Massachusetts home sales reach highest level since 2004
According to the Massachusetts Association of Realtors (MAR) July Report sales of Single Family Homes (SFHs) in July rose 20% from a year ago, while the median price at $350,000 increased by 8%. The number of sales was the highest in one month since July 2004.
Condo sales jumped 24% from a year ago, with the median price at $314,500 showing a 5% increase.
According to MAR, the SFH median price was unchanged from June 2013, while the condo median price actually declined by 2% from June.
As always when reporting statistics it is important to be clear as to exactly what is being reported. MAR statistics include both distressed (foreclosures, short sales) and non-distressed sales. Since distressed sales typically occur at a significant discount to non-distressed sales, inclusion of both in one index can be misleading. That is especially true when the mix of sales is changing, as it is now. If there are fewer sales this year at distressed, lower prices, then the median price will automatically increase for the overall market.
I continue to believe that a truer picture of the underlying market can be gathered by excluding distressed sales, as I do in all my numbers. Using MLS data, the median SFH in July for MA was $365,000, up 4% from a year ago and down 1% from June. For condos the median price in July was $324,500, unchanged from a year ago and down 2% from a year ago.
I caution that it is dangerous to draw conclusions from one month’s data (which is why I use quarterly numbers for my reports). Another factor is that prices do show quarterly fluctuations. In Marblehead, for example, there has been only one year – 2012 – in the last 12 where the median price increased each quarter from the previous quarter.
As August draws to a close, I have looked at preliminary numbers for Massachusetts for the two months of July and August. The median price for non-distressed sales shows a year on year increase of 5% for SFHs and an increase of 2% for condos. These numbers support the view that the market remains active with prices overall modestly higher than a year ago.