Lagging inventory has competition heating up in the Greater Boston housing market as supply continues to be unable to keep up with increased buyer demand, according to the Greater Boston Association of REALTORS (GBAR) June housing report. 

While June’s single-family home and condo sales fell to the lowest they’ve been for the month of June in three years, they did manage to rise from May, as mortgage rates fell below 6.5%, GBAR’s data showed. 

In June, single-family home sales fell 23.4% year over year, with 1,310 homes sold, compared to 1,711 homes sold in June 2022. However, sales had a month-over-month increase of 41.5% from May, making it the most active month for single-family home sales since September. 

Condominium sales saw a 24.6% decline from a year earlier, with 1,070 units sold, compared to 1,419 in May 2022. While GBAR found it was the slowest June for condo sales since 2020, it still represented the most condo sales in 10 months. 

GBAR president Alison Socha said despite slow but steady improvements in demand in the spring, sales activity remains suppressed by the fact there are so few listings on the market. 

“Buyers have increasingly come to accept the reality of higher mortgage rates, but the reduced purchasing power they’re experiencing as a result of today’s elevated selling prices and financing costs, along with the small number of properties available to buy, has slowed the home search process and dissuaded some from entering the market altogether,” she said.

Home values strengthen

Despite softening sales over the past year, that extremely tight housing supply has strengthened home values. June’s median selling price for single-family homes and condominiums reached an all-time high. 

The median selling price of a single-family home rose to $900,000, topping June 2022’s record high of $899,950. Month over month, it remained unchanged. 

Meanwhile, the median selling price for condominiums also set a new monthly record for the second month in a row, rising 6.4% from $700,000 a year earlier to $745,000. Condo prices were also up 2.8% from May, which set a record high of $725,002. 

“Even though the buyer pool is not nearly as large this year as the previous two springs, sellers are continuing to reap the benefits of today’s limited inventory environment,” said Socha. “With fewer options for buyers to choose from, we’re again 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 putting additional upward pressure on prices.” 

Socha said there’s been a healthy rebound in sales prices, allowing sellers to regain any equity they may have lost as the market cooled last fall and winter. 

“For those in the position to move up or trade down, the current period of low inventory and high prices may provide an ideal opportunity to do so,” she said.

There was a less than two months supply of homes for sale at the end of June, which was less than in May and still not enough to satisfy current demand.

Active listings of single-family homes in June declined 28% from 1,756 last year to 1,266. Condo listings also declined, falling 16% from 2,132 last June to 1,775 last month. 

Socha said today’s higher interest rates are affecting participants on both sides of a home sale. 

“Today’s higher interest rates are not only affecting home buyers, but prospective sellers too, as many have opted to stay in their current home rather than sell and take on a new higher-rate loan, and that’s further fueling price gains,” Socha said. 

The sold-to-list price ratio held steady in June for the fourth month in a row, according to the report, which found the typical single-family home sold for 104.5% of its asking price. Condominiums fared similarly, selling for 101% of the original asking price last month.

The report also found that since the end of last year, time on market has continued to steadily decrease, and in June, it was half of what it was at the end of last year. Single-family homes listed for a median of 16 days, compared to 34 in December, and condominiums stayed on the market for 20 days, compared to 41 days in December.