December monthly sales numbers (and the annual data) have been released for both the state and national markets (I'll be releasing my own Boston condo market report for 2009 shortly too). Here are the facts:
U.S. Real Estate Market
Existing home sales (which includes single family homes and condos) in December fell 16.7% (compared to a booming November 2009*) to a seasonally adjusted rate of 5.45 million sales, which was a bit larger drop than many economists predicted. However, compared to December of 2008, home sales are up 15.0%.
*November sales were way up due to the original end of the $8000 homebuyer tax credit which has since been expanded.
National median price in December 2009 was $178,300,which is 1.5% higher than December 2008. That's the first year over year gain in prices since August 2007.According to Lawrence Yun, National Association of Realtors chief economist:
“It’s significant that home sales remain above year-ago levels, but the market is going through a period of swings driven by the tax credit. We’ll likely have another surge in the spring as home buyers take advantage of the extended and expanded tax credit. By early summer the overall market should benefit from more balanced inventory, and sales are on track to rise again in 2010. However, the job market remains a concern and could dampen the housing recovery – job creation is key to a continued recovery in the second half of the year.”For the year, prices fell 12% to a median of $173,500. Since the peak in the summer of 2006, median prices nationwide are down 23% overall.
Massachusetts Real Estate Market
In Massachusetts, we've seen 6 straight months of increased year over year sales.
Sales of single family homes rose 14.6% in December 2009 (compared to December 2008) while condo sales rose 31.7% compared to a year ago. Both single family and condo sales were down about 22% compared to November 2009 (which itself was sharply up due to the original expiration of the home buyer tax credit).
Median Prices in December 2009 of single family homes and condos were both up 10.9 percent compared to December of 2008. And both were also up compared to November 2009 (single families up 7.0% and condos up 2.4%).
- Single family sales in 2009 were up 4.1% (compared to 2008) and the 2009 single family median price was down 6.8%.
- Condo sales were up 2.1% and the median condo price was down 7.2% in 2009.
The Bottom Line
Overall, on the state and national level, 2009 was a year of increased sales activity but still have falling prices.
If you're in the market to buy, there are some good opportunities out there right now to lock in exceptionally low interest rates and prices (plus the $8000 tax credit) for the long run .
In fact, Forbes Magazine just listed Boston as one of it's Top 10 Cities to go from Renting to Buying:
The premium to buy--the spread between what you'd spend on renting and what you'd pay each month for a mortgage--is far narrower now than its 15-year average. And economists predict a significant home-price hike in five years. So upgrading will cost much less than usual, and home buyers are likely to get a good return on their investment. Note that buying isn't necessarily cheaper than renting in these metro areas. In fact, it often remains a more expensive proposition. But for those determined to own, that investment is a better one now than it normally is.
But to paraphrase James Carville: "Its all about the jobs, stupid." Without job creation the national and state market won't see full stabilization and recovery immediately so don't expect price and equity growth in the short run.
Buy for the long run, not the short term. Simple as that.
As many premier cities are, the downtown Boston condo market is a little different animal, and I'll explore that more in my 2009 Boston condo market report.
2009 Boston Condo Market Report
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