RE/MAX INTEGRA, New England Forecasts First-time Buyers are Expected to Fuel the 2016 Housing Market

Consumer Confidence, Low Interest Rates and Affordability to Propel Regional Housing Market

NATICK, Mass.--()--According to the RE/MAX INTEGRA, New England 2016 Housing Forecast, first-time buyers are expected to play a significant role in this year’s housing market across the region, which will also continue to experience inventory shortages in key areas, rising home values and higher interest rates.

“Single-family homes increased 2.1% on average and condominiums rose 2.6% over last year’s prices. When we see homes appreciating between two and four percent, this indicates that affordability is still high and as long as inventory expands in 2016, the New England housing market will remain healthy.”

Despite a winter season that virtually closed the doors on the housing market for more than six weeks as New Englanders dug out of record snowfall, the 2015 regional housing market ended with home sales rising 9.0% higher than 2014.

Fueling the market was pent-up demand from homebuyers forced to put their plans on hold as the region struggled with historic winter conditions. Sellers reacted to the inclement weather by pulling their homes off the market, which set the stage for the perfect storm of consumer demand and limited inventory when the snow melted. Adding to the equation was speculation that the Federal Reserve would raise interest rates at the close of 2015, which it subsequently did on December 16th. This marked the first time since 2006 that the Fed has raised rates and helped to assure millions of Americans that the economy is in better shape.

This increase in consumer confidence coupled with lower unemployment rates, a rebounding local economy and continued low-interest rates converged to create a steadily growing housing market throughout much of New England in 2015. As expected, the first quarter of 2015 saw lower-than-anticipated sales throughout New England, but as inventory increased and the snow finally melted, buyers hit the market hard, resulting in a busy late spring through late fall. Investors took a backseat in 2015, as fewer distressed or under-valued properties entered the market.

RE/MAX INTEGRA, New England data illustrates a steady market in 2015 with approximately 13,510 additional single-family homes and condominiums sold throughout the region. “The record snowfall throughout New England stopped the market in its tracks and delayed the start of the busy spring season,” said Dan Breault, Executive Vice President and Regional Director of RE/MAX, INTEGRA New England. “However, the resulting pent-up demand kicked the market into high gear for the remainder of 2015, resulting in a nine-percent sales increase on average throughout the region and every state in New England experiencing home-sale growth year-over-year.”

In Connecticut, where the average median price of a single-family home was $185,000, sales increased 13.7% year-over-year, the highest percentage sales increase in single-family homes in New England, and condominium sales declined -2.2% according to CTMLS data (the official statewide MLS for of the Connecticut Association of REALTORS®, Inc.). According to CMLS data (the official MLS for the Greater Fairfield County Area), single-family home sales increased 10.3% and condominium sales increased 2.3%. The average median price of a single-family home was $390,000 in 2015, a decrease from the median price of $400,000 in 2014, according to CMLS figures.

The average median sales price of a single-family home in Massachusetts increased 3.0% from $332,000 in 2014 to $342,000 in 2015 according to MLSPIN data. Single-family home transactions increased 8.9% from 42,862 homes sold in 2014 to 46,688 sold in 2015, and condominium sales increased 2.8% year-over-year.

At $240,000, the average median sales price of a single-family home in New Hampshire was up 5.3% over 2014. Single-family home transactions increased 11.6% year-over-year, and condominium transactions increased 15.0% from 3,284 transactions in 2014 to 3,776 in 2015 – the highest percentage sales increase in New England.

Rhode Island single-family home sales were up 9.8% year-over-year from 8,527 homes sold in 2014, to 9,359 sold in 2015, and condominium sales increased 7.3%. The average median price for a single-family home in the Ocean State increased 4.4%, reaching $227,500.

Single-family home transactions increased 12.6% in Vermont with 5,459 homes sold in 2015. Condominium transactions rose 1.3% with an average median selling price of $189,000.

“Throughout New England, we experienced moderate price increases,” said Breault. “Single-family homes increased 2.1% on average and condominiums rose 2.6% over last year’s prices. When we see homes appreciating between two and four percent, this indicates that affordability is still high and as long as inventory expands in 2016, the New England housing market will remain healthy.”

To read the entire RE/MAX of New England 2015 Housing Forecast, click here.

Contacts

Regan Communications Group
Stacy Wilbur, 617-488-2804
swilbur@regancomm.com