Will the median home price in Marblehead reach $700,000?
In 2016 the median price of the Single Family Homes (SFH) sold in Marblehead was $620,000, exceeding $600,000 for the first time. In the first half of 2017 the median price reached $628,000 and in Q3, which ended yesterday, it seems probable that the median price will top $700,000 (it would be $710,000 if the remaining sales scheduled to close this week did take place).
Does this mean that prices are booming in Marblehead? Well, first let me make this statement about statistics: Statistics can be helpful to understanding a market, but they can also be dangerous if taken out of context. Only rely upon statistics from trusted, informed sources. Be skeptical of numbers which claim to prove the writer’s theory if given without explanation.
And here is the not-legal not-small print: in Marblehead the 250 SFH sales reported each year through the MLS system constitute just 4% of the more than 6,200 SFHs in the town. Thus, in any year the sales that occur may or may not be representative of “the market” overall. Having said that, since sales so far in 2017 have taken place between $290,000 and $5.8 million, it is a reasonable assumption that the median price – for example number 51 out of 101 so that there are an equal number, 50, of sales above and below the median sale- provides a good guide to what is happening in the market.
Clearly, the larger the number of sales, the more reliable is the median price. In the entire state of Massachusetts, for example, there will be over 50,000 SFH sales this year and so the median figure for the State will be a very good indicator. And the smaller the sample, the greater the likelihood that numbers will fluctuate over shorter periods of time. One of the reasons for this fluctuation is that with a small number of sales there can be some quite large gaps in sale prices. For example, there were no sales in Marblehead in Q3 between $675,000 and $710,000. Thus, had there been just a few more sales under $675,000, the median price would drop $35,000 from the current projected level of $710,000.
I take no notice of monthly figures for median prices. In the winter the number of SFH sales in Marblehead may drop into single figures, making the median price quite meaningless.
One of my favorite reports – and one that fits in well with my Lies, Damned Lies and Statistics series – came from a broker in Watertown last year. Citing one month in the early months when the median price dropped 30% the report recommended that anybody selling in the second half of the year should expect to realize a much lower price. You know what’s coming – in Watertown in the second half of 2016 the median price jumped sharply to a new record high.
Let’s go back to Marblehead. Q3 has ended and it will take a few days for all sales to be recorded in MLS. What we do know is that, after a slow start to the year, there was a sharp pick up in Q3 in the number of sales over $1 million – including the second sale of the year at $5.8 million – and a sharp drop in sales under $500,000. I will analyze the break down of sales by price in more detail when I publish my Q3 report once all the sales are recorded.
If you – or somebody you know – are considering buying or selling a home and have questions about the market and/or current home prices, please contact me on 617.834.8205 or Andrew.Oliver@SothebysRealty.com.
If you are looking to buy, I will contact you immediately when a house that meets your needs is available. In this market you need to have somebody looking after your interests.
Are you thinking about selling? Read Which broker should I choose to sell my house?
Andrew Oliver is a Realtor with Harborside Sotheby’s International Realty. Each Office Is Independently Owned and Operated