As Home Prices Increase, Massachusetts Home Buyers Act Quickly

Eighteen months ago Massachusetts home buyers did not need be too concerned with whether a home for sale they visited would be available to make an offer on the next day or even the next week. How times have changed. 

A new home listing in Holliston, MA that a Buyers Brokers Only, LLC client wanted to see yesterday went under agreement in about three hours on Thursday. Not three days, but it went under agreement in about three hours. Stories like the one above have frustrated home buyers in Massachusetts over the past few months.

Why are Massachusetts homes selling so quickly? The Bay State's lack of real estate inventory is the reason. 

The Massachusetts Association of REALTORS (MAR) reported May 14, 2013 that more pending single-family home sales were reported in April 2013 than in any month since January 2004, the month MAR began tracking pending home sales data. Condo sales are hot too. While not an all-time high, condominium pending sales hit the second highest point since data has been collected by MAR.

Pending condo and home sales figures, also referred to as homes "under agreement," are a leading indicator of actual housing sales in Massachusetts for the following 30 to 90 days. Not every home under agreement will ultimately close in that time frame. A few may not close at all. A pending sale or a sale under agreement is when a home buyer and home seller agree on the terms of the sale of a home and have a signed purchase and sale agreement, but have yet to close on the transaction.   

MAR President Kimberly Allard-Moccia, broker-owner of Century 21 Professionals in Braintree said, “While the activity is positive, we need more homes on the market to make sure prices don’t spike up too quickly, and as a result, push people out of the market because of the high cost of homes.

The number of single-family homes put under agreement in April increased 32.8 percent compared to the same time last year, jumping from 4,478 homes in 2012 to 5,948 homes in 2013. April 2013 marked the biggest monthly year-over-year increase since April 2010, the final month to take advantage of the home buyer tax credit. On a month-to-month basis, single-family homes put under agreement were up 38 percent compared to 4,308 homes put under agreement in March 2013.

The number of condos put under agreement in April increased 37.4 percent compared to April 2012, rising from 1,772 units in 2012 to 2,435 units in 2013. April marked the most condos to go under agreement since March 2005 when there 2,501 units that went under agreement. On a month-to-month basis, condos put under agreement increased 29 percent from 1,888 units in March 2013.