In July, Greater Boston saw a significant rebound in single-family home sales compared to last year. Lower mortgage rates, more available listings and a dip in home prices from June’s record highs drew buyers back into the market, according to the Greater Boston Association of Realtors® (GBAR) July housing report.
Despite the rebound in single-family home sales, the condominium market activity remained relatively unchanged from last year.
However, buyers took advantage of greater purchasing power, leading to a modest rise in median selling prices from last year in both the single-family home and condo markets.
July single-family home sales increased 14.7% year over year with 1,226 homes sold, compared to 1,069 homes sold in July 2023, reflecting the largest gain in single-family home sales volume for the month since 2021. Sales also improved month over month, up 0.3% from June.
Condo sales took a dip last month, falling 1.2% with 934 units sold compared to 945 last July, marking the fewest condo sales in the month of July since 2011. Month-over-month condo sales also slowed, down 2.8% from June.
Jared Wilk, GBAR president and a broker with COMPASS in Wellesley, said there’s no denying that sales activity continues to lag behind historic norms, but it’s also worth noting that “last month was the busiest one we’ve had for home and condo closings in more than a year.”
“Buyers have a larger selection of homes to choose from than they did last summer, and with mortgage rates lower than they were this spring, the market has become increasingly more inviting to those looking to buy,” Wilk said. “Prices also have eased a bit from their peak over the past month, which suggests buyers are finding more room for negotiation, and that’s giving many a renewed sense of optimism as we approach the fall market.”
In both the single-family home and condominium markets, median selling prices saw a slight annual increase in July. However, these prices dipped from the record highs set in June.
July’s median single-family home price set a new record for the month, appreciating 1.6% to $925,000 from July 2023’s $910,000. It was the 13th consecutive month of year-over-year growth in the median single-family home price. However, GBAR highlighted that last month’s increase was the smallest percentage gain during this stretch. Month over month, the July median home price slid 3.6% from its June peak of $960,000.
The median condo selling price last month remained nearly flat from last year’s $738,000, up 0.3% to $740,000, still setting a new high for the month. The report noted that July was only the fourth month this year condo prices rose on an annual basis. Month-over-month condo prices fell 1.3% from their peak of $750,000 in June.
“Although buyer demand has been slowed by higher interest rates, it continues to outpace the supply of homes for sale, and that imbalance has kept upward pressure on selling prices and allowed for continued price appreciation,” Wilk said.
There are signs that prices may have peaked for now, as median selling prices dropped in July compared to the record highs set in June.
Wilk said what we are experiencing now is not “price correction but rather a softening in prices.”
“With the prime selling season behind us, we’re seeing fewer bidding wars, more offers under asking price and homes that are taking longer to sell,” Wilk said. “As a result, sellers have become more flexible, with some agreeing to price reductions in order to sell.”
Last month, the majority of properties sold at or above their full asking price. Single-family homes typically sold for 103.1% of their original list price, while condominiums garnered 100.1% of their initial sale price.
Despite sellers continuing to have the upper hand, Wilk cautioned homeowners against overpricing their homes because it could shrink the pool of potential buyers.
“In today’s higher interest rate environment, many buyers are either unable or unwilling to overextend themselves financially,” Wilk said. “They’re choosing to be more cautious and act with less urgency, so sellers who overprice their property run the risk of making price adjustments and other concessions, as well as watching their home take longer to sell than desired.”
“Those who are able to adjust their expectations and price their property in line with others currently listed for sale will have the most success in this market.”
Despite limited inventory, the number of homes and condos for sale in July continued to rise steadily from last year.
Active single-family home listings increased in July, rising 30% year over year, while active condo listings rose 19%.
“If we get the normal annual influx of new listings that occurs around Labor Day, and the Fed keeps its promise to lower interest rates, it’s almost certain more buyers will be back in the market soon, giving us an active fall season,” Wilk said.