As home sales across Greater Boston stalled in August due to declining inventory continuing to plague the market, median sale prices for both homes and condos remained strong, according to the Greater Boston Association of Realtors (GBAR) August housing report.
GBAR found the housing market continues to be plagued by declining inventory as high mortgage rates and increased economic and job market concerns are softening demand.
Despite those setbacks, the median sale price of both single-family homes and condominiums remained strong, rising 5-6% from last year, according to the report.
The median sales price of a single-family home in August rose to $881,000, up 6.8% from August 2022’s $825,000 and topping June’s previous all-time monthly high of $745.000. Sales prices did decline month over month, down 2.3% from July’s all-time high of $910,000.
The condominium median sale prices also rose last month to $685,000, up 5.4% from last year’s $650,000. Similar to single-family homes, prices were down 6.8% from $735,000 in July and below June’s record high of $745,000.
“Despite rising mortgage rates and diminished purchasing power, we’ve seen steady price appreciation over the past year as many buyers have found themselves having to outbid one another for a shrinking number of properties for sale,” said Alison Socha, GBAR president and agent with Leading Edge Real Estate in Melrose. “Even though buyer demand is not as strong as it’s been in recent years, listings have become so scarce over the past couple of months there’s been more than enough competition to keep prices from dropping significantly.”
The latest report indicates the housing market is in a bit of a holding pattern as we head into the fall.
Socha says new listings were slow to come online this summer, causing inventory to become somewhat stale, along with economic uncertainties creating buyer hesitancy.
“We are not only seeing fewer sales, but the number of offers is also down as many buyers play the waiting game,” Socha said. “Some are holding out for more homes to be listed within their budget, while others are waiting for mortgage rates or prices to come down.”
In August, single-family home sales fell 25.9% year over year, with 1,090 homes sold, compared to 1,471 homes sold in August 2022. Sales rose month-over-month, however, jumping 1.9% from July, making it the slowest August for single-family home sales since 2010. August also marked the 15th month in a row single-family home sales fell on an annual basis.
Condominium sales saw a 23.7% decline from a year earlier, with 787 units sold, compared to 1,031 in August 2022. Month-over-month sales fell 15.8%, marking the slowest August for condo sales since 2000. August was also the 21st month in a row condo sales declined on an annual basis.
“With fewer homes on the market sellers are seizing the opportunity to ask for top dollar, and they’re frequently getting their price if the property is in excellent condition and a desirable location,” Socha said. “For those looking to move up or trade down, the current period of low inventory and high prices is an opportunity to capitalize on the market’s strength.”
Inventory is expected to continue to be an issue through the fall.
At the end of August, there was only a one- to two-month supply of properties for sale, which the report noted was well below the five to six months of inventory we’d see in a “normal, balanced market.”
Active listings of single-family homes in August declined 24% from 1,445 last year to 1,097. Condo listings also declined, falling 11.5% from 1,697 last August to 1,501 last month. Month over month, new listings also declined as single-family home listings fell 9% from July and condo listings fell 15%.
“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.”