Swampscott 2015 Condo market review
The highlights of this Swampscott 2015 Condo market review are that sales were down slightly from last year’s record level, while the median price declined as a result of a change in the mix of sales. Perhaps the most striking number, however, is the ASR* number which suggests a significant increase in Assessed Values for condos in Swampscott next year.
After a strong recovery in 2013/14 the median price slipped last year, but as the table below the chart shows this was the result of a change in the mix of sales in the first half of the year. Because of the small number of sales and seasonal variation (weather!) I do not report on quarterly numbers for condo sales. Swampscott condo market analysis is further complicated by the fact that there is a huge range of condos, from the older units around Vinnin Square to the brand new oceanfront luxury units on Humphrey Street.
The median price is that at which 50% of the sales take place both above and below the price. In H1 2014 only 41% of the sales took place below $250,000, so the median price must have been higher than that. It was – $272,000. In H1 2015, however, a full 58% of sales occurred below $250,000, so the median price was lower than that – $242,000. Note also the much smaller number of sales in 2015 : the smaller the number the greater the chance of a large swing in the median number.
Condo sales averaged 65 a year in the 2003-2006 period before slumping to a low of just 21 in 2011. The recovery since then has been quite dramatic. Both new construction and conversions have contributed to the growth in sales.
Interestingly, the number of condos for sale has increased in recent years – at least until 2o16 – although the number on July 1 has not approached the 45 and 47 of 2005/2006. I will monitor inventory during the coming year.
The ASR is the ratio of Assessed Value (AV) to Sales Price, so if the ASR is less than 100% that means sales are taking place above AV. In 2015, despite the revaluation that occurred in 2014, the median ASR was just 79.2%, meaning that the median sale occurred at some 26% (100/79.2) above AV. Clearly, it would be logical to expect a jump in condo AVs next year.
Just like the Single Family market, sales and prices of condos in Swampscott have recovered sharply from their depressed levels during the great recession, and the market now is back to a more normal state, albeit one where supply remains an issue.
* 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.
Properties selling above their AV will have an ASR below 100%. What this means is that in a period of rising prices the ASR is likely to be falling. So what we, as homeowners, want is an ASR below 100% and falling.
Remember that AVs are a lagging indicator: the tax bills that have just been sent out for FY2016 are based on actual sales in 2014. Thus the 2015 sales data, reported in this review, will be the basis for FY2017 assessments.
If you – or somebody you know – are considering buying or selling a home and have questions about the market and/or current home prices, feel free to contact me on 617.834.8205 or Andrew.Oliver@SothebysRealty.com.
Andrew Oliver is a Realtor with Harborside Sotheby’s International Realty. Each Office Is Independently Owned and Operated
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