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Mass Home Prices Jump 14%


Mass. home prices jump 14%

By Jenifer B. McKim

MAY 29, 2013


The median price for single-family homes in Massachusetts rose to $313,000 in April, a near 14 percent increase compared to the same time last year as increased buyer demand and a tight housing inventory pushed up home values, new data released Wednesday shows.

April marked the seventh month in a row of rising home prices, according to the Warren Group, a Boston company that tracks local real estate. Between January and April, the median selling price climbed to $294,000, an 11 percent jump compared to the same time last year, according to Warren.

The steep price increase comes as home sales decline. Single-family home sales dropped to 3,504 in April, about 1 percent less than the same time in 2012.

”There is high demand and low inventory this spring, which is causing this pattern of rising prices and dropping sales volume,” said Timothy M. Warren Jr., chief executive of The Warren Group. “Low mortgage rates and steady home values are helping buoy consumer confidence.”

Tight inventory, however, did not hinder sales of condominiums, which climbed more than 8 percent in April compared to the same time last year, the Warren Group reported. Median prices for condos rose to $280,000, a near 1 percent jump compared to April, 2012.

Housing specialists worry that if more sellers don’t come to the table, the housing market could sputter. Inventory of single-family homes in April fell 27.1 percent compared to the same time last year, according to the Massachusetts Association of Realtors, which also released data Wednesday. The number of condos for sale fell 32.4 percent last month, compared to the same time last year.

Providing some relief, new listings for both condos and single-family homes rose in the double digits in April.

“With home prices improving, sellers are finally gaining the confidence they need to list their home,” said association president Kimberly Allard-Moccia, owner of Century 21 Professionals in Braintree. “This should help move us closer to a more balanced market.”

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$1M Plus Market In Provincetown. A Spring Preview

The $1,000,000 market in Provincetown is solid and active. In 2012 16 properties sold above $1M, 15 single family homes and 1 condo. These represent 7% of the total 218 condos and single family homes sold in 2012. As you can see below, these range in style, size and of course location. The average sales price was $1.575M, had 4 bedrooms and 3.25 baths with 2,250 square feet of living space. (6 of these properties are shown below.)


5 Telegraph Hill $1.15M
5 Telegraph Hill $2.15M
781 Commercial St $2.275M
781 Commercial St $2.275M
6 Winston Ave $1.8M
6 Winston Ave $1.8M








3 Atlantic Ave $1.065M
3 Atlantic Ave $1.065M
29 Commercial St $2.925M
29 Commercial St $2.925M
79 Commercial St $1.55M
79 Commercial St $1.55M








There are currently 157 condos and single family homes on the market, 31 of which are priced at $1M +, representing 23% of the available inventory. The average property above $1M is  asking $1.869M, has 4 bedrooms and 4.5 baths, with 2,763 square feet of living space. Of these available properties 32 are single family homes and 4 are condos. (6 of those properties are shown below)

58 Franklin St $1.059M
58 Franklin St $1.059M
29 Tremont St $1.195M
29 Tremont St $1.195M
8 Telegraph HIll $3.195M
8 Telegraph HIll $3.195M








10 R Commercial St 1.995M
10 R Commercial St 1.995M
21 Bradford St Ext #16 $1.249M
21 Bradford St Ext #16 $1.249M
75 Franklin St $1.349M
75 Franklin St $1.349M









2013 looks to be as strong or stronger. So far 7 properties have sold, 6 single family homes and 1 condo, and 4 properties are currently under contract. Considering the strong summer fall selling season is still to come this is good news for the $1M + market. (6 of the 7 properties that have sold so far this year are shown below)


7 Miller Hill $1.2M
7 Miller Hill $1.2M
13 Pilgrim Hts Rd $1.235M
13 Pilgrim Hts Rd $1.235M
7 Pleasant St $1.024M
7 Pleasant St $1.045M








53 Harry Kemp Way $1.075M
53 Harry Kemp Way $1.075M
9 Creek Rnd Hill $1.6M
9 Creek Rnd Hill $1.6M
572 Commercial St $2.265M
572 Commercial St $2.265M








In many markets the “high-end” or above $1M market is the most visible market. The same is true here in Provincetown. The trophy homes, the big waterfront properties, the East End and West End compounds all draw interest and gossip. But interestingly enough many of these homes are wonderful family and year round properties, very accessible and in fact well priced for the amount of house you get.

The interesting numbers are 7% and 23%. While available properties for sale above $1M represent 23% of the total, only 7% of the properties sold in 2012 were sold above $1M. what does this mean? That while the $1M + market is viable and strong, lots of properties do take a while to sell. We need to remember that the second home market in whatever price point we are talking about is not as fast paced and dramatic as the primary home market. For many this means a more relaxed buying and selling process for others it is frustrating.  Where do you fit?

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Shadow Demand Outweighs Shadow Inventory

Very interesting post from Mike Simonsen at Altos Research. In essence he is saying that buyers who held back buying in a sluggish economy are now entering the market in a time of low inventory, creating additional demand, which becomes hard to satisfy.

Real Estate Shadow Demand Outweighs its Shadow Inventory


Quit your yapping about how strong the real estate market is, Simonsen. It’s a fake rally. There is no actual demand.

That’s the bearish argument I’ve been hearing lately. I’m not buying it.

For years we’ve been watching the phenomenon of “Shadow Inventory” of potential homes that need to be sold, and looking for impact on the market. This set of underwater or distressed properties is now shrinking rapidly.  The number of homes with underwater mortgages fell by nearly two million last year. According to the Fed, home price gains of 10% will be enough to move 40% of underwater borrowers back above water. These home sellers are highly likely to buy another home in the same or comparable market, off setting new supply with new demand.

Meanwhile another phenomenon that emerged from the bubble burst has been developing, and it’s hit the market with full force. Shadow Demand. Demand for homes that went unsatisfied, primarily due to financial and economic uncertainty, that can now emerge as jobs recover and mortgages remain cheap.

Housing’s Shadow Demand

Let’s look at the source of new demand. Increased demand for housing comes from new “households.”

household formation

Cumulative Household formation surpluss/defecit relative to 5 year average (millions). Source: Federal Reserve Bank, Altos ResearchFrom 1997 through 2007, each year an average of 1.3 million new households were formed per year. Our population grows via immigration and kids maturing. These people need to  rent or buy homes, or they double up with friends and family. During the Great Recession, household formation was closer to 600,000 per year. Population growth continued at about the same pace but people didn’t move into homes of their own.  That means for the three years of 2008, 2009, 2010 we had “Shadow Demand” forming around 2 million potential homes that can’t wait to launch on their own.

In the chart above, you can see that households get formed during times of economic strength. People hide when the economy is bad.

Household formation in the five years of the housing bust was lower than any five year period since the 1960s.  This is the Shadow Demand and it’s now hitting the real estate market. These millions of potential buyers were waiting until they were financially stable and until the bargains arrived. In 2012, these conditions converged. In 2013 employment and recovery is stronger. Real estate demand is higher.

Despite all the risks in the US and global economies, the 2012 real estate market’s demand is a function of years of pent up purchases. After years of historic lows, this demand trends seems poised for a multi-year recovery.


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Are 2013 Forecasts Too Low?

Here is a great article by Mike Simonsen of Altos Research.


Why Forecasts for the 2013 Housing Market are Too Low

MARCH  2013


I’m in Washington DC to talk to the National Association of Business Economics on the state of the housing market. I ran into Lawrence Yun, the chief economist for the National Association of Realtors and he mentioned that he just raised his forecast for 2013 from 4% year over year to 7-8%. That’s pretty bullish. Yun, of course, takes a lot of flack for being an industry cheerleader rather than objective. So he should be bullish, right? I told him he’s still too low.

The logic is this: in 2012 US Housing Prices climbed between 5 and 12%, depending on which measure you choose.  The Case-Shiller Index climbed 6.8% year over year at the end of 2012. Here in 1Q 2013, all the leading indicators are stronger than they were a year ago. (For those of you just tuning in, this is the third in a series of “home prices are stronger than you think” posts from me this winter.)

Contact Altos if you want details on the our housing market data.

2012 (December) 2013 Forecast
Altos Research 7.9% 10%
CoreLogic 6.8% 6%
NAR 11.5% 8%
Clear Capital 4.9% 5%

Note that all these measures, except for Altos, focus on the closed transactions. They are, by definition, lagging. It makes sense that, in an accelerating market, the Altos number is going to hit it’s high several months before the others do.

The always-lucid Bill McBride at CalculatedRisk saw homes prices rise in 2012 but anticipates a slowdown in 2013, though he doesn’t say why.


US Home Prices 2012Composite Prices. Single Family Homes. Altos 20-city (national) composite. Data as of February 22, 2013. Source: Altos Research

If you observe that home prices rose at x% last year and that the conditions (low supply, high demand) that created that rise are stronger this year, it’s reasonable that your models should indicate stronger price appreciation this year. Don’t be surprised when 2013 turns out to be another roaring year for home prices.


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Towns Rush Past Their 2005 Peak Values!

WOW!!!  Interesting post by Scott on

Posted by Scott Van Voorhis

South End Heli Shot

OK, I guess the rich towns just keep getting richer.

Home values in Cambridge, Arlington and Brookline have all shot past their peaks reached during the bubble yearsZillow finds in its latest quarterly report.

The median home value in Cambridge (yes trolls, I know, it’s a city, was using “town” loosely) is now $463,000, a level last seen back in 2005, one of the bubbliest years on record. That’s compared to $453,000 in April, 2005.

Brookline last fall blew past its 2005 price peak of $502,000, with the median home value having skyrocketed over the past five months to just under $530,000, according to Zillow, whose home value index blends both prices of homes sold with assessed values of homes that are not on the market. (Basically, it’s a measurement of the value of all homes in the market, not just a compendium of sale prices.)

Arlington is back as well, with a median home value of $475,000 – higher than Cambridge.

That’s compared to Arlington’s bubble years’ peak of $463,000 reached back in October, 2005, Zillow reports.

Meanwhile, other local cities and towns are on target to equal and then pass their 2005 peaks over the next year.

Boston’s median home value is $372,900, a single percent below peak, while Newton, at $714,400, is just two percent off, Somerville, at $381,400, is within striking distance, at 5 percent below its last peak.

Ready to party? What’s the value of your home?


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Core Logic Acquires Case-Shiller

Interesting development. The Case-Shiller guys regularly updated Boston realtors throughout my career in Boston. Nice to hear that they will now have an even broader platform.

by  in Economic News

CoreLogic revenue up, acquires Case-Shiller

The first quarter results are in, and CoreLogic not only reports revenues up by 10.9 percent, operating income is up 22.2 percent and their full-year common share repurchase target has been raised from 3 to 5 million shares. With healthy revenues, the company also unveiled that they have acquired Case-Shiller from Fiserv, Inc. for roughly $6.0 million.

Case-Shiller has long been one of the most widely accepted economic indicators in real estate, strengthening CoreLogic’s role as what they call a “leading residential property information, analytics and services provider.” The acquisition close don March 20, 2013 and was announced this week with the first quarter CoreLogic earnings results.

CoreLogic says they will continue to offer its CoreLogic Home Price Index (HPI), which they say “represents the most geographically comprehensive and current set of home price indexes available.”

What each will be called, how they will operate

The Case-Shiller Indexes will be renamed the CoreLogic Case-Shiller Indexes and the S&P/Case-Shiller Home Price Indices will retain their brand name. The CoreLogic HPI and the Case-Shiller Indexes are complementary measures of home price trends utilizing the same baseline methodology of repeat home sales.

Dr. David Stiff, Chief Economist for Case-Shiller, will continue to supervise the preparation of the CoreLogic Case-Shiller Indexes and comment on the findings of those indexes while Dr. Mark Fleming, Chief Economist for CoreLogic, will continue to supervise the preparation of the CoreLogic HPI reports and comment on the findings of those reports.

The company notes that the CoreLogic Case-Shiller Indexes offer over 6,000 indexes covering states, counties, metros and ZIP codes across the U.S., and 30 year home price forecasts for all indexes which are used to track residential real estate trends, manage price risk, value loan portfolios, estimate default probabilities and loss severity within specific markets, and to determine firm capital sufficiency.

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Inching Towards Normal

Interesting post from Inman. “56% of the way back to normal”.  I’ll examine in a future post relative to our local markets.(Cute barometer.)

Trulia: Housing market inching closer to normal

3 key indicators 56% of the way back to pre-bubble levels
Inman News

Inman News Staff Writer
Apr 23, 2013
Trulia housing barometer.

The housing market continued to trudge towards a recovery in March, with rising construction starts and falling foreclosure and delinquency rates bringing market conditions closer to those of a balanced one, according to Trulia’s Housing Barometer.

The barometer summarizes three key housing market indicators — construction starts, existing home sales, and the delinquency-plus-foreclosure rate — looking at how current conditions compare to those recorded at the depths of the housing crisis and those recorded before the housing bubble.

Trulia noted that while existing home sales dipped slightly from February to March, they were up 10 percent from a year ago. Residential construction posted a 47 percent annual gain in March, and the share of mortgages in delinquency or foreclosure fell to 9.96 percent, down a full percentage point from the same time last year.

As a result, Trulia’s Housing Barometer puts the housing market at 56 percent of the way back to normal in March, compared to 54 percent in February and 33 percent a year ago.

This month’s improvement is even better than it looks, said Trulia Chief Economist Jed Kolko, because of a shift of sales from distressed to conventional and early signs that the inventory crunch may be easing, which would bring some relief to would-be homebuyers.

– See more at:

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Strong Q1 Performance In Downtown Boston

Great news on the downtown Boston market. A repost of Jenifer’s article below:

Downtown prices hit record median value of $537,000


By Jenifer B. McKim


     MAY 01, 2013Boston’s downtown condominium market thrived during the first three months of the year, with tight inventory helping to push the median price to a quarterly record of $537,000, data to be released Wednesday show.

First-quarter sales of downtown condos totaled 505, marking an 8.4 percent sales increase compared with the same time last year and the highest number of sales since 2007, according to the Boston company LINK, which tracks the market.

The median sale price of $537,000 was 7.4 percent higher than during the first three months of 2012, LINK reported. The second-highest quarterly watermark was in the fourth quarter of 2012 when the median price hit $525,000, said Debra Taylor Blair, LINK president.

“Sales are up and appreciation is up,” Taylor Blair said.

The numbers reflect what many in the real estate industry have been saying for months: Prospective buyers are fighting for available homes, pushing up prices, and causing bidding wars in the city’s more popular neighborhoods.

<br /><br /><br /><br /><br /><br /><br /><br /><br /><br /><br />

‘Buyer demandis still very high. Right now, anything under $2 million is very, very, very active.’

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The city’s luxury condos — which include concierge and valet services among other amenities — appear to be even more more coveted.

The median sale price for luxury condos rose to $1.4 million during the first three months of 2013, a 22.7 percent increase compared with the same time last year, LINK said.

In the first quarter, 59 luxury condos were sold, 28.3 percent more than during the same period in 2012. In contrast, just 11 luxury condos sold during the first quarter of 2009, the report shows.

Taylor Blair said Wednesday’s report includes a new LINK definition of luxury buildings — it only includes properties that offer deeded parking or a valet service and are valued at more than $650 per square foot. The change effectively boosts the average and median home prices in the luxury market in comparison with past reports.

She said the decision was largely made because a parking spot can increase the price of a home by $80,000 to more than $200,000.

“When they hear the word ‘luxury,’ they assume luxury means, ‘I have a place to park my car,’ ” Taylor Blair said.

LINK also limits its report to 12 Boston neighborhoods, including the Back Bay, Beacon Hill, the Fenway, and South Boston. It excludes sales in Jamaica Plain, Allston, Roxbury, and Mattapan, among other areas.

Boston’s downtown condo market was largely unscathed by the national housing decline that started in 2005.

But the higher-cost area was affected by the 2008 economic crisis, which slowed sales and depressed prices.

Now, the relatively small number of homes on the market — combined with low mortgage rates and an improving economy — is causing prices to rise. There were only 291 downtown condo units for sale in March compared with 693 in March 2012, according to LINK.

“We have a lot of disappointed buyers,” said Ken Tutunjian, senior vice president for Coldwell Banker Residential Brokerage on Newbury Street. “Buyer demand is still very high. Right now, anything under $2 million is very, very, very active.”

John Ranco, a senior sales associate at Hammond Residential Real Estate in the South End, said more people are listing their homes for sale, but don’t expect them to be on the market for long.

“Between now and July is when we see the best selection,” he said.

Another report released Tuesday added to growing evidence that the US housing industry is improving.

The S&P/Case-Shiller Home Price Indices showed the value of a single-family home in the Boston area increased by 5.2 percent in February compared with that month last year.

Nationwide, home values increased even more in February — by 9.3 percent — in the 20 cities covered by Case-Shiller, which tracks repeat home sales. It was the second month in a row that all 20 cities showed price increases compared with the year before, Case-Shiller reported.

“Housing continues to be one of the brighter spots in the economy,’’ said David M. Blitzer, chairman of the index committee at S&P Dow Jones Indices.

Jenifer B. McKim can be reached at [email protected]. Follow her on Twitter @jbmckim.