Although the stock market remains strong with the Dow once again reaching above 11,000 last week, the real direction of the economy is not immediately clear.
According to the Massachusetts Association of Realtors, pending sales for Bay State single-family homes fell 19 percent in September 2010 when compared with September 2009. “Concerns over the economy and unemployment continued to keep a number of potential home buyers on the sidelines as homes put under agreement went down compared to the same time last year when buyers were trying to qualify for the initial home buyer tax credit deadline,” association president Kevin Sears said in a statement. “While the market still favors the buyer and interest rates remain historically low, confidence in the market plays a significant factor even for the most qualified buyers when it comes to purchasing a home.”
In September, 3,609 single-family homes were put under agreement compared with 4,473 homes in the same month a year ago, the Massachusetts Association of Realtors said. September 2010 was the fifth straight month that year-over-year pending sales have gone down.
In other news, a recent Boston Globe article indicated that the Massachusetts economy is growing faster than the nation as a whole, but the recovery remains fragile, uneven and vulnerable to faltering national conditions, according to analysis by leading local economists.
On the positive side, Massachusetts employment over the past few months has expanded at the fastest rate in decades, according to the analysis released by the University of Massachusetts. National and international demand for technology products has driven the state’s growth, the analysis said, boosting Massachusetts equipment manufacturers and other tech-related sectors such as computer systems design and consulting.
On the other hand, a struggling national economy threatens to undermine this demand, putting the recovery in Massachusetts at risk, according to the analysis. Last month, for example, the nation shed jobs for the fourth consecutive month as private sector gains were too weak to offset steep cuts in government employment.
As always, our focus here at Precision Properties and Hawthorn Investmentsis to review how this confounding market data is affecting the local housing market. Unlike in greater Massachusetts, the market here in Needham appears to remain very stable with continued demand in all price ranges throughout the local market.
For example (per MLS data), from April 2010 to October 2010 there were 205 homes that sold in Needham. The average sale price (in this time period) was $811,000 while the total sales volume was $167,000,000. This compares favorably to the same period in 2009 when there were 173 sales at an average price of $750,000 and total sales volume was $130,000,000. The average days on market over the two periods is now slightly higher – from 84 in 2010 to 78 in 2009.
Per MLS data, there are currently 134 homes for sale in Needham. The average listing price is $1,100,000 and the average days on market is creeping higher, now at 128. We are seeing a trend of more higher priced homes hitting the market inNeedham, which is pushing the average listing price and days on market higher; this is because homes priced at the upper end of the market typically take longer to sell.
In order to understand how the market will perform for the rest of the year, we have reviewed last year’s activity. To finish the year, there were 61 homes that sold in Needham from October 2009 – December 2009. Based on this historical data, it would not be surprising to see some of the homes in the currentNeedham inventory (134 homes are currently for sale) to languish on the market until the upcoming Spring buying season. Therefore, we are predicting that some buyers in Needham may find themselves in relatively good position, especially if a motivated seller is not able to ride out the 2010 – 2011 Winter market.
You can follow the Needham real estate market on our Needham page, which includes updated 2010 sales data. Or if you have any questions, please contact us.