Information on Home Buying & Selling, and state of the real estate market in Salem and the entire north shore of Massachusetts including Beverly, Peabody, Lynn, Danvers, Middleton, Ipswich, Hamilton, Wenham, Essex, Rowley, Manchester-by-the-Sea, Newburyport, Plum Island, Amesbury, Groveland, Georgetown, Haverhill, Merrimac, Andover, Etc.
Wednesday, January 04, 2012
The North Shore Massachusetts Real Estate Market in 2012
Where is real estate going in 2012?
I know everyone gets confused by all the real estate news that
you read about almost every day with each report contradicting the other. Each author usually has an ultimate agenda when writing an article. Those who make their living in real estate try to paint a good (or not so bad) picture of the market because they want to encourage people to buy or sell a home. On the other hand the typical reporter working for a newspaper wants to attract viewers to his/her article, and nothing does that better than doom and gloom - bubble bursting, rising foreclosures, etc. When reading these articles, if you are interested in what is happening with your north shore home's value, or want to know if now is a good time to buy in Massachusetts, then ignore all the national statistics. What is happening in Nevada, Michigan or Florida has almost no bearing on the local market here in Massachusetts.
Trulia.com, a leading internet real estate company, has come
out with its top five places slated for a quicker recovery. They are Austin, Houston, San Jose, Boston, and Rochester, NY.
The Boston area
is home to the technology belt with lots of smart, well-educated
people. Highly educated, tech-savvy cities tend to push through the
recovery quicker than other parts of the country. 2011 brought a stabilization
of prices on the north shore, with the average home selling for $386,251,
statistically insignificant from the average of $390,794 in 2010. Even though I
predict it will be a robust year, watch for stable prices in 2012 as more
foreclosures coming on the market, holding down any valuation increases.
Right now we currently have 5.7 months supply of single
family homes on the market. A normal market is considered to have 5 to 6 months
worth of inventory, so we are approaching something close to "normality".
The average days on market (DOM) for sold single family homes last year was 137
days. I would like to see the days on market below 125 before I feel we
are back to a normal market. During the last few years the DOM has been between
125 and 140, while during the "Home Rush" of 2000-2005 it was just 71
to 93 days. Back 15 years ago in 1997, which was what could be could a
"normal" year, the average DOM was 102 days.
The total number of homes sold, down slightly last year over 2010,
will increase as interest rates stay at record lows, unemployment continues to
drop and job security increases, and home affordability remains the
highest in decades. Buyers will step off the sidelines and into home ownership
as consumer confidence returns and realize that owning is now less expensive
than renting on the north shore