South Shore Real Estate Market Sending Mixed Messages – February 2013

| March 27, 2013 | 0 Comments

As we sit on the cusp of the 2013 Spring real estate market, its is hard to find any clear indication of where the market is truly heading. For much of 2012, the South Shore real estate market has seen steady increases in the number of transactions over the same months in the previous year. However, the numbers from February of 2013 revealed a drop in sale totals from January 2013 and from February of 2012.

South Shore Real Estate

The median sale price for the entire South Shore in February was $319,000, up 8% from a year before.

The drop in sales totals in February can be attributed to very low inventory. Homeowners seem to be very reluctant to sell and with interest rates edging upwards (although still very low historically) the number of potential home-buyers is quickly rising. The result is the first increase in median home prices the South Shore has seen in a long time. The median sale price for the entire South Shore in February was $319,000. That’s up 8% over February 2012 and up 4.5% over January 2013.
South Shore Real Estate

 

South Shore Murphy Team

 

the average time it is taking to sell a home on the South Shore has been rising since October

You would think that with demand so high and inventory so low that the resulting effect on market time would be positive. However the average time it is taking to sell a home on the South Shore has been rising since October. It’s important to note that this is only the average across all of the South Shore. There are plenty of examples of homes receiving accepted offers within days (and sometimes hours) of being listed. Homes listed under $550,000 in Braintree & Milton are flying off the market if they are in decent condition. Homes requiring updating or homes that aren’t in the most desirable neighborhoods are not as quick to sell and those homes are more directly responsible the rising market time. To put it bluntly, sellers are putting out a lot of low quality homes on the market.

South Shore Real Estate

Finally, one would expect that low supply and high demand would mean that the South Shore real estate market is in a “Sellers Market” but unfortunately (or fortunately for buyers) this isn’t proving to be true… yet. In fact the number of towns that were in a sellers or balanced market in our previous monthly reports is actually slipping. According to our calculations, only 3 towns can claim to be in a sellers market. Quincy, Braintree and Abington. Weymouth had been in a sellers market since October but slipped to a balanced market in February. Marshfield and Hull have slipped from a balanced market in January to buyers markets in February. And the South Shore over all has slipped from a balanced Market in January to a buyers market in February.

South Shore Real Estate

The strength of a real estate market is often described in terms of “Sellers Market” or “Buyers Market.” These market conditions are determined by a simple mathematical concept called absorption rate. Absorption rate is the mathematical representation of the relationship between supply and demand. The total amount of available homes is divided by the total amount of homes sold in previous months. The resulting number represents the number of months it would take to sell the entire inventory of homes in any given area.

A Balanced or “Normal” Market exists when the Absorption Rate is between 5-7 months.
A “Sellers” Market exists when the Absorption Rate is between 1 and 4 months.
A “Buyers” Market exists when the Absorption Rate is over 7 months.

Even though inventory has been low so far in 2013, the spring market will spawn an influx of homes listed for sale. Once that happens and once those homes are consumed by the market, we will have a much clearer picture of South Shore real estate values.

So, round and round it goes, where it will end up …. to be continued.

Disclosures:
The Murphy TeamAll information collected from MLSPIN and reflects only transactions that were listed on Multiple Listing Service. Private sale transactions are not included in this data.

Data only represents single family homes. Condominiums & Multi-Family properties are not included in this data.

The South Shore towns are defined by SimplySouthShore.com as the towns listed here

All information is presumed reliable but is not guaranteed, and should be independently verified. The information provided in this report is provided for personal use only and may not be copied or distributed.

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Category: Real Estate Statistics

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The S3 Team was created by a group of local real estate agents, designers and business partners from Massachusetts South Shore. Trying to tell the story of the South Shore community and striving to connect the world to all the amazing things that make the South Shore great.

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