Homebuying activity continued to fall throughout Greater Boston last month, as rising mortgage rates, increased consumer anxiety and buyer fatigue continue to weaken demand, according to the Greater Boston Association of Realtors (GBAR) September housing report.
In September, single-family home sales fell 32.3% year over year, with 752 homes sold, compared to 1,110 homes sold in September 2022. Sales fell 31.6% month over month, marking the slowest September for single-family home sales since 1995. September also marked the 16th month in a row single-family home sales fell on an annual basis.
Condominium sales saw an 8.4% decline from a year earlier, with 686 units sold, compared to 749 in September 2022. Month-over-month sales fell 14.1%, marking the weakest September for condo sales since 2002. September was also the 22nd month in a row condo sales declined on an annual basis.
Alison Socha, GBAR president and an agent with Leading Edge Real Estate in Melrose, attributes the declines to economic concerns.
“Economic forces have been weighing down the market for much of the summer which has caused an increasing number of buyers to stop looking, or at least pause their home search,” Socha said. “With interest rates climbing, selling prices still close to record high and inventory levels at their lowest point in over two decades, few are in a rush to buy. Instead, many are choosing to sit tight until more homes come on the market that meet their budget or mortgage rates and prices come down, and that’s led to slower sales.”
Despite the decline in activity, home values continued to rise from last year, although they declined month over month after receiving a boost in listings.
Median sale prices of both single-family homes and condominiums hit record highs last month.
The median sales price of a single-family home in September rose to $849,950, up 11.7% from September 2022’s $761,000. Condominium sale prices also rose, climbing to $680,500, up 8% from last September’s $630,000.
Socha says the market remains very competitive even though mortgage rates have risen to their highest level in more than 20 years.
“With so few properties listed for sale this summer, sellers were eager to seek top dollar, while many homebuyers found themselves bidding against one another in multiple offer situations, and that has helped to support steady price gains over the past year,” Socha said. “In addition, many of those buying in today’s market have accumulated the equity and savings necessary to do so in a higher interest rate and home price environment, thus allowing price growth to continue.”
On the inventory front, there was some marked improvement in September.
At the end of September, there was a two- to three-month supply of properties for sale, up from one to two months of inventory over the past three months.
Active listings of single-family homes in September declined 20% from 1,812 last year to 1,439.
Condo listings also declined, falling 14% from 2,178 last September to 1,873 last month.
“With more buyers getting priced out as mortgage rates climb and a healthy dose of new listings coming on the market since Labor Day, we’re starting to see sellers adjust their expectations and be a bit more flexible on price,” Socha said. “As a result there’s more room for negotiation, and sales prices have slowly begun to come down from their peak highs of earlier this summer. Even so, there’s still plenty of demand to keep prices from dropping sharply.”