Posted on Jan. 6th, 2013
The Bay State was a problematic place to buy a new home in 2013 – the home inventory was very low and even those who were willing to pay couldn’t find a real estate easily. It was even harder when they had to compete with big investors or experienced byers. As we enter 2014, the question is if we will see a better inventory in Massachusetts this year.
If we look back to the beginning of 2013, you may remember the reasons why a lot of good homes got multiple offers the moment they hit the market – the record low interest rates of the mortgages and the historically low prices of the real estates. The buyers seized the opportunity and even decided to forget about the indispensable contingencies like, for example, home inspections.
A lot of people forget that there is another factor – 2012 was good year for the real estate market and a lot of homes were sold. According to The Warren Group, 18% more single-family homes were sold in 2012 in comparison to 2011 – the highest rate since year 2006. The condominium sales, on the other hand, were 25% more – the best ‘result’ since year 2008.
It happened so that the buyers of new homes in 2012 left no excess for those looking for homes in 2013. According to the Massachusetts Association of Realtors (MAR), the single-family homes’ inventory lowered on a monthly rate with 14% on the average, while the same factor for condominiums showed 27% drop.
There was another factor worth mentioning – according to The Warrant Group, the foreclosures declined in 2013. To speak more precisely, from January to September 2013 the foreclosure deeds dropped with 63%, while the foreclosure petitions were 70% less.
According to the last MAR report (30 Dec. 2013), the single-family houses inventory decreased with 20.6|% from November 2012 (23,213 homes) to November 2013 (18,428). This means 5.9 months of supply in Nov 2012 compared to 4.3 in Nov 2013 (5.2 in Oct 2013). According to MAR, the last November was the 21st straight decreases month. However, there are signs that the inventory may become better for home buyers this year.
It appears that the listings of single-family houses added in November (3,954) were 7.9% compared to November 2012 (3,663). The same goes for the listings in October 2013 (5,975) compared to the same month last year (5,378), which means 10.9% increase.
The case with the condominiums is different: November 2013 saw inventory of 4,925 homes, while last year the eleventh month came with 27.7% more – 6,813 homes. In other words, this year we have 2.8 months of supply, which contrasts with the 4.4 last year and the 3.5 in October.
On the other hand, the listings of condominiums increased with 3.5% in November 2013 (1,375) compared to the same period last year (1,328). We also see an increase of 17.7% in October 2013 listings (2,153) compared to October last year (1,829).
All this increases considered, it seems that there will be more homes in Massachusetts for buyers to consider. This is a good news for the prices, too – more listings mean lower prices. If you are considering to buy new home, even if this will be your first time, this year is the right time.