Monday, June 4, 2012

2012 Shows Disappointing Home Sales So Far

2012 has been a difficult time so far to sell a home in Longmeadow….

Shown below are a series of charts summarizing the latest single family home sales for Longmeadow, Massachusetts.  These latest results from January - May 2012 include both MLS and FSBO transactions and are based upon public information obtained from the Hampden County Registrar of Deeds website.

A quick review of home sales for the first five months of 2012 shows that home sales were slightly higher (55) vs. the corresponding period in 2011 (54) and slightly lower (-6%) vs. the 7 year average (see figure 1 below).

However, a more thorough examination of the recent data shows troubling trends…       
  • Median prices showed a steep decline in the Jan - May 2012 period from corresponding results in 2011. The median sales price (6 month trailing average) in May 2012 was $244,100 as compared to $302,500 one year ago (19% lower) and $315,000 for all of 2011.  This latest median sales price was 30% lower than the peak reached in September 2007 ($350,000) and the lowest level reached in the past 7 years.  See figures 2 and 3 below for details.
  • ~75% of the homes sold (41 out of 55) were at prices below the official assessment value- see figure 4 below. For the past 3 years a large percentage of homes (~50%) were sold at prices below the official assessment value.  The latest data shows a significant increase in this result (~75%).

  • The latest data also show some distress sales with 6 transactions involving bank ownership (foreclosure/ short sales) and a number of estate related sales.  One foreclosure sale on Ardsley Road was priced at almost $300K below the official assessment value. 10 properties (out of 55) were sold at prices more than $100K below the official assessment value.

  • For the January - May 2012 period there were only two homes sales at prices of $500K or higher.
For the past 4 years home sales prices have shown a seasonal cycle with prices strengthening during the summer months when demand for homes typically increases.  Hopefully, 2012 results will show a similar trend.
Longmeadow property taxes continue to increase at a rapid pace.

FY2012 property taxes increased an average of +5.4% from FY2011 and FY2013 property taxes are projected to increase another 5.8% over FY2012.  A large portion of these tax increases is due to the building of the new Longmeadow High School.  The combination of a poor economy/ jobs picture and the potential need for additional infrastructure improvements (new DPW facility, roads/sewer repair, renovation of the two middle schools, etc.) looming in the future is likely having a dampening effect on Longmeadow home sales.

Selling a home in the current environment continues to be very difficult.  Hopefully, the latest home sales data is pointing to a bottoming process for Longmeadow real estate and the road ahead will be brighter.

Figure 1- Longmeadow Monthly Home Sales[click chart to enlarge]

Figure 2- Median Sales Prices

Figure 3- Annual Median Sales Prices

Figure 4- Home Sales Price vs. Assessment Value

Here is a link to the data for 2006-2012 Real Estate Transactions that were used to develop the above graphs. Longmeadow's #1 Business and Community website Longmeadow's Newest Website