The real estate market can sometimes send out confusing signals. Last week newly released monthly data showed a surge in sales of single-family homes in February. But a deeper dive into the data yields a less startling result: the numbers haven’t changed much in the past few years.
And that might not be a bad thing.
The accompanying data by real estate firm Redfin shows how the housing market in the eastern half of Massachusetts performed over the last three years by four key measures. Two in particular are revealing. The average price per square foot for sold homes hasn’t moved much - up or down - in most communities. Some towns saw a modest increase in prices, and a few, largely the expensive highly regarded suburbs, recorded a noticeable bump.
Secondly, the difference between the list price and sale price has remained pretty constant - maybe moving a few percentage points in some towns. Importantly, that ratio remains pretty high, anywhere from 93 percent to 96 percent. The means homes are selling for close to list price, the caveat that the list price is the last one set by the owners before the property was sold, not the original one.
You could look at those results one of two ways: the market is stagnant, or stable. Either way, there is a lot of predictability to the market. With a little homework, buyers and sellers should be able figure out where a particular house is going to sell – excepting those “hot” listings that crop up and create a mania among buyers.
An additional fact not on the charts: Redfin reports that the difference between the original or first listing price, and the sale price is itself narrowing as the market becomes busier. “As prices stabilize, people are not doing this overlisting” on price, said Alex Coon, Redfin’s Boston manager. “More and more people now aren’t charging too much, because it didn’t do them any good. That means it’s a healthier market.”