Marblehead 2016 housing market: new record
In 2016 the median price of a Single Family Home (SFH) increased by $23,500, or 4%, to $620,000, the first time the median price in Marblehead has exceeded $600,000 for a year. As in every year since 2000 except 2010 and 2011, the median price was higher in the second half of the year than in the first half.
Sales were in line with those of the two prior years – 248 vs 245 and 239 – while the number of SFHs for sale on average was much the same as 2015 but down about 25% from 2013 and 2014.
It is important to bear in mind that only around 4% of Marblehead’s more than 6,200 SFHs change hands publicly in any year, but 4% is a reasonable sample, with sales taking place from $300,000 to $4 million.
The first chart, with the numbers below, shows the median price for the two halves of the year and for the full year. 2016 was the third year in a row where the median price reached $600,000 in the second half of the year, but the first where the full year exceeded $600,000.
The quarterly numbers show how the market can vary from quarter to quarter. In the last 6 years the highest quarterly median price has been recorded once each in Q1 and Q2 and twice each in Q3 and Q4.
Sales have been more or less flat for the last 5 years, recovering from the slump of the Great Recession, but still not back to the levels of the peak years. There is little doubt that lack of supply has been holding back sales.
Within basically flat total sales there have been major shifts, with far fewer sales under $400,000, and big increases in all price brackets over $600,000.
Houses For Sale
The chart below demonstrates two things: the seasonality of supply, and the drop in SFHs for sale since 2014.
Assessed Value to Sales Ratio (ASR)
One way I measure prices is by the ratio (ASR) of Assessed Value (AV) to Sales Price (SP). The ASR is the AV divided by the SP: if the SP is rising (prices going up), the ASR will fall. In a period of rising prices the ASR is likely, as a lagging indicator, to be below 100%.
As we hope out properties are worth more than the AV an ASR below 100% as a positive sign. Remember that AVs are a lagging indicator: the tax bills that have just been sent out for FY2017 are based on actual sales in 2015. Thus the 2016 sales data, reported in this review, will be the basis for FY2018 assessments. Any my data compares 2016 sales with AVs based upon 2015 prices.
Let’s look at the ASR in recent years:
For the last 4 years the ASR has been around 90% or below, indicating that the median sale has been taken place at about a 10% premium to Assessed Value.
Outlook for 2017
Immediately after the Election I published What does the Election mean for real estate markets? in which I made the case:”The removal of a lot of strangling regulations and the end of gridlock in Congress will produce stronger economic growth. Major infrastructure spending will boost jobs and wages at the lower end, while lower corporate tax rates and lower personal tax rates will produce increased personal wealth. Interest rates will rise, reflecting the stronger economy, and the demand for housing will increase. Greater wealth and confidence will provide a boost to the higher end of the market.”
I have no doubt that 2017 will provide many surprises along the way, but with a stronger economy and low supply of houses for sale, there seems little reason for home prices in Marblehead not to continue their steady, but modest, upward movement.
Are you thinking of selling your home? If so please contact me on 617.834.8205 or Andrew.Oliver@SothebysRealty.com for a free market analysis and explanation of the outstanding marketing program I offer.
Not sure which broker to use to sell your home? Read Which broker should I choose to sell my house?
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.
Andrew Oliver is a Realtor with Harborside Sotheby’s International Realty. Each Office Is Independently Owned and Operated