SALEM — A lack of houses to sell seems to have put the brakes on November sales in Massachusetts.
It’s the first time home sales have dropped year-over-year since April, real estate experts say.
The slower November sales were due to rising prices, increasing mortgage interest rates and fewer homes on the market for buyers to pick from.
“With the supply of homes for sale low and prices escalating, we may have reached a turning point where the recovery continues but with less frenzy,” said Timothy Warren, CEO of The Warren Group, in a prepared statement.
“You can’t sell a product if it’s not on the shelf,” said Jim Armstrong, the 2014 president of the North Shore Association of Realtors and owner and founder of Armstrong Field Real Estate on Essex Street in Salem. Armstrong said there was an increase of about 4 percent in prices for single-family homes in December.
You can buy a home in Salem for $325,000 in-move in condition, Armstrong said, but there is little available in the price range under $300,000.
Salem has seen its median home sale price jump 14.5 percent, from $262,000 in November 2012 to $300,000 last month. And there have been 199 homes sold in Witch City year-to-date — a more than 21 percent jump compared with the same 11 months last year, according to The Warren Group.
“Look at any of the open houses we have,” Armstrong said. “The open houses are packed with buyers, much more so than last year.”
Homes that are priced right usually go under agreement “almost immediately,” Armstrong said, with more than one bidder looking to make an offer. It’s the normal supply-and-demand dynamic, which Armstrong said bodes well for real estate prices in the coming year.
“We are not going to see any crazy increases like we did in the early 2000s,” Armstrong said. He said it appears the market is “normal,” except for the lack of houses to sell. Interest rates are also creeping up to about 4.5 percent, putting more pressure on buyers to find just the right home before rates rise.
In Massachusetts, the median single-family home was priced at $316,500 in November, according to the Massachusetts Association of Realtors, which also reports home sales dipped 8.9 percent statewide. The Warren Group, a provider of real estate and financial information, reported a more modest 2 percent drop in sales. Both The Warren Group and the Realtors saw prices rise 4 percent to 7.3 percent, respectively.
Reading the tea leaves of the condominium market is more difficult, however. The Massachusetts Association of Realtors statistics show a nearly 5.8 percent year-over-year drop in November, while The Warren Group says condo sales rose nearly 7 percent.
Prices for condos also increased 3.5 percent in November year-over-year, Realtors said, to $295,000.
Taking a longer view of the market, Bay State home sales were up 6 percent year-to-date, according to The Warren Group.
In Essex County, November year-over-year home sales were up 5.4 percent, The Warren Group says.
The wrinkle right now is the lack of inventory, which is calculated by taking the number of homes up for sale and dividing that by the average number of homes sold each month, Armstrong said.
“It’s still an issue,” Armstrong said about the lack of homes at a time of year when home sales normally slow. “A lot of sellers are underwater; they still owe more than the home is worth.” The increase in prices will help those kinds of sellers.
“It’s been a very good real estate market this year, both in the state and Essex County,” said Tim Curtin, a real estate agent with ReMax Advantage of Beverly. The Essex County real estate housing market had a median sale price in November of $355,000, better than the $316,500 price statewide, Curtin said.
Homes sales in Essex County were up 10 percent year-over-year, said Curtin, citing Multiple Listing Service data. Home prices in the county are up $25,000 over the same month last year.
“It’s tough for buyers right now,” said Curtin, who said the pendulum has swung toward sellers, as buyers face fewer choices and more competition for the scarce homes that are available.
Waiting to buy could be costly.
He gave the example of buyers who are looking for a home in the price range of $500,000 in Marblehead. With a mortgage rate of 4.3 percent, they would pay a mortgage of $2,400 a month. If they wait a year, and rates increase to 5.3 percent, the payment will increase to $2,700.
Staff writer Ethan Forman can be reached at 978-338-2673, by email at email@example.com or on Twitter at @DanverSalemNews.
November North Shore home sales and prices Sales Prices Town Nov. 2012 Nov. 2013 % change Nov. 2012 Nov. 2013 % change Beverly 36 23 -36.11 $357,450 $385,000 7.71 Boxford 8 11 37.5 $530,000 $555,500 4.81 Danvers 22 20 -9.09 $347,500 $346,000 -0.43 Hamilton 3 2 -33.33 $384,500 0 -100 Ipswich 3 7 133.33 $370,000 $442,000 19.46 Marblehead 11 14 27.27 $418,000 553,000 32.30 Middleton 8 6 -25 $536,500 $455,807 -15.04 Peabody 23 28 21.74 $310,000 $321,750 3.79 Salem 17 13 -23.53 $262,000 $300,000 14.5 Swampscott 10 16 60 $411,250 $410,000 0.3 Topsfield 5 7 40 $340,000 $600,000 76.47 Wenham 4 2 50 $387,500 0 -100 Condo sales and prices Beverly 10 12 20 $187,563 $191,500 2.1 Danvers 10 7 -30 $232,550 $165,000 -29.05 Ipswich 3 2 -33.33 $382,000 $0 -100 Marblehead 6 6 0 $297,500 $261,250 -12.81 Middleton 8 3 -62.5 $320,000 $288,000 -10 Peabody 12 13 8.33 $217,000 $125,000 -42.4 Salem 19 28 47.37 $255,000 $230,500 -9.61 Swampscott 3 1 -66.67 $189,000 0 -100 Topsfield 2 4 100 0 $740,851 Wenham 2 2 0 0 0 Source: The Warren Group