Case-Shiller: Simultaneous Summer Surge Stretches On

It’s time for our monthly check-in of the S&P/Case-Shiller Home Price Indices (HPI). For the full source data behind this post, plus seasonally adjusted and tiered price data, hit the S&P/Case-Shiller website. For an explanation of how the Case-Shiller data is calculated, check out their methodology pdf. Also remember that the data released on the last Tuesday of a given month is for the period two months prior (i.e. – July data is released in September).

Here are the basic Case-Shiller stats for the Boston area* as of July:

Seventeen of the twenty metro areas tracked by Case-Shiller saw an increase in their respective seasonally-adjusted HPIs between June and July. Only Las Vegas, Seattle, and Detroit continued to mark seasonally-adjusted drops month-to-month.

Here in Boston, a summer bump in home prices has been part of the routine all the way down since the peak in late 2005. However, this year’s summer spike is much sharper, and would seem to be the result of external forces rather than the natural movement of the market.

Here’s a chart of Case-Shiller HPIs for all the markets that Redfin serves:

Here’s our peak decline chart, in which we line up the peak Case-Shiller HPI value for each of Redfin’s markets, so we can see how long each market has been declining, and how much it has dropped from the peak.

I suppose this summer could be called the summer of the sudden surge or the summer of the massive desperate government intervention. Either way, the result has been increasing prices in most markets over the past few months. Potentially good news if you’re trying to sell your house, but not especially encouraging if you’re hoping to buy, but prices had not yet come down quite into your reasonable range yet. Whether the $8,000 first-time homebuyer tax credit expires or not, I think this winter will be interesting.

Here’s the flip side of the peak decline chart, the Great Summer Bounce of Aught-Nine:

It’s the best recovery that $700 billion plus $787 billion can buy!

*[Case-Shiller defines Boston as the entire Boston-Cambridge-Quincy, MA-NH Metropolitan Statistical Area, which includes all or part of the following counties: Essex MA, Middlesex MA, Norfolk MA, Plymouth MA, Suffolk MA, Rockingham NH, and Strafford NH.]

September City/Neighborhood Price Reductions

It’s been a while since we had a look at which cities and towns have the most price reductions.

The following charts show the percent of MLS, FSBO or REO listings that were price-reduced at some point before leaving the market (either sold or removed unsold from the market) in the past 90 days. Cities/towns or neighborhoods in which the number of homes taken off the market was too small to provide believable estimates are excluded from ranking.

For those that are interested, I have uploaded the full data set in Excel format here. The downloadable Excel file also includes charts showing the top ten cities/towns/neighborhoods with the least reduced-price listings.

First up are the top ten cities with the most price-reduced listings:

Of the 101 cities/towns we ranked in the Boston area this month, 40 had price-reduced ratios of fifty percent or more. The median price-reduced ratio was 47.1%.

Getting a little more granular, let’s look at the top ten neighborhoods for price reductions:

Of the 26 neighborhoods we ranked this month, 10 had a price-reduced ratio of fifty percent or more. The median price-reduced ratio was 48.6%.

Download the full spreadsheet to check where your neighborhood came in.

The Market Wrap-Up For August

Let’s take at look at the August numbers for eastern Massachusetts and see how they compare to a year ago.

Single-Family Homes, Condos & Multi-Family Properties

• 4,667 homes sold, down from 4,718 in August 2008
• The median sales price was $328,000, down from $335,000 in August 2008
• Homes that sold were on the market an average of 116 days, down from 121 days in August 2008.

We pulled these numbers from MLSPIN.

Dig Deeper Into the Trends

These numbers are for eastern Massachusetts. To see what’s happening in your neighborhood, check out our stats & trends pages.

What did you see in August?

37% Of Offers Are On Homes With Multiple Offers

In August, our Boston-area agents presented 46 bids on homes for sale and 17 of them, or 37%, were on homes with at least one other offer.

Many of these competitive situations are in popular communities like Belmont, Arlington and Cambridge. Redfin agent Adam Welling has seen lot of multiple offer situations in Somerville:

Right now, buyers are pouncing on well-priced homes in a good areas. In Davis Square, we’re seeing a lot nice condos in 2-3 unit buildings get 10+ offers and go under contract quickly.

3 Tips For Buyers

Hannah Driscoll, the #1 buyers’ agent in eastern Massachusetts in August, has three tips for buyers:

1. Determine your maximum price: Know how high you can go before you bid so you don’t have to figure this out during negotiations
2. Know what’s for sale: Be ready to make an offer as soon as you see something you like
3. Lead with your best offer: Try to put least 20% down and have a quick closing period

In the last two days, Hannah has presented three offers on single-family homes with multiple bids:

• Belmont house listed around $450,000 had five offers, four of which are over the list price
• Cambridge house listed around $700,000 had three offers, all over the list price
• Newton house listed around $770,00 had three offers

For more numbers, download the spreadsheet with the data on what happened in August.

Where are you seeing homes with multiple offers?

Hannah Driscoll Is The Top Buyers’ Agent In Massachusetts

August was another great month for our greater Boston agents! Of the 4,600+ buyers’ agents who closed a deal in August, we have two in the top five:

When you work with Redfin, you work with some of the best agents in the greater Boston area. Hannah, Adam and Sean know what’s going on in the market right now because they spend all of their time serving clients: touring homes, writing offers and closing deals.

We pulled these numbers from MLSPIN, the database for real estate transactions and listings for Massachusetts, and ranked agents who represented home-buyers of single-family homes, condominiums and multi-family buildings in August based first on number of deals, then by total dollar amount.

Our Clients Love Our Service

We survey every client and track every transaction in a central customer database. For the surveys we received in August from our clients in the greater Boston area:

• 39 clients responded to our customer-satisfaction survey and posted a review online, up from 35 in July.
• 39 of those clients, or 100%, would recommend Redfin to a friend, the same rate from July.

In these surveys, Redfin asks customers to rate the likelihood that they would recommend Redfin to a friend on a 0-to-10 scale. Customers who rated 6 or higher count as people who would recommend Redfin to a friend.

First-Time Buyer Hoping To Get The $8,000 Tax Credit? You Have 12 Days To Find A Home

The federal government is offering first-time home-buyers a tax credit of 10% of a home’s sales price up to $8,000. To qualify, you must close on a home by November 30th; if you close on December 1st, you’re out of luck.

If you’re a first-time buyer in greater Boston, you have less than two weeks left to find a home, make an offer and negotiate terms if you hope to close in time to get the $8,000 tax credit.

Close By November 13th

In a normal month, about 20% of closings slip from the last week of a month to the next. This number will almost certainly be higher in November due to the expected rush of buyers trying to get the tax credit and because November 30th falls on the Monday after Thanksgiving.

If you’re hoping to get the tax credit, you want to make sure you’ve closed before the week of Thanksgiving because it’s not a full work week:

• Thursday, November 26th: Turkey day. A day to give thanks and watch the Detroit Lions go for six Thanksgiving Day losses in a row.
• Friday , November 27th: Unofficial holiday. Everybody is recovering from their day of gluttony.
• Saturday & Sunday, November 28th & 29th: The banks aren’t open so you can’t close.
• Monday, November 30th: The last day to close and qualify for the first-time buyer tax credit. It’s going to be a goat rodeo.

To give yourself the best chance of getting the tax credit, plan on closing by November 13th. If you run into any problems during closing, you’ll have more than a week to work things out and still qualify for the tax credit.

Get An Offer Accepted By September 20th

Right now, it’s taking our Boston-area clients an average of 54 days to close once they reach initial agreement on terms. This means if you want to close by November 13th, you need to get an offer accepted by September 20th. That’s 12 days away.

For more information, check out the Home Buyer Tax Credit FAQ from the IRS and get all the details about the tax credit from the agency giving the credit. Also, check out the report that this program may be extended.

Find A Home You Like

Don’t rush into a purchase. Make sure you’re buying because you’ve found a home you want to live in, not because you want the $8,000. You don’t want to end up in the wrong house in the wrong neighborhood with the wrong commute just for a few thousand dollars.

Biggest Discounts (Belated) August Update

I apologize for the tardiness of this post. Unfortunately I did not receive the data until almost the end of the month.

Let’s check in on our stats once again and find out where buyers are currently getting the biggest discounts off asking price. If you are a potential buyer, this will help you to know which neighborhoods may be softer in terms of sale price discounts off list price, and help you know where to look for potential bargains.

In the charts below, we have taken all sales data from last month in the Boston area and sorted it by city. We calculated the overall difference between the sale price and the list price. Note that this reflects the final list price, after all price drops in the listing. Any areas with fewer than twenty sales are excluded from the top and bottom ten rankings, but interested readers may download the full data summary in Excel format (xls).

Here are the top ten areas with the largest overall discount:

The overall discount rate dropped slightly from June to July, moving from 4.4% to 4.1%. Way down south in Mashpee they had the biggest discount by far.

Here are the ten areas with the smallest discounts:

Of the 107 areas we ranked, the median discount was 3.57%.

Is the area you’re shopping not on either the top 10 or bottom 10? No problem, just download the full rankings in Excel format and hit the “FullSummary” sheet.

Of the 6,258 sales we tracked in the 1-month period, 107 homes sold for 10% or more off the asking price, while just 26 homes sold for 5% or more above the asking price.