Time to Buy: MA and NC Home Sales Sky Rocket
However, if you’re a realtor in Massachusetts and other select markets around the country such as Charlotte, you have reason to celebrate.
Edmond “Chip” Poli, President and CEO of Poli Mortgage Group says:
"Certain East Coast markets are stronger than others. Massachusetts and North Carolina for instance, are doing much better than other areas of the country. These markets have a feel and an attitude of optimism again. We haven't seen this level of optimism in the purchase market since 2005"
Massachusetts single family home sales spiked to levels that haven’t been seen in two years. According to The Warren Group; Massachusetts single-family home sales in the month of June 2012 were 5,495, this is an increase of 26% over June 2011.
Sales of condominiums were way up as well with sales of 2,216 units in June, this is a 29% increase over June 2011.
Downtown Boston condo sales prices actually reached record high levels in the second quarter of 2012 according to real estate tracking firm, LINK.
Charlotte, NC has experienced 5 straight months of gains in both total sales and sales price per unit. In June 2012 the Charlotte Metro area moved 1,238 total homes.
In June 2012, Mecklenburg County area 4 enjoyed a 43% increase over last year.
Why Are Sales Improving?
The average cost of a single-family home has remained stagnant over the last two years. This is great for a buyer and it keeps some sellers out of the market as they wait for prices to rise before putting their homes on the market.
The total number of single-family homes on the market in MA, according to the Massachusetts Association of Realtors, is 29,663 listings, this is down 17% from last year. Condominium supply is tightening even more with total inventory dipping 28% from just last June.
This supply v demand ratio in MA, is creating a stronger condo market and condominium prices enjoyed an increase of over 6% to an average sales price of $313,000.
Over the last five years developers and builders have been in a shell as sales were nonexistent and the housing market was in a state of chaos. Developers sat on land and builders forgot what the word “spec” meant, as they only built homes once they were pre-sold to a strong buyer.
This lack of activity in new supply is finally catching up to the market and this is most likely going to continue as financing to build speculative housing has not returned, nor does it appear it will return any time soon.
Even as builder and developer financing has remained dry, residential lending has been robust with interest rates hovering at record low levels. Chip Poli on the overall lending environment:
"The reasons are pretty simple. Interest rates are at record lows, home values are still down from a historic perspective and our dedication to customer service and great rates, has bolstered our referral and Realtor relationships. We're seeing stronger numbers than even the statewide statistics will show and this proves that our unique business model is incredibly effective."
The Perfect Storm of Recovery
It is easy to become overly optimistic when comparing numbers year over year that are essentially coming from periods that will go down in history as some of the darkest ever, for real estate markets.
However, it is important to note that the June 2012 sales numbers are the highest since June 2010 and in June 2010 the market had a very significant boost from the First Time Home Buyer Tax Credit, which expired later that year.
The 2012 numbers do not have that boost from an unnatural source, these June numbers are far more natural because they do not have that tax incentive bolstering the market.
Single-family home sales are still approximately 28% below the record levels of 2004. Normalization in the market has yet to arrive but, things certainly are looking up, way up.
The next few months will be key for the housing market as interest rates sit at record low levels and the average sales price remains very attractive for home buyers.
Now is the time to buy a home, we may not see a confluence of events like this ever again.