In July, single-family home sales in Massachusetts had the best single month since June 2005.
There were 7,077 single-family sales in July 2015, was a 24.31 percent increase from July 2014. Condominium sales also fared very well; there were 2,794 condo sales statewide, a 20.07 percent increase from last year and the best month since August 2007.
Anthony Lamacchia, owner of Waltham-based Lamacchia Realty, says demand for housing has been strong since the beginning of the year.
“There’s a lot that goes into it: interest rates are low, which increases affordability,” Lamacchia said. “Also, the FHA lowered its up-front fees, Fannie and Freddie are offering 3 percent down loans, the economy is doing better, and more people have more equity in their homes, so they’re able to sell.”
Lamacchia said these and other factors helps strengthen different components of the real estate market and together, the effect is remarkable; he expects the August numbers to also be very impressive. Prices typically follow sales, he said, and he expects prices to rise in the coming months. But, he cautioned, this is not the beginning of another bubble.
“Buyers have more confidence now because they’re more educated than ever, but they still won’t overpay,” Lamacchia said. “Every boom has a bust, but we’re nowhere near that because inventory is still too low, and buyers are more educated now than ever. They’re not willing to overpay.”
Jay Tuli, senior vice president of Arlington-based Leader Bank, said he thinks rising rents and strong employment are the primary factors fueling home sales.
“Rents have gone up so high a lot of people do the math and it makes sense for them to buy,” Tuli said. “More than that, there’s a lot of jobs being created, a lot of people relocating to the Boston area and people who live here are feeling more secure about their jobs.”
Condo sales are strong in part because of the number of Baby Boomers who want to downsize after their kids are grown, coupled with a trend of workers looking to live closer to their work, Lamacchia said.
But it won’t last forever – Lamacchia said when interest rates eventually go up, as expected, the market will cool down a little. He said while it’s too early to make specific predictions for next year, he expects the market to continue to be strong in 2016.
Tuli said that there is a lot of uncertainty in the world that puts downward pressure on long-term interest rates, but if interest rates do go up slightly, it won’t impact the number of sales very much.
“Personally, I don’t think that’s going to be a big impact,” Tuli said. “The biggest factor is employment. If anything, Boston is poised for employment to pick up.”
