Crashachusetts Existing Home Sales: November 2007

Today, the Massachusetts Association of Realtors (MAR) released their Existing Home Sales Report for November 2007 showing again the utter foolishness of MAR president Doug Azarian’s yearlong optimistic sentiment.

In fact, MAR reports that in November, single family home sales plummeted 12.6% as compared to November 2006 with a median price decline of 2.9%.

Not to be deterred by the latest downturn in sales, Azarian continues his attempt to bamboozle the hapless homebuyer with a fresh take on deceptive spin:

“If your New Year’s resolution is to buy a home, you have the market to do it in, … We are in a ‘buyer’s market’ that really favors first-time homebuyers who don’t have a home to sell. In fact, first-time homebuyers could be one of the keys to reversing the downward sales trend of the last several months.”

Like the new spin? How about some of Azarian’s past attempts from earlier this year:

April 2007 – “The housing market in Massachusetts is gaining momentum and we can continue to feel good about where it is headed. With prices remaining stable and supplies decreasing, we can expect the spring home buying season to be active.”

June 2007 – “We can speculate that demand will continue to go up during the second half of the year.”

August 2007 – “If inventory and supply continue to decline, we should see prices remaining steady, if not continuing to tick up, through the rest of the summer and the fall,”

September 2007 – “Combined with the recent interest rate drop by the Fed and continued legislative action on Capitol Hill, the potential for continued sales growth through the fall is good.”

Is Azarian ignorant?

No. He’s a professional business owner with a vested interest in attempting to spin the outlook so as to profit from your home purchase.

Does he care that he might succeed in goading first time home buyers into making purchases near the top of a historic deflationary price spiral?

No. That’s precisely his goal.

As usual, The Warren Group’s latest figures were significantly different than that of MARs showing single family sales down 15.4% and a median price decline of 5.8% as compared to November of 2006.

We are now clearly seeing the result of the mortgage-credit meltdown with home sales resuming double digit year-over-year declines in September, October and November and even more notably, coming on the back of last year’s historic falloff.

As I predicted, the last three monthly results of the S&P/Case-Shiller index for Boston has shown renewed price declines indicating that as the mortgage-credit crisis unwinds, our area is not immune.

To better illustrate the drop-off in home prices and the potential length and depth of the current housing decline, I have compared BOTH the year-over-year and peak percentage changes to the S&P/Case-Shiller home price index for Boston (BOXR) from the 80s-90s housing bust to today’s bust (ultra-hat tip to the great Massachusetts Housing Blog for the concept).


The “year-over-year” chart compares the percentage change, on a year-over-year basis, to the BOXR from the last positive value through the decline to the first positive value at the end of the decline.

In this way, this chart captures only the months that showed monthly “annual declines” and as we can see, if history is to be a guide, we could be about one third of the way through the annual price declines with the majority of falling prices yet to come.

The “peak” chart compares the percentage change, comparing monthly BOXR values to the peak value seen just prior to the first declining month all the way through the downturn and the full recovery of home prices.

In this way, this chart captures ALL months of the downturn from the peak to trough to peak again.

As you can see the last downturn lasted 105 months (almost 9 years) peak to peak including 34 months of annual price declines during the heart of the downturn.

As in months past, be on the lookout for the inflation adjusted charts produced by BostonBubble.com for an even more accurate "real" view of the current market trend.

November’s Key Statistics:

• Single family sales declined 12.6% as compared to November 2006
• Single family median price decreased 2.9% as compared to November 2006
• Condo sales declined 14.2% as compared to November 2006
• Condo median price increased 1.9% as compared to November 2006
• The number of months supply of single family homes stands at 11.0 months.
• The number of months supply of condos stands at 12.2 months.
• The average “days on market” for single family homes stands at 133 days.
• The average “days on market” for condos stands at 141 days.

Crashachusetts Existing Home Sales: September 2007

Yesterday, the Massachusetts Association of Realtors (MAR) released their Existing Home Sales Report for September 2007 showing a slight bump in the road for president Doug Azarian’s purported two month long winning streak of increasing home sales.

In fact, MAR reports that in September, single family home sales plummeted 13.7% as compared to September 2006 with a median price decline of 0.3%.

Along with MARs release, Azarian blames the media coverage of the mortgage-credit crisis for keeping buyers on the sidelines while he simultaneously attempts to goad potential buyers by invoking the “for credit-worthy buyers now is a really good time to buy” jargon.

“it is definitely possible that all the reports about foreclosures, lack of financing, and the like have taken their toll and the result is that buyers are waiting on the sidelines. However, despite the disappointing news, interest rates are still low and for credit-worthy buyers now is a really good time to buy.”

Although I just love the addition of “for credit-worthy buyers” to that tired old line, I can’t say the same for the quality of MARs numbers.

As usual, The Warren Group’s latest figures were significantly different than that of MARs showing single family home sales down 18.7% and a median price decline of 4.4% as compared to September of 2006.

Whereas last month I speculated that we were at a crossroads of perception and information, I believe with September’s results we have firmly crossed over to the new reality of virtually non-existent (or ridiculously costly and inaccessible… take your pick) Jumbo and No-Doc loans.

We are now clearly seeing the results of the credit-mortgage crisis on home sales resulting in a new leg down that is not likely to recover anytime soon.

I now feel firmly that the next few monthly results of the S&P/Case-Shiller index for Boston will show renewed price declines indicating that as the mortgage-credit crisis unwinds, out area is not immune.

To better illustrate the drop-off in home prices and the potential length and depth of the current housing decline, I have compared BOTH the year-over-year and peak percentage changes to the S&P/Case-Shiller home price index for Boston (BOXR) from the 80s-90s housing bust to today’s bust (ultra-hat tip to the great Massachusetts Housing Blog for the concept).


The “year-over-year” chart compares the percentage change, on a year-over-year basis, to the BOXR from the last positive value through the decline to the first positive value at the end of the decline.

In this way, this chart captures only the months that showed monthly “annual declines” and as we can see, if history is to be a guide, we could be about one third of the way through the annual price declines with the majority of falling prices yet to come.

The “peak” chart compares the percentage change, comparing monthly BOXR values to the peak value seen just prior to the first declining month all the way through the downturn and the full recovery of home prices.

In this way, this chart captures ALL months of the downturn from the peak to trough to peak again.

As you can see the last downturn lasted 105 months (almost 9 years) peak to peak including 34 months of annual price declines during the heart of the downturn.

Notice that peak declines have been more significant to date and, keeping in mind that our current run-up was many times more magnificent than the 80s-90s run-up, it is not inconceivable that current decline will run deeper and last longer.

As in months past, be on the lookout for the inflation adjusted charts produced by BostonBubble.com for an even more accurate "real" view of the current market trend.

September’s Key Statistics (according to MAR):

• Single family sales declined 13.7% as compared to September 2006
• Single family median price decreased 0.3% as compared to September 2006
• Condo sales declined 13.0% as compared to September 2006
• Condo median price increased 1.9% as compared to September 2006
• The number of months supply of single family homes stands at 12.1 months.
• The number of months supply of condos stands at 12.1 months.
• The average “days on market” for single family homes stands at 129 days.
• The average “days on market” for condos stands at 135 days.

Crashachusetts Existing Home Sales: May 2007

Today, the Massachusetts Association of Realtors (MAR) released their Existing Home Sales Report for May 2007 showing further weakness to the regions residential housing market with sales of single family homes declining 7.5% compared to May of 2006.

Along with the release, MAR President Doug Azarian continued to maintain an optimistic outlook even in the face of renewed sales declines and the obvious implications of tighter lending standards.

“While tighter lending standards and reduced mortgage options for some prospective buyers this year may have had an impact on the market, stable prices and declining supply indicate there is still a steady demand. In fact, May is the fifth straight month that residential supply levels have gone down. We can speculate that demand will continue to go up during the second half of the year.”

Note that a key tenet of Azarian’s optimistic outlook depends on the “stable” prices seen when calculating the median prices based on the MAR MLS data.

Using the broader data reported during deed and mortgage transactions filed in the state's registries of deed, The Warren Group showed a 4.6% year-over-year decline to the median price of a single family home.

It’s important to note, also, that the Warren Groups numbers are more consistent with the trend and latest year-over-year results seen in the S&P/Case-Shiller index for Boston which today showed a 4.52% decline to single family home prices with futures indicating further declines for the remainder of the year and on into 2008.

Additionally, although the “MLS listed” inventory has declined throughout the last year, the sales pace has dramatically slowed resulting in an average of a 139 “days on market” for a single family home, an increase of nearly 15% compared to May 2006.

With significantly falling prices, continued declining sales volume and a slowing pace of sales, it seems hard to believe that Azarian’s optimistic outlook has any merit especially when considering that all of this weakness is coming on the back of the historic declines seen in 2006.

A more likely scenario is that our area is experiencing a fundamental correction to prices that, through unusually low interest rates and historically easy lending standards, were able to rocket to irrational heights during the run-up years.

To better illustrate the drop-off in home prices and the potential length and depth of the current housing decline, I have compared BOTH the year-over-year and peak percentage changes to the S&P/Case-Shiller home price index for Boston (BOXR) from the 80s-90s housing bust to today’s bust (ultra-hat tip to the great Massachusetts Housing Blog blogger for the concept).


The “year-over-year” chart compares the percentage change, on a year-over-year basis, to the BOXR from the last positive value through the decline to the first positive value at the end of the decline.

In this way, this chart captures only the months that showed monthly “annual declines” and as we can see, if history is to be a guide, we could be about one third of the way through the annual price declines with the majority of falling prices yet to come.

The “peak” chart compares the percentage change from the peak, comparing monthly BOXR values to the peak value seen just prior to the first declining month all the way through the downturn and the full recovery of home prices.

In this way, this chart captures ALL months of the downturn from the peak to trough to peak again.

As you can see the last downturn lasted 105 months (almost 9 years) peak to peak including 34 months of annual price declines during the heart of the downturn.

Notice that peak declines have been more significant to date and, keeping in mind that our current run-up was many times more magnificent than the 80s-90s run-up, it is not inconceivable that current decline will run deeper and last longer.

As in months past, be on the lookout for the inflation adjusted charts produced by BostonBubble.com for an even more accurate "real" view of the current market trend.

May’s Key Statistics:

• Single family sales declined 7.5% as compared to May 2006
• Single family median price increased 0.7% as compared to May 2006
• Condo sales increased 0.2% as compared to May 2006
• Condo median price increased 1.4% as compared to May 2006
• The number of months supply of single family homes stands at 9.5 months.
• The number of months supply of condos stands at 7.8 months.
• The average “days on market” for single family homes stands at 139 days.
• The average “days on market” for condos stands at 134 days.

Massachusetts Home Sales Rebound?

The headlines said it all… “Bay State Home Sales Rebound in January”, “State’s Home Sales Rebound”, “Mass Housing Market Bouncing Back”.

Or, maybe MAR President Doug Azarian summed it up with the following guarded optimism:

“We are encouraged about the way January has started off… As sellers continue to price their homes correctly, we should begin to see demand pick up, inventories go down, and the market becoming more balanced.

Obviously, looking at the numbers there is a significant increase to single family home sales this January versus the results of January 2006.

Of course we could debate about the MARs numbers and The Warren Groups numbers but for sake of simplicity let’s just consider the MAR numbers.

First, keep in mind, Boston as well as the whole of the Northeast has experienced exceptionally mild weather in January allowing for many more days of buying activity than would have otherwise occurred.

But even given the mild weather, the 2744 units sold are still under the January 2002 and 2003 results as well as 7.5% below the 2005 results.

Additionally, prices have been falling fairly regularly since June 2005 and again dropped 2.1% in January.

So, we are continuing to see a decline, both sales and prices are significantly below the peak values and soon the spring inventory will rejuvenate competition putting further pressure on prices.

As in months past, be on the lookout for the inflation adjusted charts produced by BostonBubble.com for an even more accurate "real" view of the current market trend.

Unfortunately, MAR seems to have trimmed their reporting of inventory and days on the market so, for now, we will have to live with the following key statistics for January 2006:

• Single Family Sales increased 12.6% as compared to January 2006
• Single Family Median Price declined 2.4% as compared to January 2006
• Condo Sales increased 5.3% as compared to January 2006
• Condo Median Price declined 0.7% as compared to January 2006

housing+bubble realtor massachusetts MAR NAR association+of+realtors Doug+Azarian economy housing recession home+sales median+price real+estate decline

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