSS):
Here are the actual numbers:
While the 31% increase in 2013 sounds exciting, note the drop in 2012, when pricing was affected by the mix of sales, with more taking place at the lower level, clearing out the market much as SFHs did from late 2011 into early 2012.
One way I measure prices is by the ratio (ASR) of Assessed Value (AV) to Sales Price (SP). If the ASR is above 100% that means that properties are selling for less than their AV. Conversely, properties selling above their AV will have an ASR below 100%.
As we all hope out properties are worth more than the AV we look for an ASR below 100% as a positive sign. Here are the numbers for condos for the last three years, with a split below and above $300,000:
Again, here are the actual numbers:
While condos $300,000 and above have been selling well over their AVs for the last three years, 2013 was the first year that those under $300,000 above AV, although 2012 was very close. NB there were only 3 sales under $300,000 in H1 2013 so the high ASR had little impact on the year overall.
Overall, the condo market in Marblehead appears to be in good shape, lacking only supply, so if you are thinking of selling this may be the time to get serious.
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