Sales of detached single-family homes in Massachusetts reversed a five-month decline in March, climbing to their second-highest level on record for the month, the Massachusetts Association of Realtors reported this week.
Across Massachusetts, sales of detached single-family homes increased 2 percent on an annualized basis, from 3,373 homes sold in March 2005 to 3,440 last month. Condominium sales improved 2.4 percent over the past year, from 1,691 units sold a year ago to a record 1,731 condos sold in March 2006.
The modest gain in detached single-family home sales activity marks the first time in six months that sales have risen on a year-to-year basis, while condo sales have improved over year-ago levels for the last 26 consecutive months.
Among the factors behind the market rebound are mild winter weather, improved consumer confidence, and more realistic pricing on the part of sellers, all of which helped draw out large numbers of buyers out early in the year, according to MAR. In addition, higher mortgage rates, which have risen for the last three consecutive months and are now at a 31-month high for 30-year fixed loans (6.51 percent on average in March), motivated some buyers to finalize home purchases before additional rate increases took effect, MAR reported.
“This year’s mild winter, healthier inventory levels, and steady climb in interest rates have made for a busier than normal early spring market,” said MAR President David Wluka, of Wluka Real Estate in Sharon. “Buyers who had been on the fence in recent months have gotten serious now that mortgage rates are rising, and those who delayed home purchases due to the belief that a housing bubble existed have returned to the market as it’s become clear that major price declines are unlikely,” he explained.
While the statewide median selling price for detached single-family homes did decline in March from the same period last year, the decrease was a modest 1.7 percent, as the median price slipped from $350,000 in March 2005 to $344,000 last month. Meanwhile, the statewide median selling price for condos continued to appreciate due to record demand in that market. The median selling price increased 2.2 percent over the past 12 months, from $265,000 a year ago to $270,900 in March 2006.
“The softening in prices we’re now seeing is due to today’s more plentiful supply of homes for sale, but it also reflects the decline in purchasing power caused by higher mortgage rates, which limit how much home a buyer can afford,” Wluka noted.
The inventory of unsold single-family homes and condos is now at its highest level in more than a decade, with 60,373 listings as of March 2006, an increase of 39.4 percent from a year earlier when 43,304 homes and condos we’re listed for sale.
“With so many homes to choose from, prices stabilizing, and rates still attractive, it’s a good time to buy,” Wluka said.