Median Sale Price vs. Median Income

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Market Trends

Median Sale Price vs. Median Income


Historically, a single-family house in the US cost around 3 to 4 times the median annual income, depending on your source of information.  For example, states it is 3 times. They also state that during the housing bubble of 2006 the ratio reached 4.5.  Other sources I have run across state the median sale price during the housing bubble, in what they say 2007, reached over 5 times the median income. 

We had a huge increase in real estate prices in 2020, and have had rising real estate prices overall since around 2011-2012.  So where are we today?  From the best I can find, the median income in the town of Plymouth is approximately $89,000.  The Median sale price of a single-family home in 2020 in Plymouth was $440,000 (MLS data only).  That would mean the Median Sale price in Plymouth was apprx. 4.94 times the median household income for 2020.  Unless the median income is much higher than the best sources I could locate, the current housing prices are certainly extending mightily high. 

If inventory and interest rates are low again this year, with high demand, the trend could continue for the time being.  If, all of a sudden, we have “pent-up supply” hit the market all at once, this dynamic could change the other way.  Rising interest rates, or a downturn in the economy, could have a similar affect.  I like to simply look at the numbers and trends, relay this information to anybody who is interested, and make the best decisions based on those figures.

If you are looking to purchase a new home, the record high real estate prices (and what the future holds) is certainly something you should consider and be aware of, at the very least.  If you are selling a home, let this be a reminder that it’s a terrific time to do that from a number’s perspective (although health concerns are certainly a priority). 

To conclude, this is where we are today with historically low interest rates and inventory, and incredibly high demand.  Moving forward, these factors (supply/demand and interest rates), along with the overall health of the economy, is something to keep in mind.


The graphs below, from the board of realtors (MAR and PASS), best show where we are today (median sale prices only).  The most recent data available includes up to November of 2020.  The first graph is of Plymouth, MA (in blue), with all of MLS data in gray to show as a comparison.  The second graph shows all of the South Shore board of realtors' towns compared to the entire state (in gray).


plymouth, ma real estate home price trends


South Shore (Massachusetts) real estate trends


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