The Greater Boston housing market experienced its second month in a row of increased listings in February, bolstering buyer demand as the spring market got underway, according to the Greater Boston Association of Realtors (GBAR) February housing report.

Single-family listings rose from last year for the second month in a row and condo sales rose for the first time in more than two years. The report also noted that median selling prices showed positive gains from last year. 

February single-family home sales grew 8.8% year over year, with 457 homes sold, compared to 420 homes sold in February 2023, marking the second annual increase in sales since May of 2022 and the first time since June and July 2021 that sales increased annually two months in a row. The report found that month-over-month home sales did decelerate, dropping by 12.3% from January, which is not unusual. February, being a shorter month, typically has fewer closings.

Condominium sales also rose last month, up 2% from a year earlier, with 456 units sold, compared to 447 last year, marking the first time in 27 months that condo sales rose on an annual basis. 

GBAR president Jared Wilk, a broker with Compass in Wellesley, said this year’s spring market had an earlier and stronger start compared to last year due to more listings and more attractive interest rates. 

“There’s a lot of pent-up demand that’s built up in the past 12-18 months, and most buyers appear serious and ready to buy,” he said. “They’ve grown comfortable with where rates are at, but are tired of losing out on other offers, so they’re motivated and that’s led to more showings, increased foot traffic at open houses and a higher volume of sales activity.”

While there is more supply than buyers have seen in quite some time, the current inventory of homes and condos still isn’t enough to match the increase in buyer demand. 

February’s median single-family home price set a new record for the month, up 12.4% to $785,000 from February 2023’s $700.000. Median condo prices also rose, increasing 7.8% to $689,950 from last February’s $639,900. 

Single-family home sale prices moderated in February, falling 4.3% month over month from $820,000 in January, which the report said is due to fewer homes selling last month valued at $1 million or more. Condo prices, however, remained mostly unchanged, rising 0.7% from January’s $685,000.

“While inventory levels have improved, we still have far more buyers than properties to sell and that’s the primary factor driving the steady appreciation in home values,” Wilk said. “Sellers have become more aggressive in their pricing since the start of the year, while buyers are being faced with more multiple-offer situations and many are opting to bid above the list price in an effort to buy a home, and all of this is pushing selling prices higher.” 

Last month, the majority of properties sold at or near their full asking price. Single-family homes typically sold for 100.2% of their original list price, while condominiums garnered 99.5% of their initial sales price.

“It’s still a seller’s market, so we expect little in the way of price softening this spring, but that hasn’t deterred buyers from entering the market,” said Wilk. “Mortgage rates have eased since last fall, and that’s helped to improve purchasing power. In addition, inventory levels historically increase steadily from now until June, which will provide buyers more opportunity and choice when looking for a home over the next several months.”

Home, condo inventory increases

Residential inventory rose month over month for the second month in a row in February, which also marked the first time both single-family home and condo listings showed annual improvement in the same month since last March. Active single-family home listings rose 21% from January, while active condo listings grew 17%. 

“With spring right around the corner, buyer enthusiasm is high, and it’s only going to get stronger if the anticipated rate cut by the Fed materializes,” Wilk said. “If that happens, we’re hopeful more sellers will be willing to list their home for sale, which in turn could relieve some of the upward pressure on prices and spur more sales activity, allowing the market to rebound faster. We’re poised to have the strongest spring market since 2021 provided we have more listings to meet the buyer demand.”