Low inventory, softening sales hit the Greater Boston housing market

by Liz Hughes

For the second month in a row, sales of single-family homes and condominiums declined from 2020 levels, according to the Greater Boston Association of Realtors. 

Low inventory levels and rising mortgage rates contributed to the January decline. 

In January, single-family home sales fell 15.2% year over year with the selling of 749 homes compared to the 883 homes sold in January 2021. Last month was the 10th highest on record for January. 

Condominium sales fell from last January by 7.4%, with 712 condos selling last month compared to January 2020’s record high of 769. 

Month-to-month sales activity declines were greater. Single-family home sales volume decreased 46% from December, while condo sales dropped 35.8%. 

Separately, condominium sales decreased on an annual basis by 7.4 percent, declining from a January record high of 769 units sold in January 2021 to a second-best total of 712 in January 2022. 

On a month-to-month basis, the declines were greater as single-family home sales decreased 42.6 percent from 1,305 homes sold in December, and condo sales dropped 35.8 percent from 1,109 units sold in December. 

GBAR President Melvin A. Vieira Jr. said buyer demand is still quite strong, but with barely a handful of available properties in some communities, there’s very little to sell, making it a lengthy process for buyers. 

“The lack of listings remains the biggest drag on sales right now, but there is increasing anxiety over the rise in mortgage rates, and that’s going to affect buying power and possibly the size of the buyer pool going forward,” he said. “For the time being, buyer demand continues to outpace the supply of homes for sale by a large margin. As a result, median selling prices for both single-family homes and condominiums rose to new record highs for the month in January.” 

The median selling price of a single-family home increased 7.4% from a year earlier rising to $725,000 from $674,900. In the condo market, the median selling price rose 1% from a year earlier to $595,000 from $589,000. 

Vieira said it’s still unclear if prices have reached their ceiling, but “we’ve certainly seen more buyers pumping the brakes, rather than overextend themselves financially.”

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