As homebuyer activity intensified last month, the median price of a single-family home hit $900,000 across Greater Boston, according to the Greater Boston Association of Realtors (GBAR) March housing report. 

The activity was spurred by relatively stable mortgage rates and milder weather, attracting more buyers to the market.

Last month, both single-family home and condominium sales surged, up 30% to 40% from February. However, sales volume remained below what they were last year as demand continued to outweigh supply. 

In March, the median sale price of both homes and condos increased by 9% compared to the previous year.

March single-family home sales fell 3.8% year over year, with 606 homes sold, compared to 630 homes sold in March 2023, marking the lowest number of sales for the month of March in 15 years. The report found that month-over-month home sales did accelerate, up 31.5% from February, reflecting what the report called the “surge in buyer interest and activity that typically occurs as spring approaches.”

Condominium sales also dropped last month, down 9.5% from a year earlier, with 647 units sold, compared to 715, marking the fewest condos sold during the month of March since 2015. 

GBAR president Jared Wilk, a broker with COMPASS in Wellesley, said even though today’s sales pace is nothing like what we saw over the past half-dozen years, the market has been busier than anticipated in the early part of the year. 

“There’s a lot of pent-up demand from those who’ve been waiting for mortgage rates to settle down, not to mention a large pool of buyers who’ve grown frustrated from losing out on other offers, and both are motivated and ready to buy,” said Wilk. “At the same time, we lack listings, and that’s putting upward pressure on prices and creating affordability issues, especially in the entry-level market. It’s the primary reason sales activity isn’t stronger right now. We need more properties to sell.” 

March’s median single-family home and condo prices set new records for the month. The median price of a single-family home rose 9.1% to $900,000 from March 2023’s $825,000. Median condo prices also rose, increasing 8.8% to $740,000 from last March’s $680,000. 

Single-family home sale prices in March climbed 14.9% month over month from $783,000 in February, while condo prices grew from 7.4% the previous month, both reflecting strong buyer demand driving the competitive market. 

Wilk said that many homeowners are still reluctant to sell and take on a higher-rate loan. 

“Despite a slight rise in mortgage rates since January, buyer traffic has improved steadily as we’ve approached spring, but the same can’t be said for listings,” Wilk said. “Inventory remains limited in many communities, which is giving sellers the ability to be more aggressive in their pricing. On top of that, buyers are having to contend with multiple offer situations again and many are opting to bid above the list price in an effort to buy a home, and all of this is fueling the steady appreciation in home prices.” 

Last month, the majority of properties sold at or above their full asking price. Single-family homes typically sold for 102.4% of their original list price, while condominiums garnered 99.8% of their initial sales price.

“It’s unlikely we will see much in the way of price softening this spring, but there is an expectation mortgage rates will ease once the Fed moves to lower interest rates, and that should help improve buyers’ purchasing power in the coming months,” Wilk stated. “Inventory levels tend to increase steadily between now and summer as well, so buyers can expect to find a larger selection of homes to choose from and more opportunity for negotiation as they look ahead.” 

Inventory shows modest increases

Month over month, inventory rose modestly in March for the third month in a row followed by a “significant influx” of listings during the first two weeks of April, the report noted. 

Active single-family home listings rose 1.7% from February, while active condo listings grew 1.5%. 

Once the calendar turned, listings showed even more growth during the first two weeks of April, as single-family listings increased 24% and condo listings climbed from 1,300 units listed on April 1 to 1,565 listed onApril 15. 

“There’s a greater sense of optimism about the housing market today than any time in the past two years,” said Wilk. “Buyers are enthusiastic, and fewer are waiting for mortgage rates or prices to drop to move forward. Sellers also appear to be more accepting of the current interest rate environment, and many seem to be looking at the next few months as an ideal time to maximize the equity in their homes. That should make for a healthier housing market this spring.”