JUDY MOORE
‘Level playing field’
Sellers of luxury homes in the Bay State have surely learned the virtue of patience this year, as homes priced $1 million or higher took almost a month longer to sell during the first half of 2003, compared to a year ago.
It took an average of 116 days, or almost four months, for single-family homes priced $1 million or more to sell during the first half of the year, according to information provided by the Multiple Listing Service-Property Information Network.
Homes in the same price range during the first half of 2002 sold after an average of 96 days on the market, or 20 days faster, according to MLS-PIN.
“It’s a buyer’s market. In the upper price ranges, it definitely is,” said Brigitte Senkler, a real estate agent with Coldwell Banker Residential Brokerage in Concord.
Sales of homes priced $1.5 million and higher have slowed in towns like Lexington, Concord, Carlisle, Lincoln and Weston, according to Senkler. But a flurry of activity since mid-May, with several $3 million home sales in Concord, and even a $6 million home sale, have been an encouraging sign, said Senkler.
Still, Senkler said homes have to be “priced correctly” to sell mainly because homebuyers are no longer relying on hefty stock portfolios to purchase a home. Instead, buyers have returned to the “fundamentals,” according to Senkler, which means they’re considering their annual earnings and checking to see how much equity they have in their current home and how much of a mortgage for which they can qualify.
“People are much more discerning before they spend money,” said Senkler, who noted that there have been a number of price reductions this year. “They’re scrutinizing homes much more carefully.”
Shifting Market
Despite taking longer to sell, more homes priced $1 million or higher sold during the first six months of the year compared to a year ago. Some 438 single-family homes in that price range sold this year in Massachusetts, up 5.5 percent from the 415 units in the same price range that sold a year ago, according to MLS-PIN. MLS-PIN, the largest multiple listing service in New England, includes sales transactions in most of the Bay State but generally excludes those in the Berkshires and on Cape Cod and the Islands.
In contrast, fewer condos priced over $1 million sold this year. Forty-seven condo units priced $1 million or higher sold during the first two quarters, taking an average of 126 days to sell, down from the 59 unit sales that sold almost two weeks faster during the first half of 2002.
Despite the rise in marketing time, some real estate sources maintain that four months is still considered a pretty short time to sell such high-end properties, which typically take longer to sell than more moderately priced homes anyway.
“It’s still very good because there were times when we wouldn’t consider taking any listings under six months. It would easily take us six months to nine months to sell a property,” said Carolyn Chodat, broker owner of Classic Properties in Medway.
Meanwhile, single-family homes priced $300,000 to $500,000, and even homes priced $600,000 to $800,000, sold two to seven days faster this year. For example, it took an average of 80 days to sell a home priced between $600,000 to $700,000 this year, whereas last year during the same months a home in that price range spent an average of 87 days on the market. Homes listed for $700,000 to $800,000 sold after an average of 85 days during the first two quarters of the year vs. 90 the prior year.
Overall single-family home sales in Massachusetts dropped during the first two quarters compared to the same period in 2002. Some 18,656 single-family homes traded hands from the first of the year through June 30 – an 11 percent drop from the 20,705 single-family homes recorded during the same months a year ago, according to statistics from MLS-PIN. The median selling price for single-family homes climbed to $310,000, up 10.7 percent from $279,900 last year.
Realtors are blaming the sales slide on rough winter weather, a rainy spring and the war with Iraq.
Today, homebuyers have more homes to choose from, as the inventory of for-sale homes has gradually built up.
There was a seven-and-a-half months’ supply of inventory as of May 2003, when there were 31,588 active listings of detached single-family homes, according to the Massachusetts Association of Realtors. That represents a 24 percent increase from the 25,435 listings as of last May, or 5.6 months’ worth of inventory. Meanwhile, there was a 6.9 months supply of condominiums in May, which translates into 10,588 active listings. That was 42 percent higher than the 7,423 active condo listings in May last year, which represented 5.2 months’ worth of inventory. June inventory numbers were unavailable as of last week.
The real estate industry considers an eight-to-nine months’ supply of homes as a balanced market, and anything 10 months or higher as an excess supply. An excessive supply of for-sale homes signifies the market is more favorable to homebuyers. Five to six months’ worth of inventory is considered as a condition characterizing a seller’s market.
The build-up of inventory of for-sale homes coupled with the lowest mortgage interest rates in years has been good news for homebuyers. “As of May, there was a bit of a jump in inventory making it a better opportunity for buyers to find that house they’ve been looking for,” said Judy Moore, a Lexington Realtor who is president-elect of MAR.
While the low interest rates and the higher number of available for-sale homes is favorable for buyers, Moore said she wouldn’t label it a buyer’s market.
“If anything, we’re getting more of a level playing field. I wouldn’t say we’re at a buyer’s market,” she said
Home sellers, however, are recognizing that the market has shifted and “are learning to listen to the advice of their Realtors and pricing housing more realistically,” said Moore.
