YOUR Massachusetts Real Estate Market Update for the week of August 12th
The market has exploded. Sales are up. Inventory is way down. Prices have begun a serious climb… Oh, wait. That is the script for a not so distant future video… The fire hasn’t been lit… Yet. But all of the supplies which include gasoline are ready to go.
Today the market is more of the same with the summer slug along. It’s going to be this way for another couple of weeks. But there is an interesting development with inventory levels.
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Let’s jump into the Single-Family market stats.
Inventory continues to plug along which is completely expected for the Summer. But it’s not really falling. Which is a surprise.
We now have 5,081 Single Family homes on the market in the state of Massachusetts. This is down slightly from the 5,126 units last month, but right in the range of the 5,059 4 weeks ago, 5,075 three weeks ago and 5,078 from two weeks ago. Ya. Inventory is level. We now have .4% more homes on the market than 28 days ago.
We now have 1,165 more houses on the market when compared to the same week last year. And this is a bit of a pullback. But we are seeing the levels between 2022 and today tighten as we now have only 216 fewer houses on the market compared to 2022.
This is the story with inventory. It being level rather than pulling back is bringing us on the path of crossing the 2022 inventory levels.
The 4 week rolling average is 1,039 units.
This week we put 953 Single family homes under agreement. This was real big jump as it’s 152 units or 19% more than the same week last year when we put 801 homes under agreement.
VIDEO EDITOR NOTES: Bring the chart back up and have a box around the last four weeks of Data. Just like we did last week. The four week rolling average is 927 units.
So when compared to last year’s market… New listings were up by .4% while under agreements were up by 19%.
The Pendings to New Listing ratio is 93.3% which is compared to the 88.5% that we saw this week last year. What this means is that 93% of all the properties that came on the market two weeks ago went under agreement last week.
There were 607 Single Family homes that closed last week for an average sales price of $836 thousand dollars and a median sales price of $660 thousand dollars. Sales levels compared to the same week last year were up by 65 units or 12% as there were 542 Single Family homes that sold this week last year for an average price of $774k.
Months of inventory. This is how we determine what type of market we are in. 0 to 5 months is considered a sellers’ market with the closer to 0 you get… The more aggressive a seller’s market.
This week’s Months of inventory fell to 1.63 months from last week’s 1.75 months. The 1.63 months this week is compared to the 1.31 months this week last year.
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Now onto the Condo market…
We now have 553 more units on the market today than today last year. 195 more than compared to the inventory levels of 2022 and 47 more units than in 2021.
There were 403 condos that came on the market last week with the four week rolling average of 451 units.
The 403 units listed was 16 units or 4.1% more than the 387 condos that came on the market the same week in 2023.
This week we put 356 units under agreement. This 356 condo sales was 16 units or 4.3% fewer condos than last year when we put 372 condos under agreement.
The four week rolling average for under agreements is 361 units.
So 4.1% more listings that came on the market when compared to this week last year while selling 4.3% fewer condos.
The condo Pendings to New Listing ratio this week fell to 84%. This is compared to the 85.1% that we saw this time last year.
There were 245 condos that sold this week for an average sales price of $710 thousand dollars and a median sales price of $568 thousand dollars. This same week last year there were 195 condos that sold. So sales levels were up by 25.6%.
Months of Inventory decreased to 2.04 months from last week’s 2.11 months. This is compared to the months of inventory levels of 1.61 months this week last year.
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Time to talk about Interest rates…
Since we last spoke, interest rates fell. A lot. But in the recent week they have ticked up nearly a quarter of a point.
But interest rates are down still a quarter of a point this month and are down .64% from this time last year.
Keep in mind that for every one percent that interest rates fall, then home buyers pick up 10% of buying power.
In other words, let’s say interest rates are 7% today and that you can afford to buy a $500,000 house. If interest rates come down 1% to 6%, then for that same mortgage payment that buyer can now afford a $550,000 house.
Let’s circle back to my intro. Check this article out. The Value of US Housing Hits Record $50 Trillion, up 7% in Past Year, Just in Time for FED Rate Cuts.
Home prices in most places throughout the country didn’t go down. But weren’t the FED’s rate hikes supposed to slow down the economy?
It didn’t happen and now housing is the least affordable it has been in US history. In reality, the total value of the US housing market grew by 6.6% year over year.
Redfin reported that the total value of US homes gained $3.1 trillion over the past 12 months to reach a record $49.6 Trillion. But here is a staggering stat. The total value of U.S. homes has more than doubled in the past decade, climbing nearly 120% from $22.7 trillion in June 2014.
Broken down by age group, the total value of homes owned by millennials rose 21.5% year over year to $8.6 trillion. This is nearly four times as fast as any other generation.
But this does make sense as millennials are now the largest generation by population making up a larger share of the homebuying market. Incredibly around two-thirds of the mortgages taken out in 2023 were issued to homebuyers under the age of 45.
Baby Boomers still rule the roost, but Millennials are on the rise! The value of homes owned by baby boomers increased 6.1% to 19 Trillion while Gen X home values rose 5.9% to 13.6 Trillion.
Have you heard all the talk about Recession lately?
Unemployment is rising, stocks are falling while bond yields are below short-term interest rates.
I read a poll that said that 59% of respondents believe that we are in recession.
I personally trust Main Street over Wall Street and especially K Street.
Because… Check this out.
Over ten percent of credit card outstanding debt is over 90 days delinquent.
It’s not just credit cards, it’s also auto loans as well.
Credit card delinquency has increased rapidly since 2021 and is now higher than in 2019.
What is interesting is that delinquencies have been concentrated among credit cards originated in the last few years and that these credit cards were much riskier than in previous years.
Kind of makes sense, right? These were the people who turned to credit cards in order to fill the gap of increasing prices and stagnant income gains. This was the rabbit in the hat. This gave them a little more time and pushed off the inevitable. But the piper has returned and it’s now time to pay him.
So what does all of this mean for housing? While some of these folks own houses, the ones that do are most likely sitting on a boat load of equity. While I don’t know for sure, I would imagine that the plurality of this stat are folks that are renters.
But here is the future issue and this is how it’s all tied together. We talked about how a recession is coming and most likely is already here. Delinquencies are up. Delinquencies are going to lead to banks holding back lending which in turn will exasperate a downturn. But this is what happens.
Banks will still lend, but they will increase their lending standards.
Falling interest rates couldn’t happen at a better time. It will provide some relief to all of the money people are spending on their credit card debt. And it will also help stimulate the housing market that is sitting in a sales level dumpster.
Stimulating the housing market will stimulate the largest contributor to the US economy.
Oh and housing prices… Get ready for them to go up even more!
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