Changes to National Flood Insurance Program could have impact on home values
WALTHAM, Mass. – September 24, 2013 – The Massachusetts Association of REALTORS® (MAR) reported today that buying activity remained strong through late spring/early summer as single-family home sales and prices were up again in August. The condominium market also experienced increases in both closed sales and median prices compared to a year ago.
“August closings indicated buyers might have been reacting to the ongoing concern of rising interest rates,” said 2013 MAR President Kimberly Allard-Moccia, broker-owner of Century 21 Professionals in Braintree. “Buyer demand is steady, but folks are going to find it increasingly difficult to find a home if inventory doesn’t improve.”
There were 5,568 detached single-family homes sold this August, a 7.1 percent increase from the 5,198 homes sold the same time last year. This is the fifth straight month of year-over-year increases. On a month-to-month basis, home sales were down 3 percent from 5,750 homes sold this past July.
The median selling price for single-family home in August was $345,000 which was up 8.8 percent from $317,000 in August 2012. This is the 11th straight monthly year-over-year increase. On a month-to-month basis, the August median selling price was down from $350,000 in July 2013.
There were 2,269 condominiums sold this past August, an increase of 6.7 percent from the 2,126 condos sold the same time last year. This is the 20th straight month of year-over-year increases. On a month-to-month basis, condominium sales were down 1.2 percent from 2,297 homes sold this past July.
The median selling price for condominium in August was $320,0 00 which was up 10.3 percent from the $290,000 median price in August 2012. On a month-to-month basis, the August median selling price was up 1.7 percent from $314,500 in July 2013.
Changes to National Flood Insurance Program Could Hurt Real Estate Market:
REALTORS® are concerned that rate increases through the National Flood Insurance Program, as a result of the Biggert-Waters Flood Insurance Reform Act, will have a potentially negative impact on the Massachusetts real estate market. Without affordable flood insurance, homeowners located in flood zones could default on their mortgages due to their inability to afford their new rates. Consequently, the value of a home would be severely reduced.
“Owners of older homes in Massachusetts have been generally protected from true market pricing of the National Flood Insurance Program because their homes were built before the program was created,” said Allard-Moccia. “Now, changes being implemented to the program because of Biggert-Waters, in addition to the ongoing redrawing of the flood maps, will significantly increase insurance premiums and put homeowners at risk of losing their homes. This could put the market recovery in jeopardy.”
These rate changes, which could result in 25 percent increases each year until premiums reflect full-risk rates, are set to go into effect October 1, 2013. REALTORS® across the country are calling on Congress to pass a bill to delay this implementation and require FEMA (Federal Emergency Management Agency) to conduct a study on flood insurance affordability. This study was mandated by Sec. 236 of the Biggert-Waters act.
About the Massachusetts Association of REALTORS®:
Organized in 1924, the Massachusetts Association of REALTORS® is a professional trade organization with more than 19,000 members. The term REALTOR® is registered as the exclusive designation of members of the National Association of REALTORS® who subscribe to a strict code of ethics and enjoy continuing education programs.
*Please Note: Because of the recent change on how the MLS Property Information Network, Inc., classifies under agreement status (“UAG”), year-over-year comparisons of inventory, months of supply and days on market data between August 2012 and August 2013 are not currently possible. The Massachusetts Association of REALTORS® is working with its analytics vendor and the MLS to determine and implement a solution to update historical data to provide for accurate year-over-year comparisons.
Editors and reporters: Please note that the term Realtor is properly spelled with an initial capital “R”, per the Associated Press Stylebook.