By Eileen Woods
Homes sales in Massachusetts have plummeted, and it is not just the lack of inventory causing the drop-off.
Factor in rising mortgage rates and the higher cost of living, and home buyers are putting their quest for the American Dream on the back burner.
The median single-family home price in the state was $565,000 in August, while the median price for a condo was $480,000. Do you remember in June when the state median home price for a single-family surpassed $600,000 for the first time? That was at the height of the home-buying season. Fall House Hunt is here, but the home buying typically tapers off in November and December.
Massachusetts saw a 9.9% and a 18.8% year-over-year decrease in single-family and condo sales, respectively, in August, according to a housing report by The Warren Group, a real estate data analytics firm, released Tuesday. Taking a broader look, it’s a 15.1% and a 10.7% drop in sales when compared with August 2020.
“This is the fewest single-family home sales we’ve seen in the month of August since 2014,” Tim Warren, Warren Group CEO, said in a news release. “Interest rates are rising, and the number of homes for sale is falling, which are two of the biggest factors that contributed to the decline. Add concerns about inflation, declines in the stock market, and a weak economy, and consumer confidence is taking a hit. This puts many potential homebuyers on the sideline.”
And his forecast for the rest of the year offers no room for optimism when it comes to sales.
“I fully expect to see year-over-year declines in the single-family sales volume throughout the remainder of 2022,” Warren said.
In Suffolk County alone, the number of single-family home sales dropped 10.7% compared with August 2021, and the number of condo sales plummeted 30.7%. Suffolk County includes Boston, Revere, Chelsea, and Winthrop. Check out the county-by-county breakdown.
Prospective Boston buyers may be facing higher mortgage rates, but declining single-family home prices may help to ease the burden. The city saw a 20% increase in sales but a 24.9% drop in the median home price, from $3,995,000 in August 2021 to $3,000,000 in August 2022. Somerville experienced the same fluctuations: a 66.7% increase in sales but a 13.2% drop in the median price, from $1,325,000 in August 2021 to $1,150,000 last month.
The market also offered a glimmer of hope for prospective condo buyers.
“This is the first time the median condo price dipped below $500,000 in five months and the pace of increase in median price is slowing dramatically,” Warren said. “This is likely the result of rising interest rates making it much more expensive to borrow money and prospective buyers unwilling to saddle themselves with exorbitant monthly payments.”
That may be the statewide figure, but the numbers in Boston tell a different story.
In Boston, the number of condo sales was down 25% year over year, but the median price grew 8.4%. Digging deeper, into neighborhoods, sales were up a whopping 53.8% in West Roxbury and the median sales price for a condo jumped 41.2%.
Check out the community-by-community breakdown.
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