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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Some continued good news this month....

Here is the good news...

• The first bargraph below shows that the number of Longmeadow home sales in the January - April 2009 period were significantly higher (up 45%) vs. the corresponding period in 2008 (45 vs. 31).
• April 2009 sales were up 88% from April 2008 (15 vs. 8)
• Longmeadow home sales in April 2009 (15) were at the highest level during the past four years and equal to results for April 2007.

On the negative side...

• Sales for the January - April 2009 period were still significantly lower vs. results for the corresponding January - April periods in 2007 (45 vs. 56).
• The median sales price (average of past 6 months) showed an increase this month to $303,500 but it is still 13.3% lower vs. the peak reached in October 2007 ($303,500 vs. $350,000).

Shown below are a series of charts summarizing recent single family home sales in Longmeadow, Massachusetts.

[click chart to enlarge]

Below is a chart showing the relationship between recent Longmeadow real estate Sales Prices and Assessed Values (data obtained from Vision Appraisal website). The trend of a significant number of homes selling at prices below current assessment value continued in April (6 out of 15). The chart below shows that the median sales price (6 month trailing average) in April 2009 increased to $303,500 but it is still 13.3% lower vs. peak of $350,000 reached in October 2007.

Here is a link to the data for 2006-2009 Real Estate Transactions that were used to develop the above graphs. The above results include both MLS and FSBO transactions and are based upon public information obtained from the Hampden County Registrar of Deeds website.

The latest results continue to show that dramatically lower mortgage interest rates, lower home prices (translate --> more affordable) and the upcoming prime home selling/ buying season may be combining to generate a bottom in the real estate market- both in Longmeadow and across the United States.....

Let's hope so!

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Longmeadow Home Sales Are Hanging Tough!

Shown below are a series of charts summarizing recent single family home sales in Longmeadow, Massachusetts. The bargraph below shows that the number of Longmeadow home sales in January-February 2009 period were significantly higher vs. the corresponding period in 2008 (20 vs. 15).

However, sales for the 2009 January/February period were significantly lower vs. results for the corresponding January-February periods in 2007 and 2006 (20 transactions in 2009 vs. 26 in 2007 and 28 in 2006).


[click to enlarge chart]

The above results include both MLS and FSBO transactions and are based upon public information obtained from the Hampden County Registrar of Deeds website.

The median sales price has remained relatively constant for the past 11 months but is still 17.0% lower vs. the peak reached in October 2007 ($290,500 vs. $350,000).


[click to enlarge chart]

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

The trend of a significant number of homes selling at prices below current assessment value continued in February (12 out of 20 for the Jan-Feb 2009 time period).

[click to enlarge chart]

Hopefully, with dramatically lower mortgage interest rates and the upcoming prime home selling/ buying season there will a strong rebound in the local and national real estate markets.

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Longmeadow home sales are still low compared to prior years

The bargraph below shows that the number of Longmeadow home sales in January 2009 were higher than January 2008 (10 vs. 7) but significantly lower than results for the corresponding January periods in 2007 and 2006 (10 transactions in 2009 vs. 15 in 2007 and 20 in 2006).

[click chart to enlarge]

The median sales price in January did not change vs. the preceding months but was significantly lower (-13.8%) than one year ago ($294,950 vs. $342,250- see chart below).

[click chart to enlarge]

Current home inventory and sales figures indicate the average "time to sell" a home in Longmeadow remained at ~ 10-12 months.

Hopefully, with dramatically lower mortgage interest rates (near historical lows) and the upcoming prime home selling/ buying season there will a strong rebound in the local and national real estate markets.

Longmeadow FSBO
East Longmeadow FSBO
House for Rent at LongmeadowBiz
Vacation Rentals at LongmeadowBiz

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Some Good News for Longmeadow Real Estate

“Home Prices Fell in 23 of 25 U.S. Metro Areas in May”
“Paulson Says Stimulus Worked, But Housing Still Correcting”
“US Housing Prices: When's the Bottom?”
“Worst Residential Real Estate Market Since Man First Walked on the Moon!”
“Housing relief bill unlikely to help those in most trouble”

The theme of continuing gloom and doom in the above news headlines continued to dominate the news media this past week and if you are trying to sell a house in this environment, it can get pretty depressing.

There is some good news in the latest July sales results for Longmeadow.

As shown in the chart below the number of Longmeadow home sales increased dramatically to 27 in July from 16 in June. Comparison of July results from one year ago also showed much stronger home sales results (27 vs. 18). However, because of the weak results for the first six months of 2008, 2008 YTD results are still down 23% vs. 2007 YTD results.

[click to enlarge]

As shown in the chart below there are some encouraging signs on median prices where for the fourth consecutive month the median sales price remained stable at ~ $300,000.














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Some housing experts have indicated that the first signs of a bottom in the housing crisis will be price stabilization and increased home sales. In Longmeadow, it appears that this is happening…. Hopefully, this is the beginning of the return of some normalcy to our local real estate market.

Stay tuned for further developments by visiting Real Estate Buzz at LongmeadowBiz.

Existing home sales continue slide

Existing home sales are now at the lowest rate in 10 years.

A report from Bloomberg.com this morning on the latest existing US home sales showed disappointing results and no end to the current housing problems...

Sales of existing homes in June dropped 2.6% to 4.86 million (vs. 4.99 million in May and estimated 4.94 million)

18.6 million houses, apartments and condos were vacant during the last three months. Median prices have dropped 6.1% in the past year.

Here is a link to a video interview with Rebecca Braeu, a economist/ real estate analyst with John Hancock Financial Services who sees this latest data as troubling sign for the fragile housing market.

There is some help on the way from Congress with financial fixes being planned for Fannie Mae and Freddie Mac- the giant mortgage guarantors to help improve the availability of mortgage money. In addition as much as $4 billion in grants will become available for communities to use to purchase foreclosed properties. The bill in Congress is expected to become law by next week.

Read the full story on Forbes.com.

Latest Longmeadow Housing Stats

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The latest stats for housing sales in Longmeadow do not show any signs of a recovery....

June showed 16 houses sold vs. 23 in June 2007 continuing the trend that has been observed in 2008. For the first six months of 2008, home sales are down 36% vs. the corresponding period in 2007 (64 vs 100).

The median sales price seems to have stabilized at ~ $300,000 for the past four months after dropping from the peak of $360,000 last September- a 17% drop.

Both of these trends (slower sales and lower prices) are following the national trends. Perhaps the sharp decline in median price which appears to have now stabilized is the start of the "bottoming" process.

Sales prices over the past year have correlated pretty well with official assessment values. The average house under $400K has sold at slightly above the official assessment value. 64 out of 160 homes that have sold in the past year have sold at less than the official assessment value.

With year to date sales of 64 homes and a current inventory of ~ 125 homes for sale, the average time to sell a house is now approaching 12 months- certainly not a robust sales environment not matter how you evaluate it. The other watchout is that there are many people in town who have withdrawn their homes from sale and are awaiting the beginning of a better sales climate. When housing market improves, the inventory of homes for sale will likely increase significantly.

Details of Longmeadow Real Estate Transactions for the past two years (2006- 2008) that are used to generate the above charts can be found here.

Hopefully, the report next month will show some better results and some signs of a housing recovery in 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

[click to enlarge chart]

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...

[click on chart to enlarge]

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.

[click on chart to enlarge]

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.