Monthly Norfolk County property sales slump in September 2023
Could indicate a slowdown in the real estate market
Norfolk County Register of Deeds William P. O’Donnell reported that Norfolk County recordings in September 2023 show a significant decline in the total number of property sales compared to September 2022 recordings. This decline can be attributed to a limited inventory of new and existing property for sale and a housing market that continues to struggle with higher interest rates relative to what they were in 2020 and 2021.
“The limited inventory of properties for sale has created a highly competitive market and fewer opportunities for buyers,” remarked Register of Deeds William P. O’Donnell. “Moreover, the higher interest rates have made it more challenging for potential homeowners, especially first-time homebuyers, to secure affordable financing options, further dampening the demand for properties.”
The total number of deeds recorded for September 2023, which reflects both commercial and residential real estate sales and transfers, was 1251, down 12% from September 2022 and down 1% from August. However, this number also includes transfers of property within families and other non-market transactions. The total number of actual property sales for September was 668, down 21% from last year and down 5% from last month.
“Property prices dropped significantly in September compared to last year, and the number of property transactions was also down, which may suggest that the property price alone is not the sole factor contributing to the decrease in the number of deeds recorded at the Registry,” said Register O’Donnell.
The average sale price of commercial and residential properties for September 2023 fell to $864,251, a 20% decrease compared to September 2022 and a decrease of 29% from August 2023. The total dollar volume of commercial and residential sales is down, decreasing 37% from last year and 44% from last month.
“Seasoned homebuyers are doubly effected by current market conditions, as they not only face higher borrowing costs but also have limited options to choose from. Additionally, with home loan interest rates exceeding 7%, these same home owners are also less likely to refinance, leading to a decrease in the number of mortgages being recorded,” said O’Donnell.
For the month of August, lending activity overall continued to decline from last year. A total of 1,174 mortgages were recorded, which is 31% less than last year and 5% less than last month.
“Those who took advantage of the lower interest rates in 2020 and 2021 are also less likely to refinance at current rates, and with property sales going down, this results in a more pronounced decline in the number of mortgages recorded,” said O’Donnell. “For individuals who are struggling to keep up with payments now, refinancing at a higher interest rate is not going to help, which is one factor contributing to the increase in notices to foreclose and foreclosure deeds. Also, many potential sellers who would need to borrow to purchase a new property have elected not to sell given the higher interest rates.”
The Norfolk County Registry of Deeds continues to closely monitor the foreclosure market. In September 2023, there were 5 foreclosure deeds recorded as a result of mortgage foreclosures taking place in Norfolk County, whereas in September 2023, there were 4 recorded. Additionally, there were 33 notices to foreclose, the first step in the foreclosure process, more than the 25 recorded this month last year.
“We cannot begin to know all the causes that have contributed to these foreclosures and notices to foreclose, but what we do know is that a number of our neighbors have lost their homes, and even more are dangerously close to losing their homes,” said Register O’Donnell. “We all experience unforeseen events in our lives, and sometimes events beyond our control can have devastating emotional and financial effects, so I would urge anyone struggling to pay their mortgage or who knows someone who is struggling to contact one of the non-profit organizations listed on our website, www.norfolkdeeds.org.”
For the past several years, the Norfolk County Registry of Deeds has partnered with Quincy Community Action Programs (617-479-8181 x376) and NeighborWorks Housing Solutions (508-587-0950) to help anyone facing challenges paying their mortgage. Another option for homeowners is to contact the Massachusetts Attorney General’s Consumer Advocacy and Response Division (CARD) at 617-727-8400.
“These declining numbers suggest a slowdown in the real estate market. A decree in the number of deeds and mortgages, which make up a large portion of the total documents recorded at the Registry of Deeds, greatly impacts the total document volume,” noted O’Donnell.
The Registry of Deeds recorded 8,140 documents in September 2023. This was 18% less than in September 2022 and a 15% decrease compared to August 2023.
“The decrease in the number of documents recorded at the Registry of Deeds indicates a significant decline in real estate activity.” O’Donnell concluded, “This could be attributed to various factors such as economic uncertainty or changing market conditions. It will be important to monitor these trends and see how they impact the overall real estate market in the coming months.”