Last year was a good one in the Massachusetts housing market. Prices rose steadily (and some locations, substantially), closing out the year with an increase of nearly 3 percent. The number of sales grew considerably, ending up 10.5 percent.
January’s numbers saw a slight dip in the sales price of 0.48 percent – that’s $1,550, if you’re keeping track – and the number of sales was up a whopping 25 percent, the highest number sales for January since 2005, according to The Warren Group, publisher of Banker & Tradesman.
Most of those purchases need to be financed, which made for a good year for the state’s lenders. This week’s issue features the annual Top Lenders section, The Warren Group’s ranking of banks, credit unions and mortgage companies by number of loans and total volume. Still feeling the effects of a low interest rate environment, the state’s lenders nevertheless exceeded their 2014 numbers – to be expected, as there were so many more transactions in 2015.
Leader Bank took the top spot for residential loans by banks by both number and volume. With $666 million in single-family loans and $260 million for condominiums, Leader’s lending department was busy last year.
In Laura Alix’s story, Vice President Jay Tuli attributes a lot of that growth to hard work, of course, but also to the bank’s geography. Based in Arlington with locations in Cambridge, Burlington and Boston’s Seaport District, it is surrounded by some of the area’s hottest housing markets. It’s also well positioned in up-and-coming commercial areas, life science hubs and the Innovation District, where Eastern Massachusetts’ job market is taking off. Continued job growth fueled demand for housing, Tuli said.
Elsewhere in this issue you’ll find Scott Van Voorhis’ musings on the state of the housing market. He notes that some of the area’s most desirable towns saw sales and median prices drop in 2015 versus 2014, in some cases quite significantly. Several of his sources say they anticipate the market cooling, though potentially not until after this spring’s selling season. Buyers will eventually shy from exorbitant prices and bidding wars, and the market will reflect that, they say.
With just one month of closed sales in 2016, there are many factors at play. Last year’s devastating winter delayed the start of the spring market; this year, many closings that would have been in December were pushed to January due to the implementation of the TILA-RESPA Integrated Disclosure regulations. Both factors contributed to the enormous jump in homes sold in the first month of the year – and neither provide a clear indication of what will happen as the year progresses.
Barring catastrophe, the Bay State’s job growth this year is projected to continue to grow – at least in the Bay area. Those workers will all need to live somewhere, and once they get over the sticker shock, they’re likely to do whatever it takes to buy here. Constricted construction of new homes and lack of inventory will continue to contribute to the problem – and prices will continue to climb.
