July Market Wrap
This week saw the release of July market stats for Massachusetts.
First up, data from the Warren Group (reported here):
SFH sales: 5,070(down 27% YOY)
SFH median price: $339,000 (down 6.1% YOY)
Condo sales: 2,692 (down 23.5% YOY)
Condo median price: $277,000 (down 4.2% YOY)
Next up, data from the Massachusetts Association of Realtors (reported here):
SFH sales: 3,982 (down 25.3% YOY)
SFH median price: $361,750 (down 3.5% YOY)
Condo sales: 1,883 (down 21.4% YOY)
Condo median price: $276,000 (down 4.1% YOY)
For those graphically inclined, here are the MAR price and inventory data relative to recent history. First up, SFH numbers:
(Note the inventory numbers reflect corrections for June by MAR).
Here are the condo figures:
I'll post the sales graphs soon, along with the trend in months inventory. Needless to say, the numbers for July were unquestionably weak. The "soft-landing" scenario of moderate price growth seems to have suffered a rapid demise. The question of the day now is: how far down will prices go?
3 comments:
For condos I think this is going to be HORRIFIC.
The amount of inventory is simply staggering and with how quickly sales are dropping off we're looking at like almost a year's worth of inventory, and that doesn't count all of the condo projects in the pipeline expected to open in the next year or two.
For condos I could see a return to 2002 or earlier prices.
actually, condos have reversed the trend my friend. Babyboomers all want condos.
It should be interesting when the inventory numbers adjust and the non-serious sellers pull out of the market. Lots of folks are trying to "catch a price". If they don't get it, they don't sell. IMHO, those people are artificially skewing the inventory numbers.
WillyDog,
If BabyBoomers all want condos then why is there a record amount of inventory and why are the sales falling off just as fast as SFH?
There is no reversal in trend. Look at the inventory numbers from 2002 to now.
SFH 2002 - 25,000, 2006 - 45,000 a 180% increase
Condos 2002 - 8,000, 2006 - 21,000 a 262% increase
Not only that but condos are being built at a higher rate and in the next 2 years there are a ton of projects projected to finish. The Boston Globe in November 2005 quoted the BRA as saying there are currently 14,000 condos in various stages of development in the Boston area.
I'm sorry but there aren't enough BabyBoomers to support that inventory, especially since the BabyBoomers won't be able to unload their SFH in the 'burbs to trade up.
Condos historically have always lost more value during a downturn and this time will be no different, the huge amount of inventory will drive prices further than SFH declines.
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