Massachusetts Home Buyer Guide

Conventional wisdom among many real estate professionals is that Massachusetts home sales have declined for the past few months because of the lack of inventory, but some home buyers may just be fed up with the bidding wars in some communities. 

More home buyers are just refusing to make offers at or significantly over list price when too many list prices already appear overpriced. Home buyers are seeking alternatives, such as buying condominiums over single-family homes and considering cities and towns that have not been swept up in the bidding war hysteria. Home buyers may just be tired of hearing, "All offers due Tuesday by noon."

The median price for Massachusetts single-family homes sold in March increased 8.6 percent to $315,000 compared to $290,000 in March 2013, The Warren Group, publisher of Banker & Tradesman, reported April 23, 2014. 

March marked the 18th consecutive month that monthly median home prices increased year-over-year. The median price in the first quarter increased 7 percent, from $285,000 in Q1 2013 to $305,000 during the first three months of 2014. The Warren Group collects sales and price information from the state's registries of deeds. 

The number of single-family homes sold in Chelmsford, Massachusetts declined in the first two months of 2014 compared to last year.

Through January and February of 2014, there were 34 single-family home sales, a 6.7 percent decrease from the same period in 2013 when there were 37 home sales, according to data compiled by the Massachusetts Association of Realtors.

The median price for a single-family home also declined through February 2014. Through February the median price for a Chelmsford, MA single-family home stood at $325,750, down 6 percent from $346,950 during the same two months in 2013. For the month of February, the median home price was $317,500, a 9.3 percent decrease in price from $350,000 in February of 2013.

Hingham, Massachusetts single-family home sales declined 25 percent from 12 sales in February 2013 to nine home sales in February 2014, according to the data compiled by the Massachusetts Association of Realtors (MAR).

Single-family home sales increased 42.9 percent, from 21 sales in January and February 2013 to 30 home sales through the first two months of this year. There were 262 Hingham, MA single-family home sales in 2013 compared to 256 home sales in 2012. Pending sales – properties with signed purchase and sale agreements but that haven't closed yet – were up 50 percent in February to 21 pending sales from 14 in February 2013.  

Massachusetts single-family home sales declined 5.9 percent in February compared to February 2013, the Massachusetts Association of Realtors (MAR) reported March 25, 2014, citing a lack of inventory as the cause of the slowdown in home sales.

On the other hand, the lack of inventory has put pressure on home prices. The median price for single-family homes sold in February was $294,950, an increase of 7.3 percent from $275,000 in February 2013. February marked the 17th straight monthly year-over-year increase in median price in the Bay State. On a month-to-month basis, February's median price declined 7.8 percent from $320,000 in January 2014.

Massachusetts median home prices increased 9.2 percent in 2013, much more in some sought-after city and towns, but it appears price growth may be slowing in 2014, as higher interest rates and home prices have lessened affordability. 

So who bought homes in Massachusetts in 2013? What was the income of the Massachusetts home buyer? How many were first-time home buyers? How many were married? How many bought single-family homes?

The Massachusetts Association of Realtors (MAR) recently released a report that provides details regarding the profile of Massachusetts buyers and sellers in 2013. The following are some of the highlights relating to Massachusetts home buyers. 

The number of single-family homes in Massachusetts put under agreement, also know as pending home sales, increased 20.4 percent in February compared to February 2013, the Massachusetts Association of Realtors (MAR) reported March 11, 2014. 

The Massachusetts real estate market continued its strong start to 2014. Pending sales in February for both single-family homes and condominiums surpassed the previous year's totals. Pending sales are an indicator of actual home sales for the following 30 to 90 days.   

Massachusetts home buyers know – some all too well – that real estate inventory in the Bay State in 2013 was very low, making it difficult for even those willing to pay top dollar to land a home. It was an especially difficult market for first-time home buyers, who had to compete with many cash-strong investors and move-up buyers. 

Will Massachusetts home buyers face a less frenzied real estate market in 2014? Maybe. 

Despite the number of Massachusetts home buyers scrambling to purchase a home before interest rates increase further, the state's lack of real estate inventory, combined with price increases, has finally slowed down the pace of single-family home sales. 

Massachusetts single-family home sales declined 2 percent in November, the first time year-over-year homes sales decreased since April 2013, The Warren Group, publisher of Banker & Tradesman, reported December 30, 2013.

The Massachusetts real estate recovery continued in October.  

Single-family home sales rose again in October, increasing nearly 19 percent from October 2012, The Warren Group, publisher of Banker & Tradesman, reported November 26, 2013.

While the media and the real estate industry earlier this week trumpeted the fact that single-family home sales reached the highest level since 2006 in May 2013 the more important number for Massachusetts home buyers is the jump in the median price of homes compared to May 2012.

After reports last year about how affordable homes were historically speaking, the Massachusetts real estate market heated up. Now that home prices have increased and mortgage interest rates have begun to rise recently home buyers, especially first-time home buyers, are feeling squeezed in a market still lacking sufficient inventory.  

NEWS ALERT: The Massachusetts Association of Realtors pending sales numbers were not accurate. The post is below. We will update this post or write a new post as soon as the numbers are corrected.  Please see what Banker & Tradesman wrote.