The Putnam County housing market surged in the second quarter of 2016, with dramatic increases in both sales and prices.
Sales. Putnam sales spiked in the second quarter, with single‑family home closings up over 36% compared to last year. The Putnam market is just sizzling, with transactions up in eight straight quarters and 16 out of the last 17. Indeed, the 1,049 closings marked the first time we have seen Putnam top 1,000 sales in a 12‑month period since early 2006, at the tail end of the last seller’s market. Condo sales were also strong, rising over 14% for the quarter and now up 31% for the rolling year.
Prices. These sustained levels of buyer demand had their expected impact on pricing, with single‑family prices up across the board compared to last year: 3% on average, 10% at the median, and 7% in the price‑per‑square foot. These results were consistent with the rolling year appreciation, which was up 3% on average, 7% at the median, and 3% in the price‑per‑square foot. Condo pricing was a little more mixed, but the overall trend was strongly positive.
Inventory. Inventory was down again, falling 38% to 8.7 months of active single‑family listings and 5.4 months for condos. Anything below six months usually signifies a tight seller’s market, which would continue to drive the kind of appreciation we are seeing in Putnam.
Negotiability. The negotiability indicators showed that single‑family sellers were gaining leverage with buyers, with the listing retention rate rising and days‑on‑market falling. The retention rate in condos was flat, but the days‑on‑market fell severely, dropping 25% to under six months of market time. We would expect homes to continue to sell more quickly and for closer to the asking price as the market heats up.
Going forward, while we do not believe that the current levels of price appreciation are sustainable, we do believe that the fundamentals of the market are strong, with demand high, prices at attractive levels, interest rates near historic lows, and a gradually improving economy. Accordingly, we expect Putnam to enjoy a robust summer market, and experience more modest price appreciation through the end of the year.