The Greater Boston housing market showed signs of improvement last month as listings saw more modest gains and mortgage rates continued to drop from their fall peak. Both factors are meaning more homebuyer demand as the spring market officially arrives.
March not only saw increased buyer activity for single-family and condominium sales, both of which had the highest level of activity in three months, but also ended a three-month decline in the single-family home median selling price, according to the latest Greater Boston Association of REALTORS® March market report.
In March, single-family home sales fell 17.7% year over year, with 755 homes sold, compared to 499 homes sold in March 2022. Last month was the 10th month in a row of year-over-year sales declines, marking the slowest March for single-family home sales since 2009.
Condominium sales followed a similar path last month, falling for the 16th straight month with a 21.8% decline from a year earlier and marking the month’s lowest sales since 2015.
Month over month, however, March’s sales volume grew, up 48.6%, with 621 single-family homes sold, compared to 418 sold in February. Condominium sales also rose last month, up 56.3% with 694 condos sold, compared to 444 in February.
GBAR president Alison Socha says the spring homebuying season has had a slower start than we’re accustomed to, but buyer traffic and overall market activity have improved steadily since January.
“Increasingly, buyers are coming to terms with the fact that the current interest rate environment is here to stay, and this reality, along with a general easing of mortgage rates from their fall peak, has helped to kick start the market. Unfortunately, housing supply still lags behind demand, and that, more than anything, is hindering sales,” she said.
With more buyers entering the market and inventory still being constrained, selling prices in March rose both year over year and month over month.
The median selling price of a single-family home rose 5.3% from a year earlier, climbing to $830,000 from $788,000. It also rose 18.7% from a month earlier, when the median home sale price was $699,500, but was still down from its June 2022 peak of $899,950. March’s increase marks the first time the median sale price of a single-family home rose year over year or monthly since November.
The median selling price for condominiums also rose last month, climbing 1.9% from $675,000 a year earlier and 7.4% from $639,000 in February to $687,500 and up – marking the third time in the past five months condo prices appreciated on both a yearly and monthly basis. Despite the increase, March’s median sales price is still 3.8% below April 2002’s record high of $717,000.
“Even though we’re not experiencing anywhere near the level of buying frenzy we saw over the past couple of springs, it’s still a highly competitive market,” Socha said. “With listings at a premium in many communities, we’re seeing large numbers of buyers at open houses, a return to multiple offer situations on many properties, and homes that are priced right are once again selling quickly, in days rather than weeks.”
The report also found that since the end of last year, time on market has steadily decreased with single-family homes listed for a median of 15 days in March, compared to 34 in December and condominiums staying on a little longer for 19 days compared to 41 days in December.
The sold-to-list price ratio also improved in March, according to the report, which found the typical single-family home sold for 100.3% of its asking price, up 96.8% from February. Condominiums fared similarly, selling for 98.9% of the original asking price last month, compared to 97.7% in February.
Socha says for those in a position to sell, the conditions are favorable.
“Many buyers are anxious to take advantage of the recent drop in mortgage rates, and with listings lighter than a typical spring and equity values still not far from their record level of last spring, it’s an opportune time to be listing a home for sale,” she said.
Housing Inventory Is Up, But Still Not Enough
At the end of March, the market had a two- to three-month supply of inventory. But while that’s in line with last year, it’s not enough to meet current demand. Taking a page from last month’s increase in listings, Socha says they should continue to improve.
“Buyers can expect even more housing choices the further we get into the spring, but any inventory gains are likely to be modest,” Socha said. “ That should enable home values to remain firm and ensure that any future price changes are minimal.”
In March, active single-family home listings rose month over month to 42.9% to 1,206 from February’s 844. They were also up 17.8% from last March’s 1,024.
Condominium listings also increased last month, up 23.9% to 1,763 listings from 1,349 in February, yet remaining flat from March 2022.