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October 25, 2016

Expert anticipates 2017 home sale slowdown

Courtesy Photo Timothy Warren, CEO of The Warren Group, said the current sale pace for homes in Massachusetts will likely not continue into 2017.

Home sales in Massachusetts stepped up 2.8 percent in September, and the 5,588 single-family homes sold last month represented the most active September in more than a decade, according to data released Tuesday.

The Warren Group reported that home sales are up 12.7 percent year-to-date with 45,648 homes sold through September. Year-to-date prices are up 1.4 percent, to $347,330. The median sale price of a single-family home in September was $340,000. September was also the fifth consecutive month with at least 5,000 homes sold.

Worcester County also saw strong single-family home sales with an 8.2 percent year-over-year climb for September to 816 sales, according to The Warren Group data. This continues a strong trend for the year with the county up 15.8 percent year-to-date with 6,509 sales through September. The sale price for September was up 5 percent to a median of $245,000.

Middlesex County saw a 2.5 percent drop in sales to 1,035 for September. However, the year-to-date sales numbers are still up 6.1 percent to 9,436. The sale price for September was up 5.6 percent to a median of $458,000.

"2016 has been an outstanding year for sales," Timothy Warren, CEO of The Warren Group, said in a statement. "Though we’ve got three more months left in the year it appears that we could see 2016 sales of single-family homes reach the 2015 level of 60,523."

To reach the recent annual sales record of 60,523 set in 2015, there would have to be at least 5,000 homes sales per month in October, November and December, which Warren called a "tall task."

And looking ahead to 2017, Warren said it is unlikely that the housing market will keep up the torrid pace it is setting in 2016.

"Don't get me wrong, there is strong demand, and the economy and employment are in great shape. But there are two areas of concern," Warren said in a podcast released by the Warren Group. "First is that mortgage interest rates are sure to be higher next year and second, and perhaps more important, is the situation with inventory of homes for sale. There are not enough sellers. It's hard to set sales records when store shelves are nearly empty."

Worcester Business Journal Digital Editor Sam Bonacci added local information to this State House News Service Story.

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