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Boston Area Housing Market Takes a Breather in November

Sales of detached single-family homes fell for the first time in five months during November, declining 12 percent over the past 12 months from a robust 902 homes sold last November to 793 in November 2013.  It’s just the fourth time this year sales volume has declined on an annual basis, and is the largest decrease on a year-to-year basis since sales dropped 13.2 percent in June 2011 from the same month one year earlier.

Additionally, on a month-to-month basis detached single-family home sales declined 8.2 percent in November from an upwardly revised 864 homes sold in October. 

The drop in sales can be attributed to a softening in buyer demand associated with the uptick in mortgage rates this fall, as well as anxiety among consumers caused by the federal government shutdown which led some buyers to retreat from the market.  Despite the decrease in sales activity, last month’s sales total is the tied for the ninth highest on record (with November 2005) in Greater Boston for the month of November.

The monthly median selling price for detached single-family homes increased for a fourteenth consecutive month, improving 6.4 percent on an annual basis to $475,000.  It’s the first time since November 2004 – December 2005 that the single-family median home selling price has risen for such an extended period.  Notably, last month’s median selling price equals the highest on record for November, matching the median price for homes sold in November 2005. 

The latest data demonstrates the upward pressure being put on home prices as buyers compete for a limited supply of homes for sale.  In fact, November marks the ninth consecutive month in which the ratio of original listing price to sales price received by sellers has been at or above 95 percent.  On a month-to-month basis, the median price also rose modestly by 1.7 percent from an upwardly revised $467,000 in October.  At present, the median price of $475,000 in November has rebounded 35.7 percent from March 2009, when values bottomed out at $350,000 during the recession. 

Similar to the single-family home market, condo sales declined in November for the first time since June, slipping 7.4 percent over year ago levels to 701 units closed in November 2013.  It’s just the second time since January 2012 that condo sales decreased on an annual basis, and represents the largest percentage drop in sales volume on a year-to-year basis since June 2011 when sales fell 15.1 percent from the same month the previous year.   

Sales activity also decreased on a month-to-month basis by a slightly greater amount, sliding 8 percent from an upwardly revised 762 condos sold in October.   Nonetheless, in spite of the drop in sales volume, it was the fourth most active November on record for condo sales, topped only by November 2009 (818 sales), November 2004 (761 sales), November 2012 (757 sales).

The median selling price for condominiums increased on an annual basis for a ninth consecutive month in November, improving nearly 8 percent over the past year to $410,000.  The last time the median price rose for nine straight months on a year-to-year basis was April 2012 – January 2013.  In fact, the median selling price for condos has only declined twice on an annual basis during the past two years, in January 2012 when it slipped 1.4 percent and February 2013 went it slid 5.2 percent from the comparable month a year earlier.  

Notably, last month’s median selling price establishes a new record for the month of November, eclipsing the previous peak price set a year ago when the median price was $380,000 in November 2012.  November’s median price also ranks as the fourth highest monthly median selling price ever recorded for any month in Greater Boston. 

With buyer demand still healthy 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 from 96.2 percent last November to 98.8 percent in November 2013.  This marks the eighth consecutive month in which the listing price-to-selling price ratio for condos has hit 98 percent or higher, a level not seen since June 2005 during the housing boom of the last decade. 

As of last month, the median selling price remains up 52 percent from the lowest median selling price reported in the last market correction which occurred in January 2009 when the monthly median price bottomed out at $270,000.

Looking ahead to the new year, this week Zillow issued a forecast that places Boston as one of the top 10 housing markets for 2014.

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.