Is the housing market in Harvard starting to rebound? “Starting” is probably the operative word. Data from the widely used Multiple Listing Service (MLS) indicate that prices are at their lowest point in eight years, but that inventory is also low and houses may be selling more briskly. Whether sales volume and prices are on the rise is harder to determine.
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According to MLS numbers compiled by Victor Normand of Acton Real Estate Company, prices have dropped over the past eight years: at the height of the market in 2005, 80 homes were sold at an average price of $684,809; in 2012, 52 houses sold for an average price of $499,239. During the first five months of 2013, 23 homes sold, a rate roughly comparable to the prior year. (See graph “Number of Homes Sold.”)
However, inventory is low and for-sale homes are spending less time on the market, both of which are favorable indicators of future sales. Mina Femino of Keller Williams reports, for example, that on June 4, 2009, according to MLS, 79 single-family homes had been on the market for an average of 269 days. Four years later, on June 4, 2013, there were 33 listings, which averaged 131 days on the market. (See graph “Average Days on the Market.”)
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<p class=”subheader>
Nation, state send mixed messages</p>
<p>Across the country, home sales have risen over the past 12 months, according to the most recent report of the National Association of Realtors, which was released in May. But the association noted in the same report that sales had remained essentially flat since November. The supply of homes remains tight, the association said, and many potential buyers are having difficulty getting loans. The Warren Group, which tracks real estate sales across the Bay State, reported similar results this month, noting that sales volume had dropped by 1 percent since last year. Prices have risen and inventory has declined, they said.</p>
<p class=”>Harvard: a special case?
In a town as small as Harvard, the total numbers may not give an accurate indication of market conditions because a few sales can skew the average prices. To gain a more accurate measure of changes in Harvard, Normand provided the Press with a narrower sample of MLS data to look more closely at sales of homes typical of this area, namely four-bedroom, two-and-a-half baths colonial-style houses. According to Normand’s data, the average price for such homes peaked in 2005 at $643,758, and fell by 2012 to $523,827, a decline of nearly 19 percent (not accounting for inflation) from the 2004-2006 high. (See graph, “Average Sale Price.”)
House prices in Harvard have dropped as homeowners have adjusted to the post-recession reality, says Normand. “During the run up to the recession, I think home values in Harvard increased at a greater rate than in other communities in the region and state,” he said. “It was not uncommon for home sellers in Harvard to have an inflated sense of the value of their homes. This manifested itself by homes staying on the market significantly longer than in other communities. It was harder for Harvard property owners to come to terms with the fact that the market had dramatically changed.”
According to Normand and to Rhonda Sprague of Harvard Realty, the higher end of the market suffered the most during the recession and continues to be slow. Sprague reported that in the last six months, “only one house sold in the $900s and that was the highest price. There was one house in the $800s and one in the $700s.” Normand believes that this segment of the market may not have reached bottom.
A growing confidence
Still, Normand is confident Harvard homeowners are seeing a rebound. “Two things are happening,” he said. “Prices are increasing and property in Harvard is staying on the market significantly less time.” In May, 2012, he reported, the average number of days a house was on the market was 171; in May, 2013, that had decreased to 88.
Femino also believes the market is rebounding, because of low inventory. “I’ve been knocking on doors in several areas in Harvard to see if I can find more homes for my buyers. We’ve seen everything on the market in their price range and I haven’t been able to find anything.”
Other area realtors express more guarded optimism about the future. When asked about a rebound, Nancy Hazel of TP Hazel Realty said, “It looks better than it did last year. Selling prices have gone up some.” Sprague was also cautiously optimistic: “I would say [the Harvard market] is stabilizing and doing better. A lot of the older inventory has finally gone under contract and sold.”
Hazel commented that it was a good time to buy property because, according to what she’s been reading in trade publications, interest rates are set to rise. She added, “I’ve seen quite a few properties going in the $500s and $600s. We’ve been busy. That’s a very positive sign.”
