Today, I'll show you the multi-family market in two cities! Â I'll compareÂ SomervilleÂ toLynn. Â These two cities are among Massachusett's denser areas and have lots of multi-family dwellings. Â The economy and demographics of these two cities, however, cannot be more dissimilar. Â Let's see how each has fared over the last 10 years. Â All data in this post, unless other specified, is based on information provided to and compiled by MLS Property Information Network, Inc. (MLSPIN) covering the period Jan. 2001 through Sept. 2010.
First, let's look at the average sales price and number of sales.
Both Lynn's & Somerville's average sales price and number of sales peaked in 2005. Â At the peak, Lynn's average sales price was 170% higher than the average sales price of 2001. Â At the peak, Somerville's average sales price was 136% higher than the average sales price of 2001. Â Somerville's prices did not spike as high but they also didn't fall as far either. Â Somerville's average 2010 sales price is 83% of the peak average sales price. Â Lynn's average 2010 sales price is a painful 47% of the peak average sales price.
On the flip side, since Lynn had such a drastic fall in average sales price from the peak, the sales volume in Lynn picked up from a recent low of 103 sales in 2007. Â Somerville did not see a similar spike in sales. Â From what I'm seeing in Lynn, investors have flocked to Lynn to snap up multi-families since they can get good returns on their investments there.
Next, let's look at how long properties are sitting on the market.
Interestingly, the average days on market are not all that different between Lynn & Somerville. Â Lynn did see a larger increase in average days on market after the peak but the average has fallen back in line with Somerville's average days on market.
Finally, let's take a look at foreclosures. Â Foreclosures affect home prices and can be multi-family or single family. Â The following data is from RealtyTrac.com. Â 1 in every 384 housing units in Lynn received a foreclosure filing in Sept. 2010. Â In comparison, Somerville only had 1 in every 1,610 housing units received a foreclosure filing in Sept. 2010. Â This factor likely contributed to Lynn's crash in multi-family housing prices.
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