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Massachusetts 2016 First 9 Months Housing Report

Homeownership is Still Part of the American Dream

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And now may be the best time buy, while housing prices and interest rates remain low

By John Tarducci, MIRM, Senior Vice President, New Development Services Division, William Raveis Real Estate, Mortgage & Insurance

Homeownership is still part of the American dream, and people think now is a good time to buy. According to an Ipsos Public Affairs/Wells Fargo survey, 93 percent of respondents think that homeownership is an achievement to be proud of, while 86 percent agree that homeownership is a dream come true. In total, 58 percent of millennials are considering buying a new home in the next two years, while 38 percent of the general population is in the same category.

Among those respondents who do not currently own a home, 23 percent agree that the top reason is because it’s difficult to save for a down payment, while 20 percent aren’t sure they’re ready to settle-down in one location and 17 percent believe their current credit rating isn’t good enough. As we look forward to the close of 2016, these potential buyers, who will be entering the market in the next 24 months, should be highly considered by builders who are wondering where to place their investments.

Massachusetts | 2016 First 9 Months Housing Report

Housing Permits Drop in First Nine Months of 2016

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In the first nine months of 2016, as compared to the same period of 2015, the total number of housing permits dropped 12.1 percent, from 10,998 to 9,667. The most significant decline came with 5+ Unit permits, which fell from 6,834 in 2015 to 4,967 in 2016—an overall decline of 27.3 percent in the largest contributing segment to overall permit totals. There were increases in the first nine months of this year within other segments—single-unit permits rose 11.8 percent, 2-unit permits rose 28.9 percent and 3&4-unit permits rose 40 percent.

When comparing Metro Service Areas (MSA) in the Commonwealth of Massachusetts over the first nine months of 2016, several MSAs experienced declines including Barnstable Town at 15 percent, Boston-Cambridge-Newton at 12.4 percent and Worcester at 1.5 percent. Several MSAs also experienced gains, with total permits rising 800 percent in Pittsfield and 18.2 percent in Springfield.


State of MassachusettsHousing Permits Issued by MSAFirst 9 Months 2015 vs. 2016

MSA 1 Unit 2 Unit 3 & 4 Unit 5+ Unit Total Jan-Sep ‘16 % DIFF.

Barnstable Town 68 0 0 0 68 -15.00%

Boston/Cambridge/Quincy 3,893 360 270 4,967 9,430 -12.35%

Pittsfield 9 0 0 0 9 +800.00%

Springfield 24 2 0 0 26 +18.18%

Worcester 127 4 3 0 134 -1.47%

Totals 4,121 366 273 4,967 9,667 -12.10%

MSA 1 Unit 2 Unit 3 & 4 Unit 5+ Unit Total Jan-Sep ’15

Barnstable Town 80 0 0 0 80

Boston/Cambridge/Quincy 3,471 276 192 6,820 10,759

Pittsfield 1 0 0 0 1

Springfield 16 6 0 0 22

Worcester 117 2 3 14 136

Totals 3,685 284 195 6,834 10,998

% DIFF. +11.83% +28.87% +40.00% -27.32% -12.10%

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In the Commonwealth of Massachusetts, the first three quarters of 2016 saw an increase in home sales, with totals rising 8.6 percent, from 38,185 in 2015 to 41,480 in 2016. On a county-by-county level, all counties experienced increases, including: Hampden County at 15.7 percent, Bristol County at 13.5 percent, Worcester County at 12.7 percent, Plymouth

County at 12.2 percent, Norfolk County at 4.9 percent, Middlesex County at 4.8 percent, Suffolk County at 4.3 percent and Essex County at 3.1 percent.

Average Sales Price for the Commonwealth of Massachusetts finished the first nine months of 2016 1.5 percent above 2015 levels, increasing from $460,434 to $467,431. All counties experienced gains, including: Bristol County at 5.7 percent, Suffolk County at 4.2 percent, Essex County at 2.8 percent, Plymouth County at 2.5 percent, Worcester County at 2.1 percent, Middlesex County at 1.8 percent, Norfolk County at 1.8 percent and Hampden County at 0.2 percent.

In the first nine months of 2016, Average List Price increased 13.4 percent, Months of Supply fell 19 percent and Price Per Square Foot increased 2.2 percent over 2015 levels.

Single-Family Home Sales in Massachusetts


First 9 Months 2016 vs. 2015

Unit Sales 8.6%

Avg. Sales Price 1.5%

Months of Supply 19.0%

NUMBER OF UNITS SOLD AVERAGE SALES PRICE

COUNTY 2015 2016 % DIFF. 2015 2016 % DIFF.

Bristol 3,099 3,518 +13.5% $298,415 $315,391 +5.7%

Essex 4,520 4,660 +3.10% $456,900 $469,881 +2.8%

Hampden 2,576 2,980 +15.7% $204,724 $205,102 +0.2%

Middlesex 8,289 8,685 +4.80% $616,426 $627,796 +1.8%

Norfolk 4,561 4,785 +4.90% $612,578 $623,796 +1.8%

Plymouth 4,087 4,587 +12.20% $390,284 $400,179 +2.5%

Suffolk 984 1,026 +4.30% $620,622 $646,856 +4.2%

Worcester 5,488 6,187 +12.70% $285,937 $292,073 +2.1%

STATEWIDE 38,185 41,480 +8.60% $460,434 $467,431 +1.5%

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Single Family Home Sales

Single Family MarketplaceMonths of Supply First 9 Months 2015 vs. 2016

COUNTY 2015 2016 % DIFF.

Bristol 5.9 4.5 -24.1%

Essex 4.4 3.6 -18.9%

Hampden 6.4 4.8 -25.2%

Middlesex 3.4 3.0 -11.6%

Norfolk 3.9 3.4 -13.2%

Plymouth 5.8 4.5 -22.1%

Suffolk 3.2 2.9 -9.7%

Worcester 6.2 4.4 -27.8%

TOTAL 5.3 4.3 -19.0%


Single Family MarketplaceHome Sales First 9 Months 2015 vs. 2016

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In the first nine months of 2016, condominium sales saw a 5.9 percent increase, rising from 15,465 to 16,380. Most counties saw an increase in Units Sold, including: Bristol County at 24.1 percent, Middlesex County at 13.3 percent, Worcester County at 11.7 percent, Plymouth County at 9.3 percent, Essex County at two percent and Suffolk County at 0.5 percent. The only counties to not experience gains were Norfolk County, where Unit Sales fell 2.4 percent and Hampden County, where they fell one percent.

Additionally, Average Sales Price of condominiums increased overall, rising 7.5 percent from $420,679 to $452,164. Increasing prices were seen in Suffolk County at 13.5 percent, Middlesex County at 8.8 percent, Plymouth County at 4.7 percent, Norfolk County at 3.2 percent, Essex County at two percent and Hampden County at 0.8 percent. Decreases were seen in Worcester County at two percent and Bristol County at 0.7 percent.

Average List Price for condominiums in the Commonwealth of Massachusetts increased 17.7 percent during this period, Months of Supply decreased 14.1 percent and Price per Square Foot decreased 7.6 percent.

Massachusetts Condominium Sales on the Rise


First 9 Months 2016 vs. 2015

Unit Sales 5.9%

Avg. Sales Price 7.5%

Months of Supply 14.1%

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Condominium Sales on the Rise

Condominium MarketplaceMonths of Supply First 9 Months 2015 vs. 2016

COUNTY 2015 2016 % DIFF.

Bristol 5.5 4.0 -26.4%

Essex 4.1 3.3 -19.6%

Hampden 6.6 5.7 -13.8%

Middlesex 2.5 2.1 -17.9%

Norfolk 2.9 2.6 -8.2%

Plymouth 5.3 4.3 -19.3%

Suffolk 2.5 2.4 -1.9%

Worcester 5.2 4.2 -18.7%

TOTAL 3.7 3.1 -14.1%

Condominium MarketplaceHome Sales First 9 Months 2015 vs. 2016

NUMBER OF UNITS SOLD AVERAGE SALES PRICE

COUNTY 2015 2016 % DIFF. 2015 2016 % DIFF.

Bristol 518 643 +24.1% $205,375 $203,896 -0.7%

Essex 2,005 2,045 +2.0% $285,693 $291,391 +2.0%

Hampden 397 393 -1.0% $158,081 $159,379 +0.8%

Middlesex 4,252 4,817 +13.3% $422,706 $460,053 +8.8%

Norfolk 1,768 1,725 -2.4% $433,107 $447,122 +3.2%

Plymouth 729 797 +9.3% $299,428 $313,402 +4.7%

Suffolk 3,615 3,633 +0.5% $672,998 $763,847 +13.5%

Worcester 1,145 1,279 +11.7% $224,098 $219,568 -2.0%

STATEWIDE 15,465 16,380 +5.9% $420,679 $452,164 +7.5%


Connecticut | 2015 Full Year Housing Report 7

As the housing market picks up steam, homeowners are beginning to ask themselves “what do I deserve in a home.” According to the Best in American Living Blog, home design features that aren’t necessary, but desired are leading to soaring sales. These features

include oversized kitchen islands, spa-like en suites, flexible spaces that can be used as a craft cave or an office or a guest suite, outdoor entertaining spaces, extensive entryways and beautiful master bedrooms.

Needs and Wants Differentiated in Today’s Homebuyers


Connecticut | 2015 Full Year Housing Report 8

In the past year, single women made up 17 percent of all homebuyers, according to a new report from the National Association of REALTORS®. Single women are purchasing at more than twice the rate of single males, and they represent the second largest home buying group, next to married couples. What do single women want in the housing market? According to Builder, one of the keys is going above and beyond

listing specifications—instead, you should describe the benefits of each piece. Instead of offering granite countertops, describe how they make life better by being more durable, easier to clean, etc. Additionally, consistent engagement through social media and outreach is important to differentiate yourself during the buying process.

Single Women Dominate Housing Market


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As we enter the final quarter of 2016, and look forward to 2017, the housing market continues to look increasingly healthier. According to Emerging Trends in Real Estate® 2017 – created by the Urban Land Institute, today’s real estate cycle is kinder than ever before. With transaction volume on the rise, and development on the decline, today’s business cycle, currently at 85 months (as of August 2016), is the fourth longest in US history.

Where do opportunities lie for the coming year? In the Emerging Trends in Real Estate® 2017 report, the best bets for 2017 include investment in development, specifically condo construction which is underfunded almost everywhere nationally. The report also suggests taking advantage of new construction technologies, including prefabricated and modular building and three-dimensional printing. Finally, utilization of e-commerce in the logistics supply chain will become increasingly important as consumers begin caring more about cost, transparency and speed. As builders look toward 2017, they should look toward process optimization to increase not only cost savings, but also consumer satisfaction.

Credits and Resources1. Information contained herein is based on information obtained from MLSPIN and is deemed accurate but not guaranteed

2. Metro Service Area (MSA) housing permit data source: U.S. Census Bureau Compiled by HUD Research

3. Not all Massachusetts counties are made part of this report. This report focuses on the eight eastern counties (Bristol, Essex, Hampden, Middlesex, Norfolk, Plymouth, Suffolk, and Worcester).

John Tarducci, MIRM, CMP, CRBSenior Vice President

William Raveis New Development Services

[email protected]

o: 203.925.4587c: 203.640.6930


Housing Affordability on the Rise

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