From a reader:
Re: Boston condo sales data, August 12, 2006.
Hi John, any idea how these numbers compare to a year ago? I see median prices are down about 7% from your late May report and average prices are down about 14% from the same time, but I know that year-over-year comparisons are much more relevant. I also realize that the types of units selling now affect the data, but would still be interested in it. Thanks.
Things look better than you might think, after reading all the stories in the press, etc. Boston, unlike the state of Massachusetts and other parts of the country, has not experienced as much of a slowdown in sales, nor have prices dropped by very much, overall.
There were 501 condo sales, in the city, during the month of July, 2005. In July, 2006, there were 405 condo sales – a drop of approximately 20%.
In July, 2006, the average sales price was $403,880, and the median sales price was $343,000. Final sales price was 94% of original list price.
In July, 2005, the average sales price was $432,617, and the median sales price was $335,000. Final sales price was 96% of original list price.
So, there was a drop in average sales price of 7.2%; however, median sales price stayed about the same. Median sales price is sometimes considered a more acccurate measure of the market – it’s the halfway point – half the sales are above this number, half below. Average sales price can be skewed by a couple of really high or really low sales prices.
The reader says average prices are down 14% and median prices are down 7%, since May, 2006. I didn’t check the numbers, but it might be so.
My take: Prices haven’t come down that much.
Of course, number of sales has dropped. This is what is driving the large increase in inventory. If we have a drop of 100 sales, per month, that means that over one year, you’ll have an additional 1,200 units on the market.
This is what has happened. It’s an accumulation.
I’ll have to check each month’s average and median sales data, but, overall, I’d say that prices haven’t come down as much as may be necessary, in order to get rid of the excess inventory.