Real Estate Market Getting More Competitive
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BOSTON (CBS) – The state’s resilient housing market continued to show signs of recovery in March, as buyers chased discounted prices and posted the eighth consecutive month of single-family home sale increases.
“I’m excited about what’s happening,” Karl Case, co-creator of the Standard & Poor’s Case-Shiller Index told the BBJ.
“Over the last six months there have been lots of positive numbers: housing starts are up, inventories are down, first-time and speculative buying is on the rise.”
Agents sold 2,791 single-family homes last month, an 18.4 percent increase from the 2,357 homes sold during the same month last year, according to the MLS Property Information Network, New England’s largest MLS listing service.
Amid the selling frenzy in one of the warmest March months in memory, the median selling price for single-family home fell to $267,000, down from $275,000 one year ago, a 2.9 percent drop.
More than half of the homes sold were priced from $50,000 to $299,999, a sign that buyers are taking advantage of some of the lowest prices in years.
But Case dismissed any suggestion lower median prices equals lower home values.
He said the median represents the middle price of what’s selling and most sales are for homes that are well under $300,000. MLS lists sales by price range in $50,000 increments. The block in which the most homes sold was $250,000-to-$299,000, with 401 transactions within that range.
Home values in Greater Boston are up, Case said. From January 2000 to January 2012, the Case-Shiller index for Boston increased by 47.9 percent. The data is based on multiple sales of the same homes. “Boston continues to be one of the bright spots,” he said. “If the number of sales continues to increase, eventually median prices will rise.”
Condo sales also increased last month to 1,103 units, up from 1,039 in March 2011, a 6.1 percent hike. Condominium median selling prices rose by 6.2 percent to $249,500, up from to $234,000 one year ago.
One of the factors for surging sales is low interest rates. The average rate for a 30-year, fixed-rate mortgage in March was 3.95 percent, according to mortgage buyer Freddie Mac. But economists there warn that mortgage rates are forecast to gradually increase throughout the year to about 4.5 percent, a factor that is bringing potential buyers off the sidelines.
The agency’s Economic and Housing Market Outlook for March found signs that the housing market is awakening from its depression-like condition of the past few years and beginning, though slowly, to make a recovery.
The report said economists expect jobs to grow this year and will drive the unemployment rate below 8.3 percent.
With stronger economic growth, home sales and originations forecasts have been revised upward, Freddie Mac said.
“A variety of encouraging indicators suggest that the housing market may be feeling a nascent recovery, and more neighborhoods may see a stabilization in overall demand and housing values this spring,” said Frank Nothaft , Freddie Mac’s vice president and chief economist.
Lisa van der Pool of the Boston Business Journal can be seen weekdays at 6 a.m. on WBZ-TV.
You can follow Lisa on Twitter at @lvanderpool.