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Boston, MA - Freshest New Home Sales Numbers Give Hints Market Fall is Slowing

Posted on: May 06, 2012 09:16:14 AM

In January, the Boston, MA market saw a drop year-over-year in new home sales, but the decline in percentage terms was not as harsh as December 2011, signaling that the market may be evening out. There was a 35.4% fall in new home sales from a year earlier. In comparison, new home sales in the same month last year saw a 56.9% drop year-over-year in December.

A total of 1,406 new homes were sold during the 12 months that ended in January, down from 1,440 for the year that ended in December.

As a percentage of overall housing sales, new home sales accounted for 2.1%, less than the 3.6% of sales a year earlier. After dropping in December from a year earlier, sales of new and existing homes gained year-over-year in January.

Pricing and Mortgage Trends

Average price of newly sold homes had a 22.5% drop year-over-year to $358,210 per unit in January. This decline is larger than the 16.4% drop in December from a year earlier.

Average mortgage size on new homes saw a decline year-over-year in contrast to prices of new homes. In January 2012, average mortgage size dropped 17.0% from a year earlier to $270,153. Average mortgage size declined 13.7% in December 2011 from a year earlier. For new home sales, the percentage of the sale price that was being financed rose 4.9 percentage points year-over-year to 75.4% in January 2012. This was another rise after December 2011 when there was a 2.2 percentage point rise from a year earlier.

Other Market Trends

Sales of attached units, as a percentage of new home sales, have grown from last year while sales of single-family homes have slumped. Attached unit sales jumped from 21.9% of all sales in January 2011 to 32.3% of sales in January 2012. Meanwhile, single-family home sales as a percentage of all new home sales slid to 67.7% of sales from 78.1% of sales.

For all new homes sold, the average unit size dropped 36.6% year-over-year to 1,412 square feet in January 2012.

Foreclosures and real estate owned (REO) sales remained a drag on the market. Combined, foreclosures plus REO sales accounted for 26.9% of existing home sales. In January 2011, they made up 30.8%. The percentage of existing home sales involving foreclosures declined to 11.9% in January from 14.6% a year earlier while REO sales as a percentage of existing home sales fell to 15.0% from 16.1% a year earlier.

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