Housing Market Trends and Conditions in the 495/MetroWest Region - - PowerPoint PPT Presentation

Housing Market Trends and Conditions in the 495/MetroWest Region

Presentation to the 495/MetroWest Suburban Edge Community Commission

Prepared by: The Public Policy Center at UMass Dartmouth Michael D. Goodman, Ph.D., David Borges, MPA, Michael P. McCarthy, MPP, and Holly Stickles, Graduate Research Assistant November 18, 2016

1

The vast majority of 495/MetroWest’s housing units are owner-occupied.

• The region has 219,660 occupied housing units,

representing 96.6% of all units

– The implied vacancy rate of 4.4% is lower than what is considered healthy for residential churn (~7.0%)

• Nearly three-quarters (74.3%) of all units are
• wner-occupied

– Higher than state average of 62.3% – Fairly stable rate since 2009 (77.3%) 2

Source: American Community Survey 2005-2009 & 2010-2014 5-year estimates

Regional housing production has dropped off significantly this century

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 1959 or earlier 1960 to 1979 1980 to 1999 2000 or later Owner Occupied Renter Occupuied

3

Source: American Community Survey 2010-2014 5-year estimates

The mix of regional housing units has been very stable in recent years

• Between 2009 and 2014, the region’s housing supply

increased by an estimated 13,404 units

4

Source: American Community Survey 2005-2009 & 2010-2014 5-year estimates

2009 2014 Total Units 216,391 229,795 In Single-Unit Building 73% 73% In Multi-Unit Building 27% 27%

Regional housing production has not recovered pre-recession levels…

• Building permit estimates show that 19,352 new units were approved

between 2009 and 2014

• During this time, an estimated 12,558 new households were formed in the

MetroWest region.

5

Source: American Community Survey 2010-2014 5-year estimates; Census of Building Permits 2009-2014

500 1000 1500 2000 2500 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Building Permits Approved by Year

… neither have home prices and closings.

6

Source: MLS Home Sales 2005-2016

• 1,000

2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 $0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 $450,000 $500,000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Number of Sales

Sales Price (Inflation-adjusted)

Median Sales Price and Total Sales Volume, 2005 to Oct. 2016

Median Sale Price Sales Volume

Sub-regional and local housing markets can vary significantly

• The median sales price

across the region was $395,000 in 2015, compared to an inflation-adjusted median of $471,779 in 2005

• So far in 2016, only

Natick, Upton, and Wayland have median sales prices at or above 2005 levels.

7

The region is home to a number of “hot markets”

• In total,495/MetroWest

saw a total of 8,499 home sales in 2015.

• Framingham, which

accounted for almost

• ne-tenth of all sales in

2015 (9.6%) still lags behind its 2005 high of 1,012 sales.

8

Homebuyer demand is strong

• The median time on

market for the entire region was 46 days.

• Only in Harvard,

Hopedale, Stow, Sudbury, and Westborough was the median time on market greater than two months.

9

Single family homes dominate the regional “for sale” market

10

Source: MLS Home Sales 2005-2016

The amount of house that buyers get for their money has been stable since 2009.

• The price per square foot declined

as the housing crisis unfolded

• The region has not recovered to

pre-recession levels at the same rate as total home prices or sales

• Since at least 2009, half (50%) of

all homes in 495/ MetroWest have 7 rooms or more

• Statewide 33% of all homes have 7

rooms or more

• One-in-three homes in

495/MetroWest has four or more bedrooms (33%)

• Compared to one-in-five statewide

(20%) 11

$0 $50 $100 $150 $200 $250 $300 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Price per Square Foot (Inflation-adjusted)

Median Price per Square Foot

Median Price/sqft

Source: MLS Home Sales 2005-2016; American Community Survey 2005-2009 & 2010-2014 5-year estimates

In 2014, 45% of renter and 30% of homeowner households were housing cost burdened.

55% 64% 55% 70% 9% 10% 10% 8% 36% 26% 35% 22% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Renters Owners Renters Owners

Share of Households

Households by Share of Income Spent on Housing Costs

Less than 30.0% of Income 30.0 to 34.9% of Income 35.0% of Income or More 2009

12

2014

Source: American Community Survey 2005-2009 & 2010-2014 5-year estimates; Owners represent those with mortgages.

Only six 495/MetroWest communities have subsidized housing inventory (SHI) shares of 10% or higher – the state’s affordable housing mandate.

• Overall, 7.8% of 495/MetroWest housing units count

towards the SHI

– These represent 7.0% of the SHI units statewide

• SHI units in the six communities that have met the goal

represent 45.17% of all SHI units in 495/MetroWest

– Largest share: Littleton (12.5%) – Most SHI units: Framingham (2,870 units or 10.5%)

13

Source: Massachusetts Dept. of Housing and Community Development Subsidized Housing Inventory (Last updated Dec. 2014)

Implications

• The region is not producing an adequate supply of

housing to meet the needs of its residents. This makes prices higher than they would otherwise be.

• The region’s housing market has not yet fully recovered

from the housing crisis

• Nearly one-in-four of the region’s renters (23,793

households) are paying more for housing than they can afford

• Inadequate housing supply constrains the prospects for

regional economic growth 14