Massachusetts single-family home sales rose 38 percent in November, the largest year-over-year percentage increase this year and the 11th consecutive month of gains, according to the latest report by The Warren Group, publisher of Banker & Tradesman.
The median price of single-family homes rose almost 2 percent to $275,000 in November, up from $270,000 a year earlier.
November single-family home sales increased to 4,539 from 3,290 during the same month last year. This is the best November for sales since 2005, when there were 4,553 sales statewide. So far this year, 43,652 sales have been recorded, a 22 percent increase from 35,718 sales during the same period in 2011.
“We’re winding down a pretty strong year of real estate in Massachusetts. It looks like sales will be the highest since 2006,” said The Warren Group CEO Timothy M. Warren Jr. “We’re also seeing median prices start to creep up, another positive sign of a healthy market recovery.”
The median price for homes sold January through November was $288,000, down 0.35 percent from $289,000 in the prior year. Meanwhile, both single-family homes and condominiums in the Bay State had the same median price in November: $275,000.
“The popularity of condominiums as an alternative to apartment living has increased their pricing more than single-family homes. Last month we saw the unusual statistic that they have exactly the same median price,” Warren added.
Condominium sales in Massachusetts also increased in November, rising 33 percent from a year earlier. A total of 1,635 condos sold last month, up from 1,232 in November 2011. Year-to-date condo sales are up 27 percent, increasing to 17,765 from 13,971 a year earlier.
The median condo price in November jumped more than 7 percent. The median selling price was $275,000, up from $255,950 a year earlier. The year-to-date median price of condos in the Bay State is $276,000, up 2 percent from $270,000 a year ago.
U.S. builders started work on more homes and apartments last month and requested more permits to build single-family homes. The increases suggest the battered housing market is healing.
The Commerce Department said Wednesday that builders broke ground in April at a seasonally adjusted annual pace of 717,000 homes. That’s a 2.6 percent increase from an upwardly revised March figure and near January’s three-year high of 720,000. Construction rose for both single-family homes and apartments.
Building permits, a gauge of future construction, fell last month from a 3 ½ year high to a seasonally adjusted annual rate of 715,000. But that was because of a 23 percent drop in the volatile apartment category. Permits for single-family homes rose almost 2 percent.
Even with the gains, the rate of construction and the level of permits requested remain roughly half the pace considered healthy. But the increase, along with rising builder confidence and stronger job growth, is a hopeful sign that the home market may finally be starting to recover nearly five years after the housing bubble burst.
“We continue to believe that the bottom has been put in for housing … and while improvement will not be vicious nor rapid, improvement it still will be,” said Dan Greenhaus, chief economic strategist at BTIG, an institutional brokerage.
Builders have grown more confident since last fall, in part because more people have expressed interest in buying a home. In May, builder optimism rose to the highest level in five years, according to the National Association of Home Builders/Wells Fargo builder sentiment index.
Homebuilders reported improving sales and higher traffic from prospective buyers, the survey showed. A gauge measuring confidence in sales over the next six months also increased.
Recent job gains have likely made it easier for more Americans to purchase a home. Employers have added 1 million jobs in the past five months. And unemployment has dropped a full percentage point since August, from 9.1 percent to 8.1 percent in April.
Mortgage rates, meanwhile, have fallen to record lows, making home-buying more affordable. Still, many would-be buyers are having difficulty qualifying for home loans or can’t afford larger down payments required by banks.
Though new homes represent just 20 percent of the overall home market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders.
There are some hurdles to a smooth recovery: Builders are struggling to compete with deeply discounted foreclosures and short sales – when lenders allow homes to be sold for less than what’s owed on the mortgage.
Another reason sales have fallen is that previously occupied homes have become a better deal than new homes. The median price of a new home is about 30 percent higher than the median price for a re-sale. That’s nearly twice the markup typical in a healthy housing market.
Banker and Tradesman posted an exciting article about the rise in home sales in March.
“Sales of single-family homes and condominiums in Massachusetts rose by double-digit percentages in March -marking the strongest first quarter since 2007, according a new report by The Warren Group, publisher of Banker & Tradesman.
Single-family home sales increased nearly 20 percent to 3,205 in March, up from 2,688 in March 2011. Home sales in the first quarter are up 17 percent to 7,964 from 6,802 in last year’s first quarter. This is the third consecutive quarterly increase in Bay State home sales, and the strongest March since 2007 when there were 3,853 sales.” READ MORE.