Home sales rose steadily again in May, as median selling prices also rose to record highs.
For the ninth consecutive month, single-family home and condominium sales rose in the Bay State, according to a new Greater Boston Association of Realtors report.
GBAR cites strong demand from millennial buyers, homeowners looking for more living space, the rebounding economy and the rollout of vaccinations for boosting both market activity and home values last month.
Single-family home sales rose 29.9% from last year, increasing from 894 homes sold in May 2020 to 1,161 homes sold last month, making it the 10th most active May on record for Greater Boston home sales, according to the report. Sales were also up 13.5% from April.
Condominium sales increased significantly in May. In May 2020, condo sales hit a 19-year low. Last month, condo sales hit a new record with an increase of 123% from 625 units last May to 1,372 last month, according to the report. On a month-to-month basis, condo sales also improved by 9.2% from the sale of 1,256 units sold in April.
“The big crowds we saw at open houses during the first quarter have made for a frenetic spring and the busiest May for sales closings on record,” GBAR President Dino Confalone said in a press release. “It’s hard to believe our market has gone from a near standstill to overdrive in one short year, especially since listings are still in short supply, prices have never been higher, and we’re still living with the pandemic.”
Confalone said the biggest turnaround in the past year was in the condo market which had more listings and median sales prices $175,000 to $350,000 lower than single-family homes (area dependent).
“For now demand remains strong with lots of millennials entering their peak homebuying years, but affordability is becoming more of a factor in our market as prices continue to rise and mortgage rates start to creep up,” he added.
Inventory continues to be an issue
Inventory of both homes and condos remains at less than two months of supply for the third consecutive month, allowing home values to continue to grow as buyers in many markets are still far outnumbering listings and bidding wars continue to drive prices up.
The inventory of single-family homes was most extreme last month, according to the report, which showed a 41% year-over-year decline in active listings to 1,272 listings from 2,155 in 2020.
The report found the number of homes listed fell 14.7% from April as condo listings rose 2.3% to 2,146 from 2,097 in May 2020. While listings grew year over year, they decreased 6.6% from April.
The inventory issues are discouraging for some would-be buyers, according to the report which cites less open house foot traffic and fewer buyers in recent weeks. Additionally, inventory of both single-family and condos increased by 20% since June 1.
“We expect sales to slow and the run-up in prices to ease in the second half of the year, as the current level of activity isn’t sustainable long-term,” said Confalone. “We’re already seeing homes with inflated values sitting longer and undergoing price adjustments. Properties should be fairly priced, in excellent condition and have a desirable location to sell quickly, even in today’s seller’s market.”