The Greater Boston housing market continued its turnaround last month, with single-family home sales hitting their highest level since August 2023 and condo sales reaching a 10-month high, according to a new report from the Greater Boston Association of Realtors® (GBAR).
GBAR says the market rebound is due to increased buyer activity from this spring, when mortgage rates were lower. This indicates strong pent-up demand and growing optimism in the local housing market.
May single-family home sales grew 9.3% year over year, 1,014 homes sold, compared to 928 homes sold in May 2023. Month over month, sales also rose, up 31.7%. May’s sales volume was the highest since last August. Meanwhile, May’s sales total was the fourth lowest for the month in the past 20 years.
Condominium sales were stable last month, slipping just 1.1% from a year earlier with 920 units sold, compared to 930. Month over month, condo sales improved, up 18.6%, and like May home sales, the total was the fourth lowest for the month of May in 20 years.
Jared Wilk, GBAR president and a broker with Compass in Wellesley, said that even though sales remain modest, there’s been a steady increase in market activity this spring.
“The softening in mortgage rates we saw early this year motivated many buyers to get off the fence, and that created a lot of foot traffic which continued right up to Memorial Day weekend,” Wilk said. “Compared to a year ago, there’s a lot more optimism in the market, as the economy is doing better and there’s also more inventory to choose from. As a result, buyers are much more serious and eager to buy and that’s made for a healthier market.”
Buyer interest and activity were also particularly strong last month, leading to steady price growth, according to the report.
May’s median single-family home prices set new records for the month, appreciating 5.6% to $950,500 from May 2023’s $900,000.
The condo market had some price fluctuation last month as the median condo price dropped 1.2% to $715,000 from last May’s $723,750, while also increasing 2.1% from April’s $700,500.
“It’s no surprise we’re still seeing price growth, given the imbalance that exists between supply and demand,” Wilk said. “Inventory is especially tight in the single-family home market, where listings remain at less than a two-month supply, which is why prices for detached homes have been increasing rapidly this spring.”
Competition continues to intensify, leading to increased upward pressure on prices, Wilk said.
“It’s the peak selling season, so it’s not uncommon to see multiple offers and bids over list price on homes that are priced right and well-maintained, but sellers also are being more aggressive on pricing, which is helping to drive appreciation,” Wilk said.
Last month, the majority of properties sold at or above their full asking price. Single-family homes typically sold for 104.2% of their original list price, while condominiums garnered 101% of their initial sale price.
“We have more buyers than homes to sell, which is making for a very competitive market, and sellers are taking advantage,” Wilk said. “However, some owners are being a bit overzealous in their pricing, and in those instances, we’re seeing properties sit on the market longer, receive fewer offers, and undergo a price adjustment or two in order to sell.”
Despite limited inventory, the number of homes for sale in May reached its highest level since last September.
Active single-family home listings increased in May, rising 17.1% year over year, while active condo listings fell 2.8%.
“It remains a seller’s market, but with mortgage rates still stubbornly high, prices at or near record levels, and listing inventory having improved, buyers are going to have more of a say in how the market performs in the coming months,” Wilk said. “Buyers have more choice and room for negotiation than they did earlier this spring, so they’ve been exercising patience and acting more cautiously in recent weeks, which is likely to take some bounce out of the market rebound we’ve been experiencing this spring.”
“We see little in the way of price softening however, as we have strong pent-up demand from buyers who’ve been in the market for years only to be outbid in multiple offer situations, and many millennials who are now in their peak homebuying years.”