Real estate agents have hopes that the fall season will bring continued sales activity after a brisk spring. This home on Clinton Street in Brookline recently sold for more than $1 million.
Part One of a Two-Part Series
Following a spring that saw home sales hit new records in the Bay State, real estate agents are gearing up for a fall season that they anticipate will bring steady sales activity and price appreciation.
As September nears and summer vacations come to an end, many buyers who temporarily put off house hunting are back again, and homeowners who were considering selling their homes are placing their properties on the market.
Some Realtors are already seeing signs that home sales activity will pick up after the typical slowdown during the summer months, and believe that the presidential election will play a role in home buying and selling this fall.
During the first two weeks of August, a number of new homes were listed for sale in the middle portion of the state and calls from potential clients have increased, according to real estate broker Carolyn Chodat, who serves as the central region vice president of the Massachusetts Association of Realtors.
“I’m anticipating good news for the fall,” said Chodat, owner of Classic Properties in Medway.
Anticipation of brisk fall business is almost inevitable following a second quarter that exceeded the expectations of many local Realtors. Second-quarter sales of single-family homes shot up 19.5 percent compared with the same quarter in 2003, while condo sales jumped a whopping 35.8 percent, according to MAR. Prices also continued to escalate by double-digits.
There were 15,000 single-family home sales from April through June of this year, surpassing the previous second-quarter sales record for single-family homes set in 1999. Second-quarter condo sales reached 5,916 this year, blowing past the existing record set in the second quarter of 2003 when 4,356 units were sold.
Price appreciation also was impressive during those months. The median price for single-family homes climbed 12.5 percent to $343,150, compared to $305,000 during the second quarter last year. Median condo prices were up 13.1 percent, reaching $260,000.
The spring market results were a surprise given the predictions of market watchers earlier this year, who had expected home sales to moderate and prices to appreciate by only about 3 percent to 5 percent this year.
MAR leaders attributed the sales activity to economic expansion, rising consumer confidence and a spike in interest rates in the second quarter which prompted many buyers to consummate deals.
Now, some Realtors are expecting the November presidential election to play an important role in the fall homebuying season. Buyers and sellers, uncertain about the types of housing and economic policies that could be implemented after the election and how they would affect interest rates, may choose to act now and avoid a potential interest rate hike after November, explained Chodat.
“In an election year, we find that the fall selling season is one of the busiest,” said Chodat.
Real estate broker Susan Liberman, of Karp & Liberman Real Estate in Newton, agreed. “The election will play a huge part,” said Liberman. “And so will unemployment.”
As for home prices, some real estate professionals don’t foresee exceptional increases. Ralph Miller, owner of Hughes & Hughes Real Estate Co. in Natick, said he thinks prices will be stagnant throughout the fall, with a possibility of “mild” price appreciation.
“I don’t see any depreciation,” said Miller, whose company serves about 25 towns including Natick, Wellesley, Framingham, Dover and Sherborn. “I don’t see an influx in inventory which would drive prices down.”
Statewide, however, there has been an increase in homes listed for sale, giving buyers more properties from which to choose, according to MAR. The inventory of homes for sale hit a six-year high for the second quarter this spring, MAR recently reported. The monthly average of 42,004 homes available during the second quarter was a 29 percent increase from the same period two years ago. That’s the highest level since the spring of 1998, when an average of 42,175 homes were listed for sale in the state, according to MAR.
No ‘Steals’ for Buyers
But MAR leaders said the increase hasn’t eroded selling prices.
In the Natick area, Miller said inventory levels have been flat, and homes that are coming on the market are selling fairly quickly.
“Prices have moderated over the last 18 months but they’re certainly not depreciating,” said Miller. “[Buyers] are not going to find any steals out there.”
Chodat said she anticipates that brokers will encourage sellers to price their homes reasonably in the fall because properties are taking longer to sell and there are more for-sale homes available. She said she has noticed that asking prices that are much higher than comparative selling prices in the area are being cut more quickly and frequently.
About a third of the 3,977 single-family homes and condos listed for sale in Greater Worcester during the second quarter, for example, had a price reduction, according to information provided by the Multiple Listing Service Property Information Newtork. That’s similar to what happened during last year’s second quarter, when there were 3,560 homes listed in Greater Worcester and 1,279 price cuts were reported.
However, it took fewer days to sell the homes in Greater Worcester during the second quarter of this year compared to a year ago. Homes sold within an average of 43 days between April and June of this year, according to MLS PIN. In comparison, homes listed a year ago took, on average, 69 days – or 26 days longer – to sell.
Concord Realtor Laurie E. Cadigan, who is president-elect of the Greater Boston Association of Realtors, has seen another promising sign of an improving economy. Lately, she has seen some activity in the relocation market, with more out-of-town buyers searching for residences in the area because of new jobs.
In the past year, relocation activity has been slower than prior years because of job cuts, said Cadigan, who works for Barrett & Co. in Concord.
“It’s great if we see the relocation market come back,” she said. “We’re hoping that the job market is improving.”
In Brookline and Newton, Liberman has been working with clients to get their homes prepared before putting them on the market in September. In some cases, her company has asked clients to wait until after Sept. 1 to officially list their homes because during the month of August not only are potential buyers on vacation, but so are many home inspectors, mortgage brokers and lenders.
Some sellers even take their properties off the market in the summer, and re-list them after Labor Day.
“We feel that you would have a greater impact [on] people if it’s a brand new listing, as opposed to lingering on the market for a month in August,” said Liberman. Meanwhile, her company has used the downtime to create brochures and handle other marketing activities to prepare for what, in all likelihood, will be a busy fall home market.
Next week: A look at the fall rental market.
