Boston housing in a deep freeze: Don't blame the snow

Jan. existing home sales plunge
Jan. existing home sales plunge   

It's hard to shop for a house if you can't find the house. It would therefore be easy to blame Boston's weak home sales on record snow, but the latest numbers for January closings represent November and December buyers, well before the big snow hit. We'll blame March closings on the snow.

Sales of existing homes in January were down 17 percent from a year ago, according to the Greater Boston Association of Realtors. That has more to do with extremely tight supply than anything else. The number of listings in January was 24 percent lower than a year ago, and that pushed the median sale price higher by 3.4 percent.

"There are only nine condos on the market in all of Beacon Hill," said P.T. Vineburgh, a real estate agent with Charlesgate Realty Group. "Anything that comes on the market gets multiple listings and sells for above asking."

Boston
David Joyner | Vetta | Getty Images
Boston

Boston's most exclusive neighborhood, Beacon Hill, is not alone. There have been precious few new listings, and what is already on the market is sitting longer, now 78 days on average, compared with 65 days a year ago, according to Realtors association. The reasons are manifold.

"People don't have anywhere to go. They say, 'I could sell and do great, but what can I buy? There is nothing for me to look at or upgrade to'," said Vineburgh.

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In addition, high rents have spurred some would-be sellers to hold onto their properties and rent them out instead. This is happening especially in wealthier neighborhoods, where those who want to make a move don't necessarily depend on their current home equity to buy something else. Without those additional homes for sale, and then with the owner making another purchase, the net inventory loses.

As for the coming months, agents are not expecting much improvement. Snow has kept sellers from listing in February, and even with a likely uptick in listings in March, demand will swallow supply quickly. During a recent conference call with analysts, Bob Toll, executive chairman of luxury home builder Toll Brothers, said not to blame snow for weaker home sales.

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"It's amazing the power they [buyers] find in order to get there. Even in deep snow, shovel the walk up to your front door, you can sell houses," he claimed, with one caveat:

"Well, yes, excluding Boston."