BatesRealEstateReport Forecast for “Excellent” August Numbers Proves Correct
David Bates / September 28, 2011-11:06 am
At a time when the when famed real estate analyst Karl Case was quoted as saying the market was still “extremely shaky,” this blog forecasted that August would be an “excellent” month for real estate closings in the Greater Boston market. Yesterday, news outlets reporting on a press release issued by The Warren Group, a firm that tracks local real estate data, confirmed the accuracy of our prediction, citing that for August, Massachusetts real estate closings were up 15 percent versus the same month a year ago.
What will the media report for our local real estate’s September numbers? MA-PASS, a firm that processes hundreds of thousands of local real estate showing requests, communicated to this blog that showing requests in August 2011 for Greater Boston home listings were up nearly 4 percent over showing requests in August 2010. As we have repeatedly communicated, real estate sales have a simple chronology: First, property gets shown, then it goes under agreement and finally it closes. As such, any change in the showing market should be reflected in the sales market approximately 40-60 days later. As this is the fourth consecutive month where showing requests have outpaced the same time period the previous year, we are going to go with the momentum and forecast that September 2011 closings will outpace September 2010. At the same time, because this blog does not have a true grip on the sample size, we admit the formula we are using needs some tweaking.
A bonus prediction for the local September real estate numbers concerns the sales of Massachusetts multi-family homes. In July, this blog reported that the first half of the year was the worst for Greater Boston multi-family sales since 1997. Subsequent to that report, however, two incredible things have happened. One, the local rental market has gone ballistic. Some small properties in Greater Boston are seeing a 40 percent increase in rent versus the same time period a year ago. Incredible! On top of it, one highly-regarded Boston real estate investor we know of reportedly told people close to him that it was his feeling that the local rental market hit bottom in 2008 and now would be strong for the next few years. Over the same time period the rental market was going strong, the stock market has been a roller coaster. As such, we are predicting that sales for MLS multi-families will bump up in September 2011 versus September 2010