Home and Condo Sales Rose in April
After declining during each of the two previous months due to low inventory levels and several late winter storms that slowed home buyer activity, single-family home sales rebounded in April. Sales of detached single-family homes rose 4 percent on an annual basis to 773 detached homes sold in April 2013, the highest sales total for the month in three years (dating back to April 2010 when the federal home buyer tax credit was available and 822 homes were sold) and the second most home sales for the month of April since the most recent housing boom ended in 2005. Historically, the 773 homes sold in April 2013 is the eighth highest sales total for the month of April on record in Greater Boston.
Significant pent-up demand for housing, especially among entry-level and trade-down buyers, combined with a steadily improving labor market, record low mortgage rates, and rising home values have helped to drive strong buyer activity early this spring and should result in solid gains in home sales for much of the rest of this year.
The monthly median selling price for detached single-family homes increased for a seventh consecutive month in April, rising 13 1/2 percent on an annual basis to $475,000. It’s the largest percentage increase in the monthly median selling price on an annual basis in three years, dating back to April 2010 when the median selling price jumped 13.9 percent from the same month the previous year. Additionally, this marks the first time since May – November 2010 that the single-family median home selling price has risen for seven consecutive months.
Notably, the median selling price for detached single-family homes is now at its highest level in eight months, dating back to August 2012 when the median price reached $490,000. The spike in the median selling price along with the sharp jump in the median price over the past 12 months can be attributed to today’s tight supply of homes for sale which is increasingly producing competitive multiple offer situations that help to drive up home prices, as well as a measureable increase in sales of homes priced at or above $1 million, which rose by more than one-quarter (27%) over the past year (from 78 in April 2012 to 99 in April 2013).
On the condominium side, sales rose in April for a sixteenth consecutive month on annual basis, increasing a healthy 6 percent from the same month one year ago. A total of 804 condo units were sold in April 2013, which is well off the record sales pace for the month of 956 units sold in April 2005, but still the most for the month in three years, and the fifth highest sales total on record for the month of April in Greater Boston, surpassed only by April 2005 (956), April 2004 (892), April 2007 (823), and April 2010 (806).
Demand for condos remains strong, especially among suburban empty-nesters looking to purchase in Boston, as well as with investors, and renters looking to become first-time homeowners, but a shortage of condominiums for sale has resulted in fewer opportunities to buy and put upward pressure on prices which is holding back even healthier activity.
After experiencing just the second decline in the monthly median selling price in five quarters in February, the median selling price for condominiums increased on an annual basis for a second consecutive month in April, climbing nearly 5 percent to $389,000. Although April’s median selling price reflects a drop of 4 percent from the prior month, it is important to note the median selling price for condos hit a new record high in March of $405,500.
Accordingly, confidence among buyers in the local housing market remains strong. Evidence of this can be seen in the ratio of original list price to sales price sellers are receiving for their units which improved steadily over the past 12 months to a record high 98.8 percent in April. This tops the previous return of 98 percent of original list price observed during the peak of the last housing boom in June 2005.
While April’s median price of $389,000 is down a modest 4 percent from the record median price set earlier this year, it is worth noting that it has improved 44 percent from the lowest median selling price reported in the recent market correction, which occurred in January 2009 when the monthly median price bottomed out at $270,000.
To access monthly data by community, check out our Local Market Update reports, and our Monthly Market Indicator Reports for comprehensive regional housing market data for the GBAR/GBREB jurisdiction.