Boston, statewide home markets power into Fall
By NBP Staff | October 27, 2015, 18:59 EST
Boston’s residential real-estate market showed gains in September while single-family home sales statewide jumped 25 percent, the best performance for the month in 10 years, data released Tuesday show.
Home sales in the Hub climbed almost 15 percent during the quarter that ended in September compared with the third quarter of last year, and surged almost 22 percent statewide for the period, the Warren Group said Tuesday. The Boston-based publisher of Banker & Tradesman, which focuses on real estate markets and businesses, said condo sales jumped almost 20 percent across the state last month compared with a year ago.
“September’s numbers are a continuation of the strongest spring and summer market Massachusetts has seen in 10 years,” Tim Warren Jr., chief executive of the Warren Group, said in a statement released with the data. “The increase in sales, and the steady increase in median sales prices, shows there was a good amount of pent-up demand for purchases.”
Greater Boston home prices rose a healthy 4.6 percent in August from a year earlier, compared with a 4.7 percent gain nationwide, according to the Standard & Poor’s Case-Shiller Home Price Index released Tuesday. Still, Boston lagged far behind double-digit growth rates in San Francisco, Denver and Portland, Oregon, the data show. But overall, the latest figures indicate a bounce back in residential real estate continues to gain strength following the plunge in housing values that precipitated the financial crisis of 2007-2009.
“Home prices continue to climb at a 4 percent to 5 percent annual rate across the country,” David M. Blitzer, managing director and chairman of the Index Committee for S&P Dow Jones Indices, said in a statement released with the Case-Shiller data. “Most other recent housing indicators also show strength.”
Condominium prices in Boston climbed 8.8 percent in September, according to Seattle-based Zillow, the realty-focused website, while single-family homes rose 4.9 percent. It said a rental index for the city climbed 6.8 percent.
Statewide, demand for residential real estate in Massachusetts showed continued strength into September as closed sales of single-family homes jumped almost 18 percent while the median sales price rose 4.8 percent, according to the Massachusetts Association of Realtors, a trade group. It also said the median sales price gained 4.8 percent to $340,500 from $325,000 a year earlier.
On Monday, the U.S. Commerce Department said new home sales dropped to a 10-month low in September, including a record plunge in the Northeast. But the median price for a new home climbed more than 13 percent from a year earlier, to $296,000 nationwide, suggesting demand remains strong while factors including availability of buildable land may be restraining sales, Bloomberg News reported.
“Prices are rising the fastest in markets where job growth and net migration are the strongest and inventories are the tightest,” Mark Vitner, a Wells Fargo Securities economist, told the Associated Press, referring to data showing sale prices for all homes in major metropolitan markets. “Portland is an excellent example,” he said.
Sale prices rose 9.4 percent in Portland over the year through August, the Case-Shiller data show. Zillow’s figures show the Dallas-Fort Worth area with the biggest price increases last month, with condo values jumping 20 percent and single-family homes gaining almost 15 percent from a year earlier.
The Commerce Department report on new home sales “does little to alter our view that the housing market is continuing to recover,” Daniel Silver, an economist at JPMorgan Chase told Reuters. “We view the new home sales data as unreliable and many other more reliable housing indicators have been sending upbeat signals lately.”
In the Bay state, the supply of single-family homes available for sale shrank almost 17 percent in September from a year earlier and the average time it took for a house to sell dropped by a week to 88 days, the Massachusetts industry group said, suggesting rising demand.
“An active summer real estate market has become an active fall real estate market as buyers and sellers were very busy in September,” said Corinne Fitzgerald, a broker and agency owner in Greenfield who is also president of the industry group. “We haven’t seen an indication from buyer clients yet that their desire to own a home has cooled off as we moved into the fall. This momentum should continue for at least the next few months.”