First a review of where we came from. For Arlington, Ma. the market volume peaked in 2006, and the prices peaked in 2005, at an annual median price of $503,000. Prices have shown approximately a 6% pullback since that time. The number of homes sold in 2006 was 314. In 2007, 290 homes sold so the volume has dropped 8%. So far in the first half of 2008 there have been 141 sales, so the market volume is low.
There is a seasonal volume effect on the Arlington market with Q1 (Jan, Feb, Mar) and Q4 (Oct, Nov, Dec) being market lows. This seasonality should be taken into account when looking at any monthly data. 2008 Q1 volume was very low, but Q2 ( Apr, May, Jun) sales volume was good approaching the same periods in both of the previous years. It should be expected that prices will continue to be strong through the summer.
There have been fewer homes on the market this year. With sellers holding homes off the market and thereby restricting the supply, it is seems unlikely that any drop in prices will occur. General economic forecasts seem to hold that 2008 will see the bottom for this cycle, further supporting this view. Real estate markets tend to a 7 year cycle, so with a peak in 2005 it can be expected that the bottom should be in 2008-2009.
What this means for homeowners in the near term is that there is a high demand for homes and that while sale prices will be down from 2005 highs Arlington, Ma. continues to be a high value market, and homes can be sold quickly. Homeowners who purchased more than 4 or 5 years ago still have significant equity, those having purchased or re-financed recently unfortunately will likely not see price appreciation until 2009 and beyond.
Now for the summary of July results, and where we are today. In the Single Family market, there were 43 properties listed August 1. This is down 27% from the same time last year. Sales volume in July was lower than last year with only 29 homes sold. Surprisingly median sales prices remained flat at around $470,000. In July the average time on market dropped to only 45 days. Currently we have only a 1.5 month supply of homes for sale which indicates that the Arlington, Ma. market remains heavily in favor of those selling property. Prices should strengthen as the market is supply limited and needs new inventory to remain at these volume levels.
For anyone interested in seeing the graphs and numbers behind these comments please go to my website www.MikesREALSolutions.com and look in the community for which you are interested. The reports are available for download as a .pdf file. You can e-mail me at Mike@ MikesREALSolutions.com with any questions.