In its latest economic outlook, NAR released its forecast figures for 2012. In attempting to bring it all right back home to what it means to us, I will compare and contrast these national figures with those here at home.
I have used MLSPIN data including all Boston neighborhoods for this post. MLSPIN groups all Boston neighborhoods together from South Boston to Back Bay to Dorchester and the Waterfront. This broad data representation compares more effectively with broad national and regional data, in other words apples to apples, vs a more micro comparison with core downtown neighborhoods, which I will do in future posts.
NAR projects that new-home sales fell 5.9 percent in 2011 to 303,000, but will rise 16.2 percent in 2012 to 352,000 and jump a whopping 53.4 percent in 2013 to 540,000. National new home sales figures have less to do with our local market in that they represent such a small portion of it, but national and regional new home sales figures do drive attitudes and consumer confidence in general.
Existing-home sales, which we will use as the figure better relating to our marketplace, fell 3.7 percent in 2010 from 2009 to 4.18 million units, according to NAR’s rebenchmarked figures. In 2011, final sales figures are expected to rise 1.7 percent to 4.25 million. In 2012, NAR predicts sales will jump 4.7 percent to 4.45 million with a further 5.2 percent increase to 4.68 million in 2013. The total number of condominiums sold in Boston in 2011 was 3,519, a 5% decrease from 3,713 sold in 2010. The consensus varies for unit sales increases projected for 2012 but an allover 5% increase in units while not a consensus figure seems realistic to me relative to NAR’s 4.7% projected increase.
This year’s median price for new-home sales was an estimated $222,800, a slight 0.8 percent rise from 2010. NAR expects the median will rise 1.9 percent to $227,000 in 2012 followed by a projected 3.3 percent increase to $234,500 in 2013.
NAR expects the median price for existing homes to drop 4.4 in 2011 to $165,200. Nevertheless, NAR predicts prices will subsequently rise 2 percent in 2012 to $168,500 and another 2 percent in 2013 to $171,800. Median price for condos sold in Boston in 2011 was $380,000, a 3% increase over $369,000 in 2010. The average sale price in Boston for condominiums in 2011 was $535,000 a 3% increase from $520,000 in 2010.
For the first time, NAR forecasts rent inflation, predicting rents have risen 2 percent from 2010 this year and will rise 3 percent and 3.5 percent, respectively, in 2012 and 2013. We will hear more on this from Briggs Johnson my rental contributor in future posts.