Low inventory, low mortgage rates, and – most importantly – strong demand from buyers fleeing Boston and other cities all contributed to a frenzy of activity for the shrinking number of available properties.
Home prices in our North Shore communities soared in 2020. We attribute the increased activity in the housing markets to the ongoing pandemic and it’s impact across all facets of people’s live. As we begin the New Year, we are anticipating a highly competitive start heading into the spring market.
Prices soar to record levels in 2020
- The median price of Single-Family Homes (SFH) sold in 2020 increased 13.1% to $537,500, reaching $555,000 in the second half of the year (H2).
- Every one of the 34 cities and towns in Essex County saw Year-on-Year (YOY) increases in the median selling price; only 8 of the 34 cities and towns now have a median SFH price under $500,000.
- The high-end saw renewed demand with the number of sales over $3 million doubling from 10 in 2019 to 21 in 2020.
- After a COVID-induced drop of 16.7% in sales in H1, H2 saw a 5.9% and the year was only 3.8% lower.
- The condo/townhomes median sales price increased 9.3% to $349,900. Sales also dropped sharply in H1 and rebounded strongly in H2 to end the year just 1.3% lower.
Properties sold quickly
The percentage of properties receiving offers in 15 days or less has been remarkably consistent at around 70% since June as activity recovered from the COVID-induced slowdown.
Even lower mortgage rate
The national average cost of a 30-year Fixed-Rate Mortgage (FRM) dropped below 3% in early July and fell further to close the year at 2.67%.
Overall inventory remains tight
Inventory of SFHs started the year some 30% lower than in 2019, and by Q3 it was running some 50% lower – and stayed there. Despite this, total sales were much the same as in 2019, meaning that homes sold very quickly. The YOY inventory of Condos for sales was 15% lower in January and 30% lower by October – and also stayed at that level.
Whereas a market is traditionally believed to be in equilibrium between buyers and sellers when the number of available properties equals 6 months of sales (the supply), Essex County has been in a greatly reduced supply position for some years. The supply position is normally worse at the lowest price points, but now supply is 1 month or less all the way up to $1.5 million.
We are here to provide the information and guidance that you need regarding all of your buying, selling, and real estate investing needs. If you are considering a move this year or want to discuss current market conditions, please contact us.