NewburyportNews.com, Newburyport, MA

January 25, 2013

Home sales soaring locally

Prices still struggling to increase

By Angeljean Chiaramida
STAFF WRITER

---- — NEWBURYPORT — Believing the real estate market has “turned the corner” since the bubble burst in late 2007, a Boston-based analyst is reporting that last year was the best year in home sales in the state since 2006.

According to new data released yesterday by The Warren Group, publisher of Banker & Tradesman, single-family home sales in Massachusetts rose 18 percent in 2012, marking 12 consecutive months of year-over-year sales gains and the best year on record since 2006. In all of 2012, home sales statewide rose to 46,887, up from 39,594 home sales in 2011. This is the highest number of annual sales recorded statewide since 2006, when there were 50,724 sales.

“I would characterize 2012 as the year of robust recovery in the real estate market,” said Timothy M. Warren Jr., CEO of The Warren Group. “It is clear we have turned the corner and are gaining ground rapidly. I contrast the 18 percent gain last year with the decline of 6 percent in 2011.”

Most local communities shared in the market’s good fortune last year, according to Warren Group’s statistics. Except for Merrimac and West Newbury, all cities and towns in the region saw increases in single-home sales volume when compared to 2011, with Salisbury seeing the largest volume increase of about 70 percent, and Newburyport and Amesbury at the lower end with 16 percent and 19 percent sales increase, respectively.

Merrimac’s sales volume in 2012 was the same as in 2011, with West Newbury dropping about 7 percent. The communities of Georgetown, Groveland, Newbury and Rowley all saw their sales increase in the 40 percent range.

When it comes to prices, according to Warren’s data, the median cost of homes — falling over the past six years — on average state-wide inched up in 2012 by 1.8 percent to $290,000, from $285,000 in 2011.

Locally, however, in some cases prices fell in communities that experienced increases in sales volume. According to Warren’s statistics, this is the scenario in 2012 in Newburyport’s market, where median sales price dropped about 11 percent to $375,000, while volume rose by double digits. Amesbury also saw a drop in median price of about 10 percent to $251,600, corresponding with its increased number of sales in 2012 of almost 19 percent.

The same was true of Georgetown, which posted about a 40 percent rise in sales volume, but saw its median single-family home price fall about 3 percent, to $324,900.

But Newbury saw the largest combined gains with 78 homes sold in 2012, a 44 percent increase in sales volume and an 18 percent increase in median prices to $417,000, when compared with 2011. Groveland also enjoyed good news of both fronts, selling 64 homes, up 42 percent, and a rise in median price to $313,326, or 9 percent, as well.

Selling 63 home in 2012, more than 70 percent above its 2011 total, Salisbury’s median prices went up a tick, by about 2 percent to $255,000.

Salisbury chief assessor Cheryl Gorniewicz’s experience this year mimicked Warren’s findings.

“We have seen a lot more sales in Salisbury, and some sales are coming in at or above the properties’ 2013 assessed values,” Gorniewicz said. “Sales have been pretty much across the board and throughout town.”

Gorniewicz said the rebound in prices and activity is good for property owners, especially those who are at their home-equity borrowing threshold.

“Bank appraisals could start to come in higher,” she said. “That could allow people to refinance at a lower (interest) rate.”

For Warren, 2012 signals a much needed change after years of depressing real estate news.

“We have just completed the first year of the recovery in real estate in Massachusetts,” Warren said. “In fact, it was a strong rebound with both sales volume and median prices moving upward.”

Good news

Since the heyday of home sales in 2006, every community in the region has witnessed a significant plunge in value according to Warren’s 2012 data on median selling prices. Amesbury, for example, dropped from a 2006 high of $329,950 to $251,600 last year, Georgetown from $425,000 to $324,900, and Salisbury from $319,750 to $255,000.

Even Newburyport saw its median home price drop almost $73,000 from 2006 to 2012.

Newburyport real estate broker Jerry Lischke believes Newburyport’s experience during the recent six years was not the norm, since for decades the city had a high demand among those wanting to live in the Clipper City’s unique community, in spite of the market.

The real estate market started to show signs of stress in mid-2005, he said, when sales started to slow, although few paid much attention. Prices in the Clipper City, however, didn’t begin to drop for a while, he added.

“The basic truth, in spite of those who spout statistics, is that price follows volume,” Lischke said. “That means sales volume changes first, and only after that, do prices change.”

Following a period of strong sales, prices rise to meet demand, he said. And the reverse is also true: When sales stagnate, prices will drop eventually also.

Lischke’s findings mirror Warren’s sales and price data from 2006. During that robust year in real estate in the state, Newburyport sold 190 homes with a median sales price of almost $448,000. That differs significantly from last year’s 175 sales, with a median price of $375,000.

Lischke said with recent sales activity levels on the rise, for the first time in a long time, he’s optimistic the market is really on its way to recovery.

“It could take a year or so for prices to get back to where they were in 2006, but they will eventually,” Lischke said. “The pendulum is starting to swing.”