In the Boston, MA market in January, new home closings dropped year-over-year, and with a percentage drop steeper than December 2015, there were signs the market may be worsening. There was a 62.2% decline in new home closings from a year earlier. This followed a 55.3% fall year-over-year in December.
A total of 846 new homes were sold during the 12 months that ended in January, down from 892 for the year that ended in December.
As a percentage of overall housing closings, new home closings represented 0.8%. This is down from the 2.2% of closings a year earlier. For new and existing homes, closings climbed year-over-year in January after also increasing in December year-over-year.
Pricing and Mortgage Trends
The average price of new homes dropped by 13.3% year-over-year to $555,015 per unit in January. This fall is a drop off from the 17.2% drop in December from a year earlier.
Average mortgage size on new homes saw a decline year-over-year in contrast to prices of new homes. In January 2016, the average mortgage size on newly sold homes saw a 6.3% decline from a year earlier. In December 2015, average mortgage size slid 10.5% from a year earlier.
Other Market Trends
The share of new home closings made up by attached units has risen while the share belonging to single-family homes has fallen. The share of new home closings belonging to attached units grew from 33.8% of closings in January 2015 to 60.7% of closings in January 2016. At the same time, the share belonging to single-family homes declined to 39.3% of closings from 66.2% of closings.
The average unit size of newly sold homes fell 12.6% year-over-year to 2,274 square feet in January 2016. A drop was also seen in December 2015 when the average size of new homes sold sank 19.1% to 2,087 square feet. The average size of newly sold homes moved from 2,579 square feet in December 2014 to 2,087 square feet in December 2015.
Foreclosures and real estate owned (REO) closings continued to decline from a year earlier in January, but did not look to be a burden on the market. Together, foreclosures plus REO closings represented 15.9% of existing home closings, down from 18.2% a year earlier. The percentage of existing home closings involving foreclosures dropped to 7.3% in January from 9.3% a year earlier and REO closings moved from 9.0% of existing home closings in January 2015 to 8.6% in January 2016.