As we say “good bye” to 2018, I thought I would share some real estate statistics for single family homes in our area. There has been lots of discussion in the media about an impending slow down creating some anxiety due to the last down turn. In order to put our minds at ease, I thought it important to review the stats from last year to see if any trends emerged based on quarterly performance. I will share thoughts on how I see things trending locally and why.
Below I’ve broken the stats down by town for 2018 -
Norwell had a great year as a whole! 170 single family homes sold. Sales volume was up 12%. The median price of $699,000 was up 5% and the average sale price of $734,250 was up 5%. The first quarter the month’s supply was only 3 months and jumped up the 2nd and 3rd quarter to an average of 6 months. The last quarter dropped to 3 months. When the housing supply gets to a 6 - 7 month’s supply, it is considered a balanced market, neither a seller’s or buyer’s market. Price changes are also an indicator of how the market is doing and price breaks increased each quarter. The first quarter was gang busters but really dropped off in July; we certainly felt it as agents. The increase in the median and average sale price contributed to the gains made in sales volume for the year.
Hingham had 280 single family homes sold in 1018. It closed the year up for sales volume by 14% even though the median price at $799,000 dropped by 2 1/2% and the average was flat at $957,690. For 2018 the sale price average was 6% less than list, which was flat compared to 2017. The inventory (month’s supply) increased the 2nd and 3rd quarter to an average of 4 months. Month’s supply followed the same trend for 2017. Price changes were mostly flat compared to 2017. The number of listings sold increased year over year each quarter except for the first quarter. Inventory never increased more than 4.25. Even though the median price dropped, the units sold increased leading to the increase in sales volume. For 2018, we did not see an increase in value, but demand is still strong resulting in low inventory and a very healthy real estate market.
Cohasset had 126 single family homes sold in 2018. Sale’s volume was down 3% for 2018, but the median price at $992,500 was up 6% and the average sale price was up 9%. This was driven by the sale of 49 Margin Street for $12,500,000. Had it not been for that sale, sales volume would have been much lower and the median and average sale price would be down. Cohasset has been experiencing a slowdown in the luxury market. The last quarter of the year 23% of the listings were all in the luxury market (over a million), most were between 2 and 3 million. Not unlike most communities, Cohasset’s inventory (month’s supply) increased each quarter with the exception of the first quarter. The 2nd and 3rd quarter averaged 6 ½ to 7 months, a balanced market while the last quarter dropped to 3 ½ months. Cohasset had a lot of properties come off the market by their listing contracts expiring in December. Price changes were flat compared to 2017, but units sold dropped by double digits each quarter. Market indicators would suggest that price breaks were needed to move inventory because Cohasset has always been highly desirable.
Scituate is a short story! 290 single family homes sold in 2018. Overall it was all positive. Closed volume dropped 3%, while the median at $589,500 was up 2% and the average sale price at $672,880 was up 3%. Inventory remained very low throughout 2018 to meet demand; month’s supply never rose over 3 months the whole year! Listings were down double digits each quarter along with price changes. Throughout 2018, Scituate’s housing inventory was never enough to meet demand! Scituate remains very desirable and any slowing seems to be due to lack of inventory.
Marshfield had 298 single family homes sold in 2018. Sales volume was down 2% and the median price at $450,000 was down 4%. The average sale price at $505,500 was down 2 ½%. Month’s supply increased like most markets the 2nd and 3rd quarter, but inventory never rose above a 3 month’s supply! Price changes were up double digits each quarter with the exception of the first quarter. Units sold were down double digits each quarter, but flat the 4th quarter. It is interesting that inventory remained low, which impacted sales volume. Low inventory is typically a good thing for sellers, but even with the low inventory, price breaks were up double digits. This would indicate an overall slowing of the market.
Hanover had 156 single family homes sold in 2018. Sales volume was down 13% due to lack of inventory. The median price at $555,000 was up 11% and the average sale price of $600,000 was up 10%. The average from list price to sale price was only 2%, which was down from 2017. Month’s supply over the 4 quarters never rose above 3%! Units sold were down double digits every quarter with the exception of the first quarter where it was flat to 2017. Similar to other towns, Hanover’s inventory was very low and price changes were down each quarter.
Pembroke had 229 single family homes sold. Sales volume was flat compared to 2017 due to lack of inventory. Month’s supply was very low, similar to Hanover and never got above 2 ¼ month’s supply! The median price at $400,000 was up 8% and the median price at $429,900 was up 6% to 2017. Price changes and days on market were all low and do not reflect a slowing of the market. Pembroke requires more inventory! Pembroke and Hanover typically are more affordable comparatively so their markets should stay strong.
Duxbury had 211 single family homes sold. Sales volume was flat compared to 2017. The median sale price at $680,000 was only up 1% and the median sale price at $806,000 was flat to 2017. Month’s supply remained low and never rose above 4 months. Units sold were down double digits for 3 quarters and flat the 4th quarter. Price changes were up slightly each quarter and days on market were down each quarter. The 4th quarter both were up double digits. Duxbury, similar to Cohasset, Hingham and Norwell where there is a good percentage of luxury homes on the market, negatively impacted market factors. Not unlike other South Shore communities, mid-range homes still cannot meet demand.
In 2019 buying a home may be more difficult for some buyers due to a slight rise in interest rates. There have been estimates that they may rise to 5.8% this year. Still low to those of us who remember rates at 10% or more! But this is sure to affect first time buyers and those who may be thinking of upgrading. Those home owners who currently hold a mortgage and have one of our historically low interest rates (under 4%) may prefer to remodel than trade up and finance a new home at an interest rate over 4.5%. Currently interest rates are approximately 4.25% for a conventional 30 year mortgage. Hard to believe in this economy we will see that large a jump. If we see a jump from 4.25 to 5.25, it will have a big impact!
In the media, we are hearing reports that inventory will increase, but this is not the case locally. Our market indicators do not show that inventory will rise to a point where there will be a balanced market (6-7 month’s supply). One of the main reasons we have low inventory locally is that potential sellers are hesitant to list their homes because they are concerned that they will not be able to find suitable housing. It’s a real catch 22! Prices should remain stable and we may continue to see appreciation.
The luxury market locally is a “different ball game”! This segment of the market is not reflective of the overall market. Now when estimating value, I cannot go by how things are trending in the overall market. The luxury market will continue to be tough and pricing will need to reflect that. I would stop short in saying it is a declining market, but it is definitely not an appreciating market.
Forecasts indicate that Millennial buyers (born between 81 and 96) will make up the largest segment of the market. Locally we see that percentage rise continually. Millennial buyers generally will sacrifice location and square footage for condition - forget sweat equity! This is partly due to the fact that most carry student debt so they tend to be very price conscious. Another contributing factor may be that they are so busy, most work over 40 hours a week and do not want to be “weekend warriors” or be inconvenienced by a remodel.