Despite a summer marked by falling mortgage rates and increased inventory, homebuying activity in Greater Boston has cooled since late spring, according to the Greater Boston Association of Realtors® (GBAR) August housing report.
The cooling trend resulted in fewer home sales and a softening of prices throughout August. It didn’t, however, impact the condo market, which last month saw sales climb modestly.
Nevertheless, the median selling prices of single-family homes and condominiums declined for the second consecutive month, following June’s record highs. According to GBAR, this trend highlights ongoing affordability concerns, particularly for first-time and entry-level buyers.
August single-family home sales fell 4% year over year, with 1,055 homes sold, compared to 1,099 homes sold in August 2023, reflecting the lowest single-family home-sales volume for the month since 2010. Sales also declined month over month, at a more significant number, down 14.6% from July.
Condo sales, meanwhile, increased last month, rising 2%, with 820 units sold compared to 804 last August. Month-over-month, however, condo sales slowed, falling 13.4% from July.
Jared Wilk, GBAR president and a broker with COMPASS in Wellesley, said quite a few buyers opted to take a break from the market near the end of the school year as mortgage rates topped 7% and selling prices reached record highs in June, causing the market to lose some of its momentum.
“Buyers are showing a little less sense of urgency and are being more selective in their home search of late, with many taking a wait-and-see attitude in the hopes the Fed lowers interest rates or prices decline due to a weakening economy. That’s resulted in softening demand this summer,” he said.
In both the single-family home and condominium markets, median selling prices continued to rise year over year in August. However, these prices have moderated since the spring and are now at their lowest levels since March and April.
August’s median single-family home price rose 4.3% to $915,000 from August 2023’s $877,000. It was the 14th consecutive month of year-over-year growth in the median single-family home price. Month over month, the August median home price slid 0.5% from July. According to the report, the monthly median selling price for single-family homes hasn’t been this low since March, when it was $900,500.
The median condo selling price last month also increased 2.7% to $702,000 from last year’s $683,750. The report noted that August was the third month in a row condo prices rose on an annual basis. Month over month condo sales dropped 5.1% from July. The last time the condominium median selling price was lower was in April when the median was $700,500.
“Even though demand has cooled in the last few months, buyers still outnumber property listings in many communities and that imbalance continues to keep upward pressure on prices,” Wilk said. “The lack of inventory is most pronounced in the single-family home market where listings remain at less than a two-month supply, which is why properties that are well maintained and in a desirable location have been able to retain their value and even command close to top dollar.”
Last month, the majority of properties sold at or above their full asking price. Single-family homes typically sold for 101% of their original list price, while condominiums garnered 99.4% of their initial sale price.
Wilk said with buyers now fewer and further between than what we saw this spring, it’s a less competitive market and that’s resulted in some softening in prices.
“In today’s market, we’re seeing fewer multiple-offer situations, more bids under asking price, and homes taking longer to sell. That’s giving buyers more of an opportunity to negotiate and sellers have had to become more flexible, with an increasing number having to make price adjustments in order to sell,” Wilk said.
Market conditions could continue into the fall market, with more inventory giving potential buyers a larger selection of homes to choose from.
Active single-family home listings increased in August, rising 15% year over year, while active condo listings rose 11.3%. And listings keep growing.
From Labor Day weekend until Sept. 16, GBAR said single-family home listings rose 44% and condo sales rose 34%.
Wilk cautioned sellers not to be too aggressive with their pricing, as it could limit buyer interest.
“Many of today’s buyers have been in the market for months, if not years, so they know a property that’s overpriced when they see it,” he said. “On top of that, with purchasing power more limited, few are willing to overextend themselves financially.
“As a result, we’re finding that properties that get priced too aggressively often draw fewer offers, including less attractive ones, and many don’t sell until a price reduction or seller concession is made. 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.”