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Median sales price in Greater Boston jumps by double digits
Buyers get off to an early start this Spring House Hunt season, but the cupboards are nearly bare.
The median sales price for a single-family home in Greater Boston jumped 10.4% year over year in March to a record high for the month, according to a report The Warren Group released Wednesday.
That price? $740,000. The median sales price for Massachusetts as a whole also broke records, climbing 7.4% to $580,000 last month.
Meanwhile, the number of listings was down 7.4%.
If home prices were running the Boston Marathon, they’d be on the podium. If listings joined the race, they wouldn’t make it out of Hopkinton.
The lack of listings is one of the things fueling home price increases, costs that are keeping more home buyers out of the market this Spring House Hunt.
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Another culprit is high mortgage interest rates, which have sellers staying put. Who wants to give up a loan at 3% for one near 7% and pay more per square foot on top of that?
“Not surprisingly, Massachusetts median single-family home prices continued to set records in March,” said Cassidy Norton, associate publisher and media relations director for the analytics firm. “Despite the increase, we actually aren’t seeing the rapid, double-digit percent increases [in Massachusetts overall] we were experiencing at the height of the pandemic and the subsequent months. Despite this slowdown, limited inventory will probably continue to be the biggest barrier to homeownership in the coming months.”
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The same story is playing out nationally. The number of active listings was up 34% the week of April 6-12, but down 41% compared with the same time period in 2019, the Housing Center of the American Enterprise Institute reported Tuesday. Sales activity was also down, by 39%.
More Spring House Hunt
A look at single-family home sales in the town of Abington underscores what is happening in the market. Sales are down roughly 64% year over year, but the medial sales price jumped 43.1% to $710,000. Meanwhile, in Worcester, a city along the commuter rail viewed as buyer friendly, condo prices were up 31.3% year over year, but sales were down 3.8%.
See the town-by-town breakdown.
Statewide, the median home sales price for a condo unit ($550,000) broke March records.
“This is the first time the median condo price has surpassed $500,000 in the month of March ever, so a median price of $550,000 is pretty unprecedented,” Norton said.
In Suffolk County, condo sales fell nearly 10%, and the median sales price was up 7%. But in Middlesex County — home to popular communities like Newton, Cambridge, and Somerville — sales were up 3.5%, and the median sales price for a condo hit $681,500, a roughly 18% increase. In the single-family home market there, sales fell 5.2%, while the median sales price climbed 8.3% to $823,000.
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View the county-by-county-breakdown.
Greater Boston overall saw a 9.4% increase in the median sales price in the condo market, to $640,000, according to the report.
Meanwhile, sales were down nearly 6% in the state and 2.1% in Greater Boston. In The Warren Group analysis, Greater Boston encompasses all 139 cities and towns within Interstate 495.
Mild winter brings out buyers
The Greater Boston Association of Realtors reported Tuesday that sales jumped by at least 30% from February to March, but “the volume of sales is below year-ago levels due to a limited supply of properties for sale.”
It was the lowest sales total for the month of March in 15 years, but it appears that home shoppers got off to an early start, according to the report.
“Even though today’s sales pace is nothing like what we saw over the past half dozen years, the market has been busier than anticipated in the early part of the year,” said Jared Wilk, GBAR president and a broker with Compass in Wellesley. “There’s a lot of pent-up demand from those who’ve been waiting for mortgage
rates to settle down, not to mention a large pool of buyers who’ve grown frustrated from losing out on other offers, and both are motivated and ready to buy.
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“At the same time, we lack listings, and that’s putting upward pressure on prices and creating affordability issues, especially in the entry-level market. It’s the primary reason sales activity isn’t stronger right now. We need more properties to sell,” he said.
But April showers may bring more than May flowers.
“It’s unlikely we will see much in the way of price softening this spring, but there is an expectation mortgage rates will ease once the Fed moves to lower interest rates, and that should help improve buyers’ purchasing power in the coming months,” Wilk stated. “Inventory levels tend to increase steadily between now and summer as well, so buyers can expect to find a larger selection of homes to choose from and more opportunity for negotiation as they look ahead,” he added.
Melvin A. Vieira Jr., a former president of the GBAR and a realtor with RE/Max Destiny in Boston, said the market and the Federal Reserve are sending the public mixed signals.
“The market is a little crazy right now,” Vieira told Boston.com. “We all hear, ‘Oh, the interest rates are going to drop,’ but then inflation ticks up a little bit and the Fed pumps the brakes.”
The economy is very different today, he said, and we should get rid of the old economic indicators and look at things more globally.
“We have people living longer, so we are consuming more goods [and] services and impacting housing. … Buyers are on the fence because they want to buy, but the cost to buy a house is so high due to the lack of housing and interest rates,” Vieira said.
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“Until they change the way zoning is regulated (a lot of zoning is still stuck in the 1950s) and transportation is fixed, we will be here for a while.”
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