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:
Banker and Tradesman often publishes a nice list of real estate sales and prices in various Massachusetts counties. This week it was Middlesex county so below are the prices and sales numbers for single family homes by town in Middlesex County for 2008 vs. 2007 from the issue. (Note: If you aren't on this blog directly and can't see the graph below go here to view.)
Ouch. Data just released for November sales in Massachusetts doesn't look good. Although not unexpected, given the economic turmoil preceding the sales, it still is another dagger for the economy overall. Unfortunately after a few month's of somewhat positive looking housing data (two straight month's of sales increases), I would say the financial crisis of September/October is starting to rear its ugly head in the home sales from November. Most of these sales would have been negotiated during that time period, when the nation was completely paralyzed with the fear and lack of credit that we are still trying to work through. Consumers were not buying anything at that time...never mind homes. We'll see how long it takes to shake this downward trend, as the Treasury and Fed continue to pile economic stimulus money into the economy and housing market. Mortgage rates are exceptionally low, and prices are becoming more affordable by the day....so it really comes down to bringing some confidence back to consumers and businesses as we head into 2009.
Continuing the "trend" from September, lower prices are driving more buyers into the Massachusetts real estate market. Inventory is being purchased and taken off the market at a faster clip (at least for single families), theoretically indicating stabilization and a bottom in the state-wide market at some point in the near future (mid 2009 possibly?). Prices probably have a bit further to fall to continue to spur demand so the next few months will be very indicative whether this trend holds even in the face of economic weakness. Unfortunately, but not unexpectedly given the financial turmoil, early indications from looking at "pending sales" (units that have gone under agreement) in October and November look soft. Those are the sales that will become the "sold" data for November and December so I do expect weakness over the winter season. The economy has pushed some buyers back to the sidelines recently, and who can blame them with all the doom and gloom forecasts. So basically, the housing market in Massachusetts looks fundamentally like it could be stabilizing but I expect the economic turmoil to delay the turnaround further.