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