July Marks Another Strong Month for the Greater Boston Real Estate Market
After a modest decline in June, sales of detached single-family homes rebounded sharply in July, increasing by 16 percent (or over 200 units) on an annual basis to reach a new record high sales volume for the month. A total of 1,485 single-family homes were sold in July 2013, up from 1,279 in July 2012 and a nine-year high for the month which tops the previous July sales record of 1,473 closed transactions set in July 2004.
The strong sales growth in July over year ago levels is due in part to the rise in mortgage rates this spring, which has provided a strong incentive for buyers to act before interest rates climb further. In addition, buyer demand has remained steady throughout this summer (more so than in recent years), as those frustrated on having lost out in multiple offer situations have continued their home search beyond the traditional spring selling season. As a result, we’ve seen no measurable drop in buyer interest and stronger than normal sales activity this July. In fact, sales on a month-to-month basis were virtually unchanged, slipping by just a half dozen units or 0.4 percent from an upwardly revised 1,491 homes closed in June.
The inventory of single-family homes for sale remains well below year ago levels, declining on an annual basis by 34 percent in July. This marks the twenty-first time in the past 22 months that the number of homes on the market has dropped from the same month one year earlier, and 12 consecutive months in which the inventory of homes for sale has decreased 30 percent or more from the comparable month the previous year. There were nearly 1,400 fewer homes on the market this July compared to the same month in 2012, and with just 2,615 homes for sale it’s the fewest number of detached single-family homes for sale in the month of July in over a decade.
Following a modest 4 percent decrease in condo sales in June, which marked the first annual decline in condo market activity in 18 months, sales volume surged in July, climbing 18.6 percent over the past 12 months to 1,236 units closed in July 2013. It’s the largest percentage increase in monthly condo sales on an annual basis since January, when sales rose 22 percent from January 2012. In addition, from a historical perspective, last month’s sales total is the second best sales total on record for the month of July in Greater Boston, surpassed only by July 2005 when 1,269 condos sold.
As was the case in the detached single-family home market, sales of condominium remained essentially stable on a month-to-month basis in July, slipping just 0.6 percent, or seven units, from June.
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. However a shortage of condos for sale is constraining sales activity and creating upward pressure on prices as buyers compete for a limited supply of listings.
With buyer demand steady and inventory extremely low, sellers are benefitting. This is evident from the ratio of original list price to sales price property owners are receiving for their units, which improved steadily over the past 12 months to a new record high of 99.9 percent in July. This figure mirrors the 99.7 percent list price-to-selling price ratio earned during June and 99.4 percent list price-to-selling price ratio observed in May of this year, and also tops the previous peak return of 98 percent of original list price achieved in June 2005 during last decade’s housing boom.
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.