Home sales likely to stay strong this fall
Meggin and TJ Kelly are ready to move. With two young children, dreams of a third, and a home-based Web development business, the couple just needs more room.
They have a four-bedroom Colonial in Ashburnham under agreement and have put their North Andover three-bedroom on the market. Now, they are waiting, hoping a pickup in real estate activity this fall brings a buyer their way.
“I don’t know what to expect,” TJ Kelly said.
If real estate industry specialists are correct, the Kelly family could be in luck. Agents and analysts predict a sustained seller’s market, as eager buyers flock to take advantage of more homes getting put up for sale and interest rates that remain near historic lows.
House hunters, meanwhile, can expect to face some stiff competition for any well-priced property. “Any time something comes up with a pretty reasonable price, it’s usually grabbed pretty quickly,” said Ryan Schruender, a real estate agent in North Andover.
After a disappointing 2014, when sales declined slightly from the previous years, real estate agents are optimistic about the fall market, largely because of strong sales in the spring and early summer. In July, the latest month for which data is available, single-family home sales in the state rose at their fastest pace in a decade, jumping more than 24 percent from a year earlier, according to the Warren Group, a Boston real estate tracking firm.
Sales rose in every county but Nantucket, soaring about 40 percent in Essex, Hampden, and Worcester counties. Sales prices have edged up, too. The state median price for a single-family home rose 1.4 percent in July, to $359,900 from $355,000 in 2014. June’s median price of $365,000 was the highest in the state since 2007.
“The overall picture is very strong,” said Cassidy Murphy, editorial director for the Warren Group. “It remains to be seen whether the momentum will keep up for the rest of the year. I tend to think it will.”
The rebound in sales has come as more sellers put homes on the market — new listings rose 7 percent in July, according to the Massachusetts Association of Realtors — but inventories remain tight as demand in many communities exceeds supply. Buyers still face fierce competition and higher prices, particularly in markets close to Boston
For example, in Stoneham, convenient to Route 93 and just 10 miles north of the city, sales through the first seven months of the year were up 10 percent over the same period in 2014, while the median price jumped 15.4 percent to $450,000, according to the Warren Group.
“Close proximity to Boston just continues to be a real motivating factor for young families,” said Donna Frano, an agent with Jack Conway Real Estate in Pembroke.
For some buyers, the answer to bidding wars and high prices is to increase the distance from Boston. The Kellys for example, first looked for a new home in North Andover, about 25 miles from Boston right up Route 93, but found the houses they liked cost nearly double the price of a comparable property in Ashburnham, 55 miles from Boston
Their new home has 2,000 square feet of living space and more than two acres of land, a combination that would cost well over $600,000 in North Andover, TJ Kelly said. In Ashburnham, the asking price was below $370,000.
“I grew up here and I am sad to be leaving,” he said. “We can’t afford a house in North Andover that will be the size we need for our family.”
But there is some good news for buyers. Real estate agents expect prices to moderate as more people put homes up for sale and the burst of buyers who came out after the brutal winter diminishes. A house today is more likely to get three offers close to the asking price rather than the 10 offers $10,000 above asking a few months ago, said Deborah Heffernan, owner of Avenue 3 Real Estate in Cambridge.
“There was a lot of urgency and desperation,” Heffernan said. “I don’t think the sentiment is quite the same.”
Mortgage rates also remain very low. The average rate on a 30-year fixed rate mortgage is 3.9 percent, down slightly from the rate of 4.1 percent at this time last year, according to Freddie Mac, the government mortgage finance agency.
Homebuyers should prepare for the possibility of longer closing periods as new federal rules governing mortgage disclosures go into effect Oct. 3. The rules, aimed at curbing abuses that contributed to the foreclosure crisis, introduce “Know Before You Owe” forms intended to simplify and clarify the often confusing tangle of home-buying paperwork.
Important figures — total loan, interest rate, projected payments — are laid out in bold boxes that are easy to find and read. But making it simpler for buyers could require more work and time as lenders must pull together this information from various parties involved in the loan, including lawyers and title companies.
In the past, these parties worked somewhat independently, providing buyers with the different documents on different schedules. Industry officials say it initially could take as long as 60 days to close as lenders get used to the process.