Apprasial Notes

Market Analysis – Merrimack Valley Essex Co.

This is a review of MLS sales in Merrimack Valley in Essex County, MA. The towns of Methuen, Andover, Lawrence, North Andover, Haverhill, Boxford, Georgetown, Groveland, West Newbury, Merrimac, Amesbury, Salisbury, Newbury and Newburyport were include in the analysis. The analysis shows the average price, average reported GLA above grade, the average price per square foot and the average days on market for : active sales, under agreement sales, sales in the last six months and sales in the prior six month. I prefer looking and six month market periods because this lessens the effect of extreme weather and holiday periods that has traditionally impacted sales. Also, I divided the market into price segments in order to look at the spectrum of available price ranges.

Sales volume has increased significantly in the last six months compared to the prior six months the three lower price segments. It was relatively stable in the $750K to $1M segment. High end sales volume has dropped by 27%.

Average sale price was relatively stable. The only segment that showed an increase over 1% was the $1M+ segment that increased by about 5%.

Based on sales and under agreements over the last twelve months the following absorption rates were estimated for the active listings: $100k to $250k – 6 to 7 months; $250k-500k – 9 to 10 months; $500k to $750k – 15 to 16 months; $750k to $1M – 14 to 15 months; $1m+ - 16 months. Unfortunately, the world wide economic crisis seems to be coming just when the local real estate market appeared to be improving. The above figures must be submitted with the caveat that the recent losses in the stock market have undoubtedly put a hold on many people’s plans to enter the real estate market. The winter has been very slow over the past several years even when property values were still increasing.

Average sale price and price per square foot was overall very stable in all 5 price segments. There was a slight drop in price per square foot in the $250K to $500K and $750K to $1M segments. The high end segment showed the most decrease in value. Active listings appear to be realistically priced. All are near or at the level of the average sales price over the last six months in each category with the exception of the high end sales.

Average house size varied among the 5 segments. There was a slight drop in the low end segment. The $250K to $500K segment showed about a 2% increase. The $500k to $750 K segment showed about a 7% decrease. The $750 to $1M segment showed the greatest change with an 11% increase. This may reflect some drop down from the $1M+ category which showed the highest decrease in sales volume. Unit size in the $1M+ was stable.

Price per square foot was very stable in the lower price segments. The mid range increased slightly. The average dropped significantly in the upper two price segments. This reflects a general trend in the market toward downsizing newer properties. In addition to price, energy costs also became a factor in the marketing of larger homes. This pressure may have been reduced in the short term with the collapse of oil and gas prices.

Marketing time was relatively stable in the lower segments. The mid range and $750 to $1M segment showed a slight decrease and the high end increased significantly. This again may be an indicator of price and energy cost for the high end sales. Based on the prior 12 months sales and under agreements the absorption time for existing listings would be as follows: $100K-$250K – 3 to 4 months; $250K to $500K – 5 to 6 months; $500K to $750K – 7 to 8 months; $750k to $1M – 5 to 6 months; $1M+ - 17 to 18 months

This is a link to a copy of the new Home Valuation Code of Conduct which delineates appraiser/lender relations as required by Fannie Mae and Freddie Mac

http://narblog1.realtor.org/mvtype/appraisalinsight/2008/12/revised_home_valuation_code_of.html?&WT.mc_id=LS122408&CAT=App

MARKET ANALYSIS OF 4-8 FAMILY DWELLINGS Lowell

The above analysis indicates values dropped significantly over 2007 but appear to have somewhat stabilized over 2008. Value per square foot dropped in all four periods as did value per room. Value per unit, which is typically given the most weight in the market area dropped significantly over 2007 but stabilized in 2008. Values have been impacted by foreclosures in the market area, which has pushed values downward coupled by the economic slowdown

Market Analysis - Hillsborough County

This is a review of MLS sales in Hillsborough County. It shows the average price, average reported GLA above grade, the average price per square foot and the average days on market for : active sales, under agreement sales, sales in the last six months and sales in the prior six month. I prefer looking and six month market periods because this lessens the effect of extreme weather and holiday periods that has traditionally impacted sales. Also, I divided the market into price segments in order to look at the spectrum of available price ranges.

Sales volume has increased in the last six months compared to the prior six months the four lower price segments. Higher end property sales appear to have been very slow in the prior six months but have somewhat rebounded in the last six months. Sales volume under $500,000 increased dramatically.

The $100K - $250K and the 250K to $500K segment was the most stable in terms of price over the two periods and had the highest volume of sales and listings. Based on sales and under agreements over the last twelve months the following absorption rates were estimated for the active listings: $100k to $250k – 6 to 7 months; $250k-500k – 9 to 10 months; $500k to $750k – 15 to 16 months; $750k to $1M – 14 to 15 months; $1m+ - 16 months. Unfortunately, the world wide economic crisis seems to be coming just when the local real estate market appeared to be improving. The above figures must be submitted with the caveat that the recent losses in the stock market have undoubtedly put a hold on many people’s plans to enter the real estate market. The winter has been very slow over the past several years even when property values were still increasing.

Average sale price and price per square foot was overall very stable in all 5 price segments. There was a slight drop in price per square foot in the $250K to $500K and $750K to $1M segments. The high end segment showed the most decrease in value. Active listings appear to be realistically priced. All are near or at the level of the average sales price over the last six months in each category with the exception of the high end sales.

Average property size has remained stable in bottom 3 segments. Unit size rose significantly in the $500K to $1M segment but average sale price per square foot increased. Unit size dropped slightly in the $1+ category and price per square foot fell significantly. Marketing time dropped significantly in the bottom three categories and rose in the high end category.

Market Analysis - Rockingham County

This is a review of MLS sales in Rockingham County. It shows the average price, average reported GLA above grade, the average price per square foot and the average days on market for : active sales, under agreement sales, sales in the last six months and sales in the prior six month. I prefer looking and six month market periods because this lessens the effect of extreme weather and holiday periods that has traditionally impacted sales. Also, I divided the market into price segments in order to look at the spectrum of available price ranges.

Sales volume has increased in the last six months compared to the prior six months in all the price segments. Higher end property sales appear to have been very slow in the prior six months but have somewhat rebounded in the last six months. Sales under $250,000 increased dramatically.

The average size in that category also increased. This would appear to indicate some drop down from the next higher category but the volume in the $250-$500k category also increased and the average square footage and price per square foot were somewhat stable. This implies that simply more low end properties are available and selling in the local market.

The $250K to $500K segment was the most stable in terms of price over the two periods and had the highest volume of sales and listings. Based on sales and under agreements over the last twelve months the following absorption rates were estimated for the active listings: $100k to $250k – 7 to 8 months; $250k-500k – 10 to 11 months; $500k to $750k – 15 to 16 months; $750k to $1M – 20 to 21 months; $1m+ - 18 to 19 months. These figures must be submitted with the caveat that the recent losses in the stock market have undoubtedly put a hold on many people’s plans to enter the real estate market. The winter has been very slow over the past several years even when property values were still increasing.

Average sale price for the middle three categories has been somewhat stable. Averages for sale price have dropped slightly in the low end category and significantly in the high end category. Active listings appear to be realistically priced. All are near or at the level of the average sales price over the last six months in each category with the exception of the high end sales.

Average property size has remained stable in the $250 to $750 categories. Unit size dropped significantly in the $750K to $1M segment but average sale price per square foot increased. Unit size dropped slightly in the $1+ category and price per square foot fell significantly. Marketing time dropped significantly in the top three categories. It rose significantly in the $250K to $500K category and was stable in the low end category.