August median-home price spike leads to another drop in sales volume

by Liz Hughes

A double-digit spike in the median price of a single-family home in Massachusetts August caused sales numbers to decline for the second month in a row, according to a new report from the Warren Group. The same report found condo activity remained robust, as both prices and sales numbers increased.

In August, the median single-family home price increased 11.5% to $535,000, up from $480,000 in August 2020 and a 27.4% increase from $420,000 in August 2019. Last month’s spike marks a new all-time high for August. It was also the fifth-consecutive month the median price was above $500,000, according to the report. 

While prices were up, single-family home sales themselves dropped, down 6.2%, with 6,318 sales, compared to 6,734 in August 2020. Looking back two years, sales declined 4.6% from 6,621 transactions in August 2020. 

The Warren Group CEO Tim Warren said the decline in home sales volume for two months in a row is significant. 

“The data doesn’t lie,” he said in a release. “We’ve seen both the number of new listings and months supply dwindle and the galloping real estate market has slowed to a fast trot. No doubt that the low inventory and declining number of new listings is one factor, but it may not be the only one. The median price rose 11.4% last year and gained 19.1% through July of this year. I think prices have gotten higher than a lot of people can afford. Increasingly, the people who can afford to buy have already done so, and the rest are ready to give up on home shopping.”

Condominium prices and sales continued to grow in August. Sales were up 7.6% to 2,773, compared to 2,577 in August 2020 and 2,613 in August 2019. 

The median condo sales price rose 10.6% year over year to $470,000, a new high for the month. It also marked the 13th consecutive month of prices above $400,000. August’s median condo price increased 17.1% from $401,500 in August 2019.

“Last year, as COVID-19 created uncertainty in the condo market, the number of sales slipped,” Warren said. “This year they rebounded, gaining 40.4% through July. Now, like the single-family market, we are seeing the condo inventory across Massachusetts shrink significantly. Sales are once more slowing down as prices continue to rise.” 

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