As we look forward to 2017, we take an opportunity to look back on the last year in real estate. How did 2016 compare to years prior in terms of number of houses sold and median sales price? Is 2017 going to be a good time to be a buyer and/or a seller?
2016 was another strong-performing year in the Holliston real estate market, and while it was not as strong as the previous year, this year shows some promising data for the future of the local market. The median sales price for single-family homes was down 13%, and the number sold was down by 10 units, or a 14% drop from last year.
2015, however, is a tough year to compete against! It was a standout year of the last decade, representing 42% growth over the previous year in terms of single-family homes sold, and a 16% rise in median sales price. New construction played a small role in that uptick; there were 23 new construction home sales in 2015, versus 16 in 2016.
Looking over the last ten years, the Holliston market has been steady, and not subject to wide pendulum swings in terms of price: the median home price in this time period is up only six percent, and the average sales price is separated by only $619. Incidentally, it is more relevant to look at median home values versus average, since median shows a more accurate view of the market since they are typically less affected by large deviations in the data. In 2016, only one home sold for less than $150k and only two homes sold for over $1 million.
Holliston single-family sales –
10 year history
The hottest price range - where are the bulk of the sales?
A bulk of the Holliston sales this past year of single family home sales, 32%, is between $300-$399k, which represents 59 homes sold.
While 2016 was in most ways outperformed by its older sister, 2015, it did have one winning category: the days on market dropped 14% over the previous year, and down a whopping 53% over 2006.
Mortgage Rates and Affordability
Housing agency Freddie Mac recently predicted that mortgage rates will rise to 4.0% in 2017. That’s more than 0.50% higher than the current mortgage rate average. Fed officials on December 14, 2016 raised its target for short-term interest rates by 0.25 percentage points to a range of 0.50% and 0.75%. It is important to note that the Fed does not set mortgage rates, and short-term rates and long-term rates differ. Mortgage rates typically follow long-term bond rates, such as the 10-year U.S. Treasury note. Longer-term rates typically adjust before the Fed makes a move. In fact, mortgage rates have risen almost a half percent since the election in November. The Fed also announced that it expects to raise short-term rates three times next year.
How will rising interest rates affect you?
If you are looking to buy a home, your mortgage interest rate plays a huge role in how much money a lender will let you borrow. That is, your purchasing power can change measurably if rates tick up a half to a full percentage point. It all comes down to the almighty monthly payment. If you are paying more in interest and less on principal, then your purchase price will be lower than if the reverse were true.
Summary
We expect Holliston to again have a very strong real estate market in 2017. Prices have risen steadily over the last 10 years, a trend we believe will continue, particularly since fewer homes on the market translate into higher prices for those houses that are available: a simple supply and demand equation. The downtrend of days on market may also indicate that the forecast may be tilting toward the seller’s advantage in the near term.
If you are considering selling, what can you do to maximize the sale of your home? We recommend employing market-savvy tools in getting the most money for your home. Vesta Real Estate Group partners with its clients and conducts pre-list home inspections – so there are no surprises – staging and professional photography to present your home in the best possible light. Our decades of experience have shown that being prepared for your sale yields the highest prices and best results.
What is the best strategy for buyers in a seller’s market? In a word, preparedness. Vesta recommends taking steps to get pre-qualified for a mortgage, and then lock in a favorable interest rate before rates go up. This will allow you to open up more options on your future home. Equally as important, be sure to have an experienced real estate agent working for ¬you, representing your best interests. Vesta, with our team’s decades of experience focused in and around Holliston, can advise you how to make the best decision on your biggest asset, and find your forever home.
Issue Date:
January, 2017
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