Longmeadow 2009 Home Sales

Below are the 2009 real estate sales results for Longmeadow, Massachusetts...

• The full year 2009 results show that the number of houses sold in Longmeadow was 3.8% higher than corresponding 2008 results (165 vs. 159) but home sales were still significantly lower than recorded for prior years (2006- 189, 13% lower and 2007- 198, 17% lower).
  
  
• During the second half of 2009 median sales prices for homes continued to show improvement from the lows observed in early 2009. Median prices at year end were 15.2% higher than December 2008.
  
  
• The number of houses sold in the last two months of 2009 was significantly higher than each of the previous three years: 2009: 29 2008: 19 2007: 19 2006: 17

Some less favorable trends include:

• A large percentage of homes continue to be sold at prices below the official assessment values continuing a trend that has been in place for the past two years.
  
  
• For all of 2009 ~ 55% of the home (90 out of 165) were sold below the current assessed values.
  
  
• Full year 2009 results showed that higher priced homes (>$400K) may be more difficult to sell in the current environment with only 39 out of 165 homes (24%) sold priced above $400,000. (Currently there are 24 homes out of 60 listings (40%) on MLS that are priced above $400K.)

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Below is a chart showing the relationship between recent Longmeadow real estate Sales Prices and Assessed Values (data obtained from Vision Appraisal website).

During November- December 2009 time frame ~45% of the homes sold (13 out of 29) were at prices less than the official assessment value. For all of 2009 55% of the homes (90 out of 165) were sold below the official assessment value.

Note: The latest November/ December home sales results are compared to the new FY2010 assessed values.

During the second half of 2009 median sales prices for homes continued to show improvement from the lows observed in early 2009. Median prices at year end were 15.2% higher than December 2008.

Despite these mixed results it does appear that a bottom may be forming for the Longmeadow real estate market (as well as the rest of the US). This combined with a recovery economy may lead to a more normally functioning real estate market in 2010.

Here is a link to the data for 2006-2009 Real Estate Transactions that were used to develop the above graphs.

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Massachusetts Real Estate is Turning the Corner

The news has been filled with some very positive commentary about the improving state of the real estate market in Massachusetts. Below are excerpts from the Boston Globe and Bloomberg News- Read the full stories by clicking on the links for additional details.

Home Sales Rise in Massachusetts- Boston Globe, November 25, 2009

“Sales of single-family homes rose by 17.2 percent in October, compared with the same month last year, marking the fourth consecutive month of increases, according to Warren Group, a private company that tracks real estate data. The number of sales, 4,295, marks the highest total for the month of October since 2005.”

“The number of Massachusetts homes on the market on Oct. 31 was down 15 percent, compared with the same time last year, the 19th straight month that inventory had declined, according to the Massachusetts Association of Realtors, which also released data yesterday. Inventory of homes for sale in October was the lowest for that month since 2002, the association said.”

Home mortgage rates are at some of the lowest levels in a long time which should significantly help the recovery in home real estate sales.

Here is a recent story from Bloomberg News…

Mortgage Rates in U.S. Match Record Low Set in April - November 25, 2009
The average 30 year fixed mortgage rate for single family homes was a record low 4.78% while the average 15 year rate was 4.29% Read the full story for additional details.

Hopefully, by next Spring we will see a return to a more normal real estate market.

Sales are slowing in Longmeadow

However, there was some good news this month....

• The number of Longmeadow home sales in the January - June 2009 period were significantly higher vs. the corresponding period in 2008 (74 vs. 64). See figure 1 below.
  
• The median sales price in May and June was at the highest level since the peak in October 2007 ($318,500 vs. $350,000) and the continuing trend this year appears to be up. See figure 2 below.

On the negative side...

• There appeared to be a resurgence in home sales during the first four months of 2009 that I wrote about in a posting in early May... possibly due to low mortgage rates... but home sales for the past two months (May/ June) were at the lowest levels in the past 4 years (see figure 1).
  
• The median sales price (average of past 6 months) showed an increase during the past two months to $318,500 but it is still 9.0% lower vs. the peak reached in October 2007 ($318,500 vs. $350,000)- (see figure 2).
  
• 15 out 29 (52%) homes in May/ June were sold at less than the official Town of Longmeadow assessed value (see figure 3). This is very similar to the trend for January - June 2009 with 39 out of 74 (53%) homes selling below the assessed value.
  

Figure 1- Home Sales, Longmeadow, MA
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Figure 2- Median Sales Price, Longmeadow, MA
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Figure 3- Sales Price vs. Assessment Value, Longmeadow, MA
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For the first 6 months of 2009, there were only 5 properties (out of 74 total, 6.8%) sold at prices > $500,000 although there are 27 properties (out of 114, 23.7%) currently listed with MLS. This is probably not surprising given the current difficulties in getting large mortgages.

Home sales in Longmeadow, Massachusetts in 2009 are on track to be higher than 2008 but the recent increase in mortgage interest rates may be slowing down this resurgence. However, it does appear that a bottom may be forming in the Longmeadow real estate market (as well as the rest of the US). This bottoming process combined with a economic recovery may lead to a more normally functioning real estate market in 2010. Let's hope so!

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Longmeadow Home Sales- October 2008

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

The bargraph below shows that the number of Longmeadow home sales from January through October 2008 were significantly lower (-21.8%) vs. results for the corresponding periods in 2007 and 2006 (140 transactions in 2008 vs. 179 in 2007 and 172 in 2006).

One bright spot is that home sales results for the latest four months (July through October) were only slightly lower (-3.8%) than the corresponding periods in 2007 and 2006 (76 transactions in 2008 vs. 79 in 2007 and 78 in 2006).


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As shown in the chart below median prices declined in October to $305,000 from $315,000 in September. The latest sales data showed that 12 out of 17 homes were sold this month below the median price (Keep in mind that the calculated median prices are trailing 6 month results.) This change in median price was a significant decrease (-12.9%) from last year's peak ($350,000) and the data is similar to the national trend. In addition, 10 out of 17 homes were sold below the current Longmeadow assessment value.

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Current home inventory and sales figures indicate the average "time to sell" a home in Longmeadow remained at ~ 10-11 months.

All of the home sales data for these charts can be found at the Longmeadow-FSBO website.

Pending US Home Sales for June Increase 5.3%

The National Association of Realtors just announced that the number of pending sales of existing homes (adjusted for seasonal variations) increased by 5.3% in June (as compared to May). The "pending sales" number is viewed by many experts as a leading indicator of future home sales so this latest figure is very encouraging that the US housing crisis may be at the beginning of a bottoming process. Here is a link to an AP story on this announcement.

A previous post on this blog about pending sales for Longmeadow in May showed a healthy number (33) which was a good forecast of the latest July results.

The encouraging Longmeadow home sales report for July that I posted earlier this week looks like it may be part of a national trend.

Longmeadow Foreclosures Are Increasing…

Not really...

According to the Hampden County Register of Deeds website there were 0 foreclosures in Longmeadow in 2007 and thus far in 2008 (through today) there were 2.

This above data is incorrect... see post entitled "Longmeadow Foreclosures Are Increasing- Part II" for correct numbers.

There are currently ~ 136 houses in Longmeadow up for sale (116 MLS listing + ~ 20 FSBO’s). This is a typical number for this time of the year during the past three years.

There are approximately 5500 homes in Longmeadow so currently in 2008 ~ 2.5% of the homes are up for sale and less than 0.1% have been foreclosed by the lender.

However, there are some real estate FACTS that are sobering….

1. Longmeadow 2008 YTD Housing Sales are down 36% vs. last year (for the first six months in 2008- 64 homes were sold vs. 100 in the first 6 months of 2007).

2. The 2008 YTD median price in Longmeadow is down ~ 17% over the past year (360K vs. $300K).

RealtyTrac.com- one of the most cited websites for foreclosure information- shows 19 foreclosure listings for Longmeadow. However, these listings usually represent a notice of foreclosure to the owner and many of these situations are resolved without foreclosure.

Touting 19 properties in Longmeadow as foreclosures is like quoting $5.3 trillion dollars as the potential downside risk to the taxpayers for the bailout of Freddie Mac and Fannie Mae…. not all of the mortgages guaranteed by these GSE’s are going into foreclosure and even if they did they still would have some value.

If you are interested in staying connected with the FACTS come back and visit Real Estate Buzz at LongmeadowBiz. Here is a link to the latest stats for Longmeadow.

April Sales Figures...Good news/ bad news

The current real estate market reminds me of a “bear” stock market.

There have been days in the past …even in the most recent past six months- when the stock market has been down “big time” with the DJIA down triple digits. During these periods of time I just cringe and don’t want to know what’s happening because it is so depressing- thinking about all of the paper $$$ losses and not being able to do much about it. At the same time the various CNBC “talking heads” predict another 20% drop in stock prices and I just keep thinking about the still larger drop in my stock portfolio. Psychologically, I want to sell everything at any price and limit my losses. However, one thing that I have learned from over 30 years of investing in the stock market is that a contrarian point of view with a long term prospective is a good strategy. Large declines in the stock market point eventually lead to bargain prices with upside potential gains…. Remember the long time investment adage “big low… sell high”. However, in the heady days of the tech stock market boom, some stocks got way too high and dropped precipitously…. and haven’t come close to recovering… even after more than five years. However, solid performing stocks have recovered nicely.

I believe that the same thing will become true with the current real estate market. There are obviously overheated markets (e.g., Florida, California) where home price appreciation reached absurb levels and now these areas are correcting sharply. These markets may never again see prices as high as they have been. Too many new homes with steep price tags were built and there were not enough buyers who could really afford them. Now with the sub-prime mortgage problems and the accompanying foreclosures, short sales, etc., there are many homes becoming available with more reasonable price tags. Again, the “talking heads” are calling for greater price declines before it is over, but given our country’s demographics, there is likely to be a strong long term demand for housing at a reasonable price in the future. The inevitable drop in home prices that will occur over the next 6 months - 2 years will be uneven but will present opportunities for both buyers and sellers.

Now for the latest Longmeadow state of the housing market…

Part I- April 2008

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The numbers were similar to the rest of the country... April sales were down to 8 houses sold vs. 15 in 2007 and 10 in 2006. Jan-Apr 2008 YTD sales were also not very good with 31 vs 56 in 2007 and 47 in 2006. The large drop in YTD sales (-45%) vs. last year is similar in many other regions of the country.

The chart below shows that the median sales price (6 month trailing average) for homes sold in April 2008 showed a drop to lowest levels in almost two years.

Below is a chart showing the relationship between recent Longmeadow real estate Sales Prices and Assessed Values (data obtained from Vision Appraisal website).

Part II- The Good News

Walking around my neighborhood and driving around town recently I know of at least 10 homes that have been “sold” and will likely close in May or June that are not included in these latest sales figures. In addition, a local realtor told me recently that she had sold 5 houses in the last two weeks and was involved in one sale that involved 5 bids with the final price significantly higher than the asking price. Using the recent past home sales figures (or stock market performance) to predict the next 6 months – 5 years is akin to driving a car using the rear view mirror. While we are obviously not ready to declare that the Longmeadow real estate market has become a “seller’s market”, there are signs that maybe some improvement is in the making. One interesting comment in the April 24 Springfield Republican article by Susan Renfrew, President of the Massachusetts Assn. of Realtors was interesting: “people selling in this market also need to remember they’ll end buying their next home in the same market”. Let’s hope that by late summer/ early fall some sense of normalcy will have returned to our Longmeadow real estate market.

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Longmeadow 2007 Home Sales Increase by 4.8%

Earlier this month the National Association of Realtors reported that seasonally adjusted existing home sales decreased by 20% nationally from November 2006 to November 2007 while in Longmeadow home sales increased by 4.8% in 2007 from 2006 as shown in the chart below. A total of 198 homes were sold in 2007 as compared to 189 in 2006...

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In the same report, the National Association of Realtors stated that the national median price of homes dropped 3.3 percent ($217,300 --> $210,200) from November 2006.

The chart below shows that the median sales price for Longmeadow homes sold in 2007 increased to the mid-2006 levels after dropping in early 2007. Median prices for homes in Longmeadow showed a slight increase ($334,000 vs. $336,000) when comparing results for November 2006 vs. November 2007.

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While the overall real estate market for Longmeadow was not as vibrant in 2007 as it was in the 2005-2006 time period, sales results and median prices appeared to be doing better than many other regions of the United States.