With U.S. stocks rallying to fresh all-time highs on the news of a trade deal, the National Association of Home Builders’ monthly confidence index showed a 5 point increase to 76 in December.
December’s number is the highest index reading since June 1999. Index readings are par at 50; above 50 is a sign that confidence is increasing, while below 50 would imply that builders have concerns going forward.
As a reference point, last December the index was at just 56. And to show further contrast, during the housing crash, in 2009, builder sentiment hit a low of 8. NAHB Chairman Greg Ugalde stresses the, “Builders are continuing to see the housing rebound that began in the spring, supported by a low supply of existing homes, low mortgage rates and a strong labor market.”
Broken down by regions, the Northeast was not quit as robust as the national numbers. That can be expected as we have less buildable land. But in Newburyport, we did have more new building last year than we have had in numerous years, both for single-family and condos. This new construction helped bring the whole market up.
Last year, we set a new record in average sales price for single-family and condo sales. For single-family, the number of transactions is the highest on record with the exception of 2002 (Cherry Hill development).
Condo transactions also hit a new high. Properties are not only selling at a record pace, they are selling quickly. “Days On Market” have been dropping like a lead balloon over the years. It’s not a strong market, it’s a hot market.
Look at these numbers: For single-families the average selling price was 98.2% of its asking price and 45% sold at asking or above, and condos did just as well, 98.3% of asking and 40% at asking or above. As for price increases over the past few years: Since 2016, we have seen a 26% increase on single-families and a 33% increase for condos.
If you back out the new construction from the year-end transaction numbers, it would be flat from 2018. We had 25 new construction single-families. This was mainly due to the new development at The Cottages at Port Place, which will also boost this year’s numbers as it nears completion.
But the outstanding statistic of the year is the average cost of these 25 new homes: $1,022,840 (that’s $266,499 above the concrete single-family average). The condo market was equally as strong: 47 new condos with an average cost of $794,260. The two main condo projects were the Kelley School and Hines Way, while others were spread throughout the city – many being created from rental units.
We have known that real estate in Newburyport has been on a tear over the last few decades. We consistently perform above national and regional data. I will go out on a limb and predict that if Newburyport had its own confidence index, it would be over 90 today.
But this confidence is not new. It has been very strong since 2010. Builders and developers have done very well. And I don’t see an end to it in the near future. Newburyport just has too much to offer – historic downtown, Plum Island, variety of housing, easy commuting for many, and more.
Bill Barrows, who periodically contributes columns to The Daily News, has been a Realtor for 27 years. He can be reached at email@example.com.