We’re back with our February market update. We know it’s the middle of winter, but the market is continuing to heat up. There’s a lot to unpack here, so let’s get started.
What’s Going On While Homes Sales YTD?
It’s been all over the media that inventory is at an all-time low. Let’s break down what exactly that means, starting with New Hampshire. Looking at the city of Nashua, NH, which is one of the largest cities in the state, the inventory results were astonishing. According to the MLS, there were only four single-family homes for sale at the time we pulled the data last week. The story isn’t much different across the rest of New Hampshire. Across the state, inventory is down between 55 and 60 percent from this same date last year. When we take a look at inventory in the state of Massachusetts, we see a similar story. This year we've closed 3,498 single-family homes which are in line with what we saw before the pandemic. In 2019, we closed 3,515 homes so far year to date and in 2020 we had sold 3,531 homes. The difference between those numbers is minimal but where we’re seeing some major differences right now is really in the number of homes that are being listed.
What Are We Seeing With Listings?
In 2019 year-to-date in the state of Massachusetts, we listed 5,345 homes. In 2020, that number dropped to 4,888 and to 3,928 in 2021. Today, the number of homes listed sits at just 3,435. Now, a lot of people begin to wonder if buyer demand is changing and the answer is yes but buyer demand is increasing. This is fueled by some of the things that are happening in the economy and with the media in general. One thing that the media is highlighting is how interest rates are increasing and rightfully so. As of the time of pulling the data last week, the daily rates for an average 30-year home purchase loan are running somewhere between 3.5% and 3.75%, which is up from the 3.25% we saw around this time last year. What that's doing is causing buyers who might be on the fence to hop off. It's causing buyers who are thinking that they're going to buy at any point during 2022 to hurry up and find a home so they can take advantage of those lower interest rates right now before they increase any further.
What Does This Mean For Anyone Looking to Buy
What does this mean in terms of competition? This time last year, we were typically seeing 10-15 offers per single-family home in the greater Boston area. Today, it’s not atypical to see 40+ offers on homes in the greater Boston area. One other factor that comes into play here that anyone buying should keep in mind is affordability. Let’s take a closer look at the average single-family home of both Massachusetts and New Hampshire. In 2019 the average price of homes sold year-to-date was valued at $488,000. In 2020, that climbed to $508,000. The biggest jump happened between 2020 and 2021 when the average price of homes sold year-to-date was $600,000. Today, the average price of homes sold year-to-date is up to $653,000.
One of the things that makes this market a bit tricky for buyers is that when we’re looking at the list prices for homes and we look at the prices of what’s gone under contract, we’re getting a lag of 30 to 45 days. What this means is that while we know that homes are selling for over asking, there's the constant challenge of dealing with lagging data which can inhibit us from having a full understanding of what those homes are actually selling home. That is the challenging part that comes into play with valuing homes for both sellers and buyers right now.
All indicators point to 2022 being another year of appreciation. We predict that month over month, quarter over quarter we're going to find that home values are going to increase.
Data Wrap Up
To wrap things up, let’s take a look at some rolling 12-month statistics. In 2019, there were 71,000 homes for sale during that rolling 12. In 2020, we had 68,0000 and in 2021, we had 61,000. In 2022, our rolling 12 is down to 59,000 homes for sale. Buyer demand is definitely there and there are homes available, it’s just taking us a little bit longer to get those homes onto the market for buyers to take advantage of.
If you’re looking to sell, now is the time! Inventory is extremely low and buyers would love to scoop up your home for the highest possible dollar. If you’re looking to buy, there is still an opportunity out there. Homes will continue to come onto the market and if you’re working with a knowledgeable real estate agent, they’ll be able to help you navigate the current conditions and help you find that perfect home. If you're curious about how these stats might impact your home buying or selling goals reach out to us! We'd love to help.