Boston’s housing market remained competitive last month, despite a slower pace of transactions, according to the Greater Boston Association of REALTORS (GBAR) May housing report.
May single-family home and condominium sales fell to a three-year low as supply continued to be unable to keep up with demand. Sales did, however, rise from April as new inventory hit the market and increased median sale prices by 3%, another record high, GBAR’s report found.
In May, single-family home sales fell 24.4% year over year, with 919 homes sold, compared to 1,215 homes sold in May 2022. However, sales had a month-over-month increase of 35.5% from April, making it the most active single-family home sale market since September. Despite that increase, last month was the slowest May on record for home sales.
Condominium sales performed similarly last month, with a 23.6% decline from a year earlier, with 908 condos sold compared to 1,108 in May 2022, marking the month’s lowest sales since 2020.
Alison Socha, GBAR president and an agent with Leading Edge Real Estate in Melrose, said although sales volume remains light by historic standards, they’ve seen a steady increase in buyer interest and urgency as spring has gone on.
“In March we saw the first substantial influx of new inventory since last fall, and that fact, along with slightly more favorable mortgage rates, attracted many buyers back into the market,” Socha said. “Unfortunately, we haven’t had nearly enough listings to meet the increased demand, so the market has been unable to keep pace with the sales activity of recent years.”
Home values on the rise
Selling prices increased both annually and on a monthly basis in May.
The median selling price of a single-family home reached a new all-time high in May, rising 2.9% to $900,000 to surpass June 2022’s record high of $899,950.
The median selling price for condominiums also set a new monthly record last month, rising 3.7% from $700,000 a year earlier to $726,002.
“The small amount of price softening that occurred over the previous three quarters has dissipated now that this year’s spring market has heated up,” Socha said. “Buyers have had more than half a year to adjust to 6% mortgage rates, and though some have had to delay or postpone their home searches, many others are moving forward even as prices have reached new peaks, which illustrates the strength of the local housing market and favorable buyer demographics.”
It’s the lack of available listings that’s keeping prices high.
There was only a one-and-a-half to two-month supply of homes for sale at the end of May, which mirrors inventory from a year ago but is still not enough to satisfy current demand.
Active listings of single-family homes in May improved 4.6% from 1,335 last year to 1,397. Condo listings, however, declined, falling 1% from 1,899 last May to 1,881 last month.
Socha says sellers will continue to benefit from that limited inventory environment.
“With listings at a premium, we’re seeing multiple offers, the waiving of contingencies and sales above asking price occurring with increased regularity, and that’s making the market more competitive and placing additional upward pressure on prices,” she said. “Additionally, with many homeowners unwilling to sell and take on a higher interest mortgage, it has exacerbated our already tight housing supply, allowing those who do list their home for sale the opportunity to command top dollar.”
The report also found that since the end of last year, time on market continues to steadily decrease with single-family homes listed for a median of 14 days in May, compared to 34 in December, and condominiums staying on for 19 days, compared to 41 days in December.
The sold-to-list price ratio also improved in May for the third month in a row, according to the report, which found the typical single-family home sold for 103.6% of its asking price. Condominiums fared similarly, selling for 100.9% of the original asking price last month.
“For those thinking of selling, market conditions should remain favorable for doing so this summer,” Socha said. “We continue to see strong pent-up demand, especially among millennials who are eager to start building equity and young families seeking a larger home and outdoor living space, which should keep buyer traffic steady for many months to come.”