Posted on Aug. 15th, 2014
It’s been over six years since the housing crash and economists are still trying to determine what’s going on with the housing market. While the Bay State home prices haven’t quite made it back to their highest yet, they’re definitely getting closer. According to a report from the Warren Group, (publisher of Banker and Tradesman), the median price of a home in Massachusetts at the time of this writing is close to $360,000, this is after a 2.8% jump in June. You have to go all the way back to the height of the real estate bubble to find a higher price with the median price of homes back in June 2006 coming in at $350,000.
As home prices rise, so do seller expectations and the median asking price in June hit $371,150 in Boston and home sales managed to rebound in June as well. Sales of single family homes rose 3.8% June, to $371,150, the highest it’s been in June since 2006. This volatile storm of home sales should lessen market slowdown concerns that were triggered by a string of less than satisfying sales reports in recent months. More good news is that condo sales are also smoking hot, surging by as much as 11% in June in comparison to June 2013 while the median price reached $325,000, a rise of 1.6%.
For sale, as well as open house signs have been showing up all over the Boston area and if this was April or May this factor wouldn’t be all that surprising because they’re months that have always been good for home sales. The fact is its summer time, which is typically not a popular time for new listings to hit the market or hold open houses. Sure, the most recent reports back up this historical evidence, with the amount of homes for sale finally beginning to rise after a long drought period. Now, following years of sitting on the fence, sellers are listing their properties in the hopes of finding a buyer while prices are still on the rise and the market is sizzling. Having said that, while they may not realize it yet, home sellers are listing their homes just as the market begins to shift. The good news is that it’s still a seller’s market, particularly in the Cambridge – downtown Boston area, especially in the pricier inner suburbs, however there’s a great deal of real estate beyond 128.
Home sales all over the United States have been faltering for several months now after a year long listing shortage that kept prices on the rise; but here’s the rub. Even though the market may be weakening, seller expectations are not. As a matter of fact, sellers still believe that they just might win the real estate lotto, optimistic due in part to the widespread home price inflation that’s been prevalent over the last couple of years according to a Keller Williams study. An estimated 40% of potential home sellers surveyed by the company in May stated that they planned on listing their homes above market value.
Whether or not today’s sellers are deluded when it comes to their home’s selling price potential is yet to be seen, but it makes sense when you consider how difficult it is to think objectively about the value of your home, a home you’ve become attached to. It’s also easy to be deluded in the Boston area, because just about everybody pays a small fortune for homes in the area.
Even if the sellers haven’t caught up with the shifting market, Real Estate agents have. Keller Williams reports that less than a 1/4 of their brokers throughout the country agreed with the declaration that home sellers today have all the power, a number that’s dropped from 35% at the beginning of the year.