By Chris Reidy, Globe Staff | December 30, 2004
Defying expectations again, the state's housing market rebounded in November, with the volume of condo sales skyrocketing 53.6 percent from the year-earlier period and setting a record for the month, according to a report released yesterday by the Massachusetts Association of Realtors.
Judy Moore, the group's president, attributed the surge to the economic recovery and 30-year fixed-rate mortgages below 6 percent. Low rates expand the pool of buyers. Afraid rates will soon rise, many consumers who had been vacillating scrambled to buy, she said.
Until yesterday, signs pointed to a softening in parts of the housing market. Before November, statewide sales for detached single-family homes fell three straight months, on a year-to-year basis.
In addition, various reports noted that Massachusetts lost population in 2004 and that its economy is only slowly creating new jobs. Also, New England's consumer confidence plunged further over the last year than in any region in the country.
John Bitner, chief economist of Eastern Investment Advisors, a unit of Eastern Bank in Boston, warned against making too much of a one-month surge.
''November could be a blip," he said. ''I wouldn't read too much into one month's numbers. We think the market will be OK in 2005. It will be firm but not as strong."
Meanwhile, nationwide sales of existing homes set a record pace in November, the National Association of Realtors said. In fact, 2004 is shaping up to be a record year both nationwide and in Massachusetts.
However, many in the industry believe the current pace can't be sustained.
David Lereah, chief economist of the National Association of Realtors, said, ''We have peaked. We should start to see some modest drops in existing home sales as mortgage rates modestly rise."
In November, existing home sales nationally hit a seasonally adjusted annual rate of 6.94 million houses, 13.2 percent above the year-earlier level.
The previous record was 6.92 million units in June.
In Massachusetts, the number of detached single-family homes sold in November was 4,063, up 17.4 percent from a year earlier, the Massachusetts Association of Realtors said.
It was the highest November since 1998 when 4,150 homes were sold, and ahead of 2004's year-to-date pace. For the first 11 months of this year, 47,470 homes have been sold, up 9.2 percent from the same period in 2003, the group said.
The median selling price for a detached single-family home in November was $345,950, up 14.6 percent from $302,000 in November 2003. The national median price for an existing home in November was $188,200, up 10.4 percent.
Mark Lippolt, executive vice president for the Central New England region of Coldwell Banker Residential Brokerage, suggested that the Red Sox march to the World Series and the presidential election distracted local buyers in September and October. Sales that might normally have occurred in the early fall were ''deferred," and those deferred sales were reflected in the November reporting period, he said. Citing an economy gathering momentum and consumers' income gains, Lippolt predicted 2005 could be the second-highest year on record, behind only 2004.
Meanwhile, Massachusetts consumers purchased 1,597 condos in November, up sharply from 1,040 in November 2003.
Low mortgage rates have made condos affordable to many renters, Moore said.
As the price of single-family homes has risen repeatedly, more consumers have been turning to condos for their first home purchase.
In November, the median selling price of a condo was $263,000, up 15.9 percent from $226,900 in November 2003.
Through November, the number of condos sold in 2004 was 18,359, up 27.1 percent from the same 11-month period in 2003.
Chuck Lemire, executive vice president of RE/MAX New England, saw nothing in November's numbers to change his long-term outlook that a soaring local market is slowly starting to lose some altitude. Over time, rising mortgage rates and a buildup in the numbers of homes on the market will result in the ''pendulum swinging back toward a buyer's market."
Chris Reidy can be reached at reidy@globe.com.
