Let's start by looking at this housing market recovery index that we’ve been watching since the summer, during the pandemic. The four components of this, demand, supply, price and time on market. We see that slight dip right around election time, but we see it coming back.

Now, why is this important? It’s important to remember right now that we’ve settled into a very active market. We’ve gone through the dashboard of pending deals, showings and mortgage applications all trending up. The one thing down is inventory right now however we're still above that February first baseline that we saw earlier in the year.

Are prices going up too fast right now? You know, we’re seeing appreciation at a level that is asking many to say, can we sustain this in the market? Is this something I need to be worried about? What’s going on with home prices? 

Now, let's give this some perspective.  If we look at compound annual home price appreciation going all the way back to 1991, the average is 3.8% in annual home price appreciation. If we look back to 2012, that number is considerably higher, 6.1% appreciation. So, when you look at the average going back to ‘91 of 3.8%, and we look at 7%, that’s quite a jump.  We look at it since 2012, not as much of a jump but still above that. 

Now, if we were to start at 2000 and look at the historic appreciation, 3.8%, what would happen to home values if that just played out and the housing crash doesn’t happen and just as we go through this “normal” market every year. That’s not reality but then we went ahead and laid in reality, of what happens in the market when we see this run up in prices in early 2000’s, depreciation through the housing crash and then where we’ve been going back to that chart since 2012 and where do we see ourselves today. We see that the actual appreciation is outpacing the historic appreciation in this year.   

Another headline that we're likely going to see relative to this is, mortgage debt in the country soaring to close to $10 trillion. That’s obviously a big number. Many people will say okay, here we go again - prices are appreciating at an unsustainable rate, mortgage debt is soaring. If we go look back at the Federal Reserve Bank - "Mortgage balances, the largest component of household debt, rose by 85 billion in the third quarter and sat at 9.86 trillion on September 30th.Mortgage originations, which include refinances, were at 1.05 trillion, the second highest volume in the history of the series, and second only to the historic refinance boom of the third quarter of 2003."

So, as we start to see all these refinances come in, we see volume come in, we’re seeing more mortgage debt. It’s important to remember that mortgage debt is going to rise as more homes are built, and as those homes appreciate and more homes are sold. What we want to really look at is the debt service ratio. Here is a graph provided by the Fed of household debt service ratio for mortgages as a percent of disposable personal income.

We look all the way back to 1980 and you can see there, where we stand today is lower than where we were in the ‘80s and ‘90’s and certainly in the early 2000’s when we peaked at over 7%. Today we sit at 3.72% of disposable income committed to a mortgage payment. Why is that? That is the effect of lower interest rates and rising wages.

Keeping in mind projections for next year and the coronavirus, by mid-year, a majority of the population could be vaccinated. We’re going to have to see that play out and how that happens across the country. As people have more certainty. As we started this pandemic off and people questioned are people going to go back to work, or are they going to all work from home now? There’s probably some hybrid models in the middle that once people get certainty to, they can make decisions relative to housing.

A lot of this is going to depend on the path of the coronavirus and what we have going on throughout the country. We’re in a place right now where certainly cases are rising but as we look forward, the thought that always comes to mind is, it’s darkest before the dawn. There’s hope around the corner, and we’re certainly looking to the future for that!

So, next piece of information from Danielle Hale talking about the volume of homes sold. She says, “We expect sales in 2021 to come in 7% above 2020 levels.” 

We’re going to sell more homes this year than we did last year in the middle of a pandemic, and sell even more going into 2021.  Why? Because needs are changing. People are saying with these low rates, we’re going to go out and buy. There are going to be a lot of people that say we held off in listing our home this year or selling our home because we felt unsafe for whatever reason now putting their home on the market.

So again, the coronavirus will dictate what we see there as the vaccine is made available. As we go into 2021 looking like more normal patterns. Now, that’s yet to be seen relative to the spring and the summer, it's likely as we get that information and people feel more safe, then we’ll start to see more volume and more transactions.

In the Town of Plymouth, home sales decreased decreased from 108 sales in October. The Average Days on Market has dropped from over 2 months in October to just over 1 month in November.  The Average Sale Price has also dropped from $576k in October.

In the Town of Scituate, the Average Sale Price increased by just over $50,000 in November.  Home sales remain consistent however they spent a bit more time on the market than they did in October.  The number of new offerings decreased in November.

In the Town of Kingston, the number of new homes for sale and the number of homes sold in the month of November has remained consistent. The Average Days on Market increased in November and the Average Sale price increased from $524k in September and October.

In the Town of Norwell, the Average Days on Market have increased in the month of November from 40 days in October. There has been a consistent amount of inventory from April through November for the town of Norwell.  The number of homes sold in the month of November was slightly lower than in October.  The Average Sale Price remains in the high $800s range through November.

In the Town of Hanover, the number of homes sold increased in the month of November up from 16 sold in October. The Average Days on Market has increased and the Average Sale price has increased by $41,000.

In the Town of Hull, the number of homes sold increased slightly in November.  Homes entering the market have slowed down and there is significantly less inventory available.

The Average Days on Market increased from 62 days in November and the Average Sale Price has decreased by $125k.

In the Town of Sandwich, the Average Days on Market significantly decreased from 69 Days in October.  The number of homes sold has remained consistent month over month however there is less inventory available on the market. 

In the Town of Falmouth, the Average Sale Price has decreased slightly but remains in the mid $700,000s.  The number of new homes entering the market in September has decreased slightly as well. The number of homes sold has decreased although not drastically.

In the Town of Yarmouth Port, property sales have decreased again.  The Average Days on Market remains consistent although the number of new homes and current homes for sale have decreased since October.