More Inventory for Buyers! - Massachusetts Real Estate Market Update
YOUR Massachusetts Real Estate Market Update for the week of October 9th
Who would have thought the condo market would be this strong… Plus, we are almost at an inflection point for inventory levels in the Single Family market.
In this video we will go over the Single-Family and condo markets in the state of Massachusetts. We will also do an interest rate update and talk about how Student Loan Repayments could help our inflationary woes.
Hi I am Jeff Chubb – A recovering Investment Banker turned Real Estate Agent that has sold more than a 1,000 homes. If you have any questions about the real estate market, then know I am here to help.
I am working with some sellers at a higher price point. There haven’t been any recent sales in their price range which means that we haven’t lost any buyers to our competition.
Rather than a price reduction, the sellers and I decided to offer another type of incentive. We did what is called a 2-1 buydown. It was stunning to see how many agents called and asked for an explanation as to what it is. It’s great that they called, but it was a stunning realization as to how many inexperienced agents are out there. Make sure you interview your agent… It’s the difference between you getting a good value on a house or over paying.
But so you are in the know… There are many folks who are utilizing 2-1 or 3-2-1 buydowns in order to get a lower rate for the time period that it is thought that we would have higher rates in. Their thought is that they would then refinance once rates drop.
So let’s say today's rate is 8%. A 2-1 buydown means that in year one the interest rate would be 6% and in year 2 it would be 7% with year 3 through 30 being the original rate at 8%.
A 3-2-1 rate is very similar, except the term is for three years and not two. So with the same example of an 8% rate today then that means in year one the rate would be 5%, year 2 it would be 6%, year 3 it would be 7% and then an 8% interest rate for year 4 through 30.
It’s a great product and could make more sense to have a seller provide a buydown credit then reduce the price of the house.
Let’s get into it all and jump into the Single-Family market stats.
Another weekly high set for inventory this week! There are currently 4,588 single family homes on the market in the state of Massachusetts. This is a 117 unit jump in available single family homes from last week with our inventory levels being 7.5% higher than they were 28 days ago.
Last week we talked about the Fall inventory level pullback and when it was going to start. My belief was that we were going to run until the end of October until we started to see a drawdown in our inventory levels. And another week of data in the books and that likelihood is beginning to look more realistic.
This excess inventory is great news for buyers. I know interest rates are up, but a buyer today is able to find some good value in the marketplace. Not everywhere on every property, but there are definitely some good values out there.
The inventory gap tightened again this week. We now have 847 fewer houses on the market (update this number in the graph) than this time last year.
But look at how close our inventory levels are to 2021. There is a very good chance that we could see inventory levels cross the levels of 2021 next year. There are only 122 fewer houses on the market today then at the same time in 2021.
There is little doubt that our inventory levels are catching up to the levels of last year. And the next two graphs visually help demonstrate why and how.
There were 925 Single Family homes that came on the market this week. Yes, this was a pullback from the 983 houses that we saw come on the market last week, but new listing activity was only off by 3.7% compared to the same time last year when 960 Single Family homes came on the market.
The 4 week rolling average is 1,070 units. We are below that average, but it’s because the amount of new listings each week will start to pull back as we begin to close out 2023.
We had 828 homes go under agreement which was 11% less than the same week last year when 930 single family homes went under agreement.
As I said earlier, you can really visually see the inventory growth makes sense when you see the graph for new listings that is pretty much in line with 2022 and then you look at the under agreements that have a sizeable delta between the two years.
This 11% is an improvement from the last couple weeks as we had seen a 16%, 17% and 15% decrease in the amount of homes that went under agreement. I guess that is the silver lining that we can point to.
The four week rolling average is 873 units. So we were below those levels, but just like new listings… We will see the pending numbers steadily decrease as we close out the year.
So when compared to last year's market… New listings were off by 3.5% while under agreements were off by 11%. That difference of 8.5% is why we are seeing inventory growth year over year.
There were 470 Single Family homes that closed last week for an average sales price of $852 thousand dollars and a median sales price of $636 thousand dollars. Sales levels compared to the same week last year were down by 13.9% as there were 546 Single Family homes that sold.
Months of inventory. This is how we determine what type of market we are in. 0 to 5 months is considered a sellers’ market with the closer to 0 you get… The more aggressive a seller’s market.
This week Months of inventory stayed steady at 1.48 months as last week's number was 1.42 months. The 1.48 months this week is compared to the 1.38 months this week last year. It’s still a great market for a seller… But the market is finicky… Some houses are selling quickly while others are sitting.
Real quick, here is my shameless plug… I just wanted to mention that if you are thinking about buying or selling a home, then it would be a true pleasure to help!
Now onto the Condo market…
We have 2,526 condos on the market as of Monday. Inventory is up by a whole 32 units this week! While it’s a small increment this week, it makes inventory up 8% in the last 28 days.
The inventory gap tightened again this week after an unexpected 10 unit increase last week. We currently have 263 fewer condos on the market than we did at the same time last year and 431 fewer units than the same time in 2021.
If you haven’t already, you should check out my monthly market report that I published last week… Because the condo market is STRONG right now…
There were 408 condos that came on the market with a four week rolling average of 547 condos. Look at that chart… We have pretty much been toe to toe with the amount of new listings since the middle of August.
We actually listed more condos this week than we did the same week last year. The 408 condos this week is compared to the 386 last year or 5.7% more.
Last couple weeks we have been .8% and 2.2% short of the year prior levels and now 5.7% more condos.
Not to be outdone by new listings, we actually put an additional 4 units under agreement then we did the same time last year as there were 374 condos that went pending this week.
The four week rolling average is 381 units so we were pretty much right on point there.
So 5.7% more listings coming on the market when compared to this week last year while selling 1.1% more condos as well. A couple weeks ago I mentioned how I felt our condo market conditions were on par with the conditions we saw last year… Here is a little more proof to that narrative.
There were 177 condos that sold this week for an average sales price of $571 thousand dollars and a median sales price of $460,000 thousand dollars. This same week last year there were 176 condos that sold. So sales levels were off by .6%.
Months of Inventory ticked down slightly to 1.97 months from last week’s 1.98 months.
Time to talk about Interest rates…
Another rough week for interest rates. We aren’t playing with 8% anymore. Most loans originated today are over 8%. If you are a prime buyer, then you might be below that threshold… But think again if you are prime buyer and looking at Jumbo Loans!
Not for nothing, but we have been talking about how interest rates were going to be in the 8% range this Fall since July of this year. I had someone comment the other day that interest rates can’t go up any higher because it’s mathematically impossible. If that’s your belief, then you really need to look at how interest rates are interpreted. Mortgage rates are tied to the 10 year treasury note. The 10 year treasury note and its yield is tied to market situations, specifically inflationary pressures. It has nothing to do with mathematics and the higher interest rates making houses unaffordable.
Okay, we are going to fly through a bunch of artciles here because they are all connected. Think of it as a 1 plus 1 plus 1 equals 3 type scenario. You need to see the entire field to be able to figure out whats next.
Check this out. 84% of CEOs expect a recession in 2024. ZERO percent of FED staff feel that we will go into a recession. Keep in mind it was the FED geniuses that put us in this mess as they told the world and acted out the fairy tale that inflation was all transitory.
And how about this one… Chapter 11 filings by businesses soar 61% so far this year… The year isn’t over. Bankruptcy’s generally are not a good thing for employment. I will point out that a large amount of the bankruptcy’s tend to be centered around retail.
Oh, speaking of retail… How about this one? The Consumer just crashed: Credit card spending unexpectedly craters in September. That happened in September. Was it consumers getting ready to make student loan payments that pulled them back or was it something else like consumers have already maxed out their credit cards and just have no more room to manuveur…
And one more… I have seen some championing the job report as some amazing numbers. Read into the data and you will see that 885,000 full time jobs were lost while 1.127 million part time jobs were created. I am not the smartest guy in the room, but I am thinking that full time jobs are better than part time jobs… And stats like that do not show a strong and robust economy.
Oh and here is a bonus. No more rate hikes this year by the FED… Because the private market is already doing it for them. Have you seen treasury yields lately?!? Plus Fannie Mae’s Chief economist saying that his BASE scenario is that the FED starts reducing rates at the end of 2024.
Want to talk about your personal real estate needs? You can also Click Here to view all Quincy Homes For Sale .
Whether you are looking to buy in the next 9 or 90 days, then I would love to chat with you and find out about your real estate goals.
VIDEO EDITOR NOTES: A pop up that says: How much is your house worth? Go to CHTValue.com And if you are thinking about possibly selling, then we can help you traditionally or even offer you a cash offer on your house for a seamless and stress free sales process. No matter what your situation, we can help you get it done.
VIDEO EDITOR NOTES: Pop up of YouTubeRealEstateAgent.com (please don’t cut to the site where you are inputting info. Just have it be the website link popping up for them to visit. You can also visit YouTubeRealEstateAgent.com and fill in your info then I will reach out to you!
Questions or comments about the market data?
Drop me a line in the comments section below. You take the time to watch the video, so I will always take the time to answer.
So until next time.