The median sale price of a home in Massachusetts topped $900,000 in July, breaking records, despite softening demand and rising mortgage rates.

July’s median sale price for both single-family homes and condominiums rose 8% year over year, even as July saw the lowest level of activity for the month in nearly 12 years, according to the Greater Boston Association of Realtors (GBAR) July housing report. 

The median sales price of a single-family home in July rose to an all-time monthly high last month to $910,000, up 8.3% from July 2022’s $840,000, topping May 2023’s previous record high of $900.000. Sales prices also improved month over month, up 2.2% from June. 

The condominium median sale prices also set a new record in July of $735,000, up 7.8% from last year’s $682,000. Despite setting a new July record, prices were down 1.3% from their June 2023 record high of $745,000.  

“Prices have held up quite well in the face of declining sales activity mostly due to the fact competition in the market has become more heated as the number of listings has shrunk,” said GBAR President Alison Socha. “With fewer properties available for sale, sellers are taking advantage by commanding top dollar. We’re also seeing more multiple offer situations and sales over asking price which is putting additional upward pressure on prices.”  

The latest report indicates prices have recovered nicely after several months of softening. 

Socha said there’s been a steady rebound in prices this spring and summer, allowing most sellers to regain any equity they may have lost as the market cooled late last year. 

“For those looking to move up or trade down, the current period of low inventory and high prices offers a real opportunity to capitalize on the market’s strength,” Socha said.

A sluggish buying season

Year over year, sales of both single-family homes and condominiums declined in July. Socha said Greater Boston hasn’t “experienced a buying season this sluggish, with sales so hard to come by, since we were emerging from the Great Recession.”

In July, single-family home sales fell 23.4% year over year, with 1,063 homes sold, compared to 1,387 homes sold in July 2022. Sales also slid month-over-month, falling 20.3% from June, making it the slowest July for single-family home sales since 2010. July also marked the 14th month in a row single-family home sales fell on an annual basis. 

Condominium sales saw a 16.7% decline from a year earlier, with 927 units sold, compared to 1,113 in July 2022. Month-over-month sales fell 15.1%, marking the slowest July for condo sales since 2011. July was the 20th month in a row condo sales declined on an annual basis. 

“This year has been especially frustrating for prospective buyers because inventory levels have been so limited,” Socha said. “And to make matters worse, purchasing power has declined since the spring due to higher mortgage rates, which has further reduced the opportunities to buy and diminished the overall buyer pool, creating weaker demand in recent months.”

Inventory still not meeting demand

Inventory continues to not be able to keep up with demand and July was no exception. 

At the end of the month, there was only a one- to two-month supply of properties for sale, which the report noted was better than June, but not enough to meet current demand. 

Active listings of single-family homes in July declined 30% from 1,700 last year to 1,193. Condo listings also declined, falling 20% from 2,065 last July to 1,652 last month. 

Month over month, new listings also declined as single-family home listings fell 25% from June and condo listings fell 18%. 

“The lack of inventory along with today’s higher mortgage rates has not only handcuffed home buyers, it’s created indecision on the part of prospective sellers too,” Socha said. “Many owners are opting to stay put rather than sell over concerns they’ll be unable to find a new place to live or have to pay a higher rate loan, and that’s keeping properties off the market.” 

Competition increases

Sellers are in the driver’s seat with the shortage of listings as limited inventory continues to drive up competition. July’s sold-to-list-price ratio reached or exceeded 100% for the fourth month in a row, according to the report. 

In July, the typical single-family home sold for 103.4% of its asking price, while a typical condo sold for 100.4% above the original price. 

“Even as the market has cooled, many sellers are getting their asking price and accepting an offer in just three weeks’ time,” Socha said.

The report also found that time on market continues to decrease as it has since the end of last year. 

Single-family homes listed for a median of 20 days, compared to 34 in December, and condominiums stayed on the market for 21 days, compared to 41 days in December.