Hawthorn Builders, at the start of 2013, began to feel a shift in the real estate market with an increase in demand for new construction in Needham. More specifically we saw a significant rise in interest for our new home for sale at 60 Parker Road. In addition, we began to see the inflation of land prices as we searched for new projects. As it turns out, the shifting market in Needham was part of a greater movement in the housing sector. Inventories in several Boston area towns now remain at historically low levels. Low inventory levels along with seemingly never ending low interest rates has been the catalyst for extremely tight market conditions, which has introduced pent up buyer demand in the market.
Comparing housing data in Needham for the first half of 2012 to 2013 confirms this shift in the market. The overall average days on market for a home selling is lower this year by 30 days, the average sales price is up from $780,000 to $890,000 and the overall market volume is up from $87 to $93 million. This improvement in the Needham market has occurred with ten less houses selling in the first half of 2013. Despite a lower inventory level overall, there were ten more houses selling in Needham at the “new construction” price point from $1,000,000 – $1,500,000. On the other hand, there were eight less homes selling this year at the $500,000 – $600,000 price level, which is the historical range for a “tear down” in Needham.
All of this has ultimately attracted bidding wars for land and rising prices. As we finish the current Spring market, it appears that strong market conditions in Needham will persist given still low inventory levels. In addition, the summer does not typically provide for an influx of new properties for sale. Since demand remains strong, unless there is an unforeseen change in market fundamentals, we expect that demand will continue to outweigh supply at least though the rest of this year and that the market will continue to see rising prices.