Expiration of National Flood Insurance Program would impact Bay State buyers
WALTHAM, Mass. – August 23, 2011 – The Massachusetts Association of REALTORS® (MAR) reported today that July sales were up for the first time in six months compared to the year before as median prices were down. Condominium sales were also up on a year-over-year basis as median prices were essentially flat.
“It’s good to see sales increase over the same time last year, but talk over the past couple of months about the debt ceiling has definitely caused some qualified buyers to hold off on making purchases,” said 2011 MAR President Laurie Cadigan, broker-owner of Barrett & Company in Concord. “With prices continuing to be more affordable and interest rates also appearing to be headed to new record lows, those planning to buy a home are in a good position to do so.”
July 2011 Housing Numbers Podcast with
MAR President Laurie Cadigan
There were *3,890 detached single-family homes sold this July, a 14.04 percent increase from the 3,411 homes sold the same time last year. On a month-to-month basis, home sales were down 14.64 percent from 4,557 homes sold this past June.
The median selling price for single-family homes in July was $315,000 a drop of 3.1 percent compared to $325,000 in July 2010. On a month-to-month basis, the July median selling price was down 3.08 percent from $325,000 in June.
The July condominium market was up 13.35 percent compared to the same time last year (from 1,288 units sold in 2010 to 1,460 units sold in 2011). On a month-to-month basis, condominium sales were down 20.95 percent compared to the 1,847 units sold this past June.
Condominium median selling prices in July were essentially even from the July 2010 median price (from $284,700 to $285,000 in 2011). This is the fourth straight month of year-over-year increases. On a month-to-month basis, the median selling price of a condominium was down 2.4 percent from a June median of $292,000.
Looking forward, REALTORS® are concerned that if National Flood Insurance Program (NFIP) lapses (which it is set to do on September 30, 2011 if not extended by Congress), that future home sales will be impacted in the Bay State. If the program goes away, home buyers along the Massachusetts coast and flood-prone areas will not have access to affordable flood insurance.
“If a buyer is unable to obtain affordable flood insurance, there is a good chance they won’t be able to get a mortgage or close on the house,” said Cadigan, “So, not only does the lack of flood insurance result in a potential sale falling through, but it will also keep middle-income buyers from accessing good quality homes that just happen to be located in areas with a higher risk for flood.”
For the past several years, Congress has been approving short-term extensions of the NFIP's authority to issue flood insurance policies while they continue to debate long-term fiscal reforms to the program. Twice in 2010 Congress allowed the NFIP to lapse for multiple weeks at a time, which halted tens of thousands of real estate transactions in areas where home buyers are required to purchase flood insurance to obtain a mortgage.
Inventory and Days on Market:
The inventory of single-family homes as of July 31, 2011 decreased 4.1 percent from July 2010 (35,006 listings in 2010 to 33,556 listings in 2011) which translates into 10.7 months of supply in July 2011. This is up from 9.6 months of supply last year and down from 11.1 months in May.
The inventory of condominiums on the market in July went down 16.1 percent compared to the year before (13,639 listings in 2010 to 11,438 listings in 2011), which translates into 9.4 months of supply, which is up from 9.0 months in July 2010 and down from 10.1 months in June.
Detached single-family homes stayed on the market an average of 99 days in July 2011 compared to an average of 92 days in July 2010. Condos stayed on the market an average of 101 days, essentially the same as the average in July 2010 (102 days). On a month-to-month basis, days on market for single-family homes were down from 103 days in June, while condos were down from 105 days.
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: As of July 2011, all 2010 and 2011 housing data has been updated to reflect new collection methods from the three REALTOR® affiliated Multiple Listing Services in Massachusetts via 10K Research and Marketing.
Editors and reporters: Please note that the term Realtor is properly spelled with an initial capital “R”, per the Associated Press Stylebook.