Strong Sales Drive Home Prices Higher, Inventory Lower During February

BOSTON, March 25, 2015 /PRNewswire/ -- Buyer demand in the local housing market remained historically strong in February as low mortgage rates, less stringent credit standards, and gains in both the labor and stock markets spurred activity during the early winter and holiday period, according to data issued by the Greater Boston Association of REALTORS® (GBAR).

Last month, sales of detached single-family homes rose 5 percent on an annual basis from 520 homes closed last February to 546 in February 2015.  That's the second highest February sales total in the past eight years (matching Feb. 2013 sales) and tenth best on record.  Additionally, it was the eighth busiest February on record for condominium sales, even though closings slipped 1.8 percent over the past 12 months from 450 in February 2014 to 442 this February.  

"Up until the first blizzard in late January, we were enjoying a busier than normal winter season," noted GBAR President David McCarthy, president and broker of Keller-Williams Boston Metro.  "Certainly, the snow and ice made it more difficult to list and show property, but the buyers still kept coming out.  It's the lack of listings more than the weather that was the most frustrating and bigger roadblock to sales during February," he stated.

Indeed, inventory levels remain extremely tight with the number of single-family homes for sale sliding for a thirty-sixth consecutive month in February to their lowest level in more than a dozen years, decreasing nearly 30 percent on an annual basis to just 1,992 homes listed for sale across 57 communities in the GBAR jurisdiction.  Similarly, in the condo market, inventory fell 32.9 percent over the past 12 months to 1,057 units listed for sale.  

The shortage of listings has put upward pressure on prices.  The median selling price for single-family homes increased on an annual basis by 7.9 percent, from $407,450 in February 2014 to $439,500 this February, a new record high price for the month.  The median selling price for condominiums also hit a new record high for the month of February, rising 3.5 percent over the past year from $390,000 last February to $403,568 in February 2015.  Notably, the median selling price for single-family homes has now risen in 28 of the past 29 months, and improved in 23 of the last 24 months for condos.

Not surprisingly, the combination of low inventory and bad weather led to a drop in pending sales, with the number of detached single-family homes placed under agreement declining 7.5 percent over the past 12 months from 795 in February 2014 to 735 this February, and the number of condos put under contract sliding nearly 20 percent from 746 last February to 598 in February 2015.

While the data suggests it's a classic seller's market, the attitude among buyers is upbeat, observed McCarthy.  "They're confident, focused and eager to buy, which bodes well for the spring market once owners are able to ready their homes for sale." 

SOURCE Greater Boston Association of REALTORS(R)

Related Links

http://www.gbar.org