Real estate activity in Greater Boston slowed last month as buyers held off on home purchases due to uneasiness about the upcoming presidential election and expectations of interest rate cuts, the Greater Boston Association of Realtors® (GBAR) reported.

Sales of both single-family homes and condominiums declined year over year for the second consecutive month, while monthly median selling prices decreased for the third month in a row, reaching their lowest level since February, according to the GBAR September housing report.

September single-family home sales fell 1.3% year over year, with 744 homes sold, compared to 754 homes sold in September 2023. Sales also declined month over month by 30%, marking the fewest homes sold in any month since March, reflecting the lowest single-family homes sales volume for a September since 1995.

Condo sales also declined, falling 10.6%, with 630 units sold compared to 705 last September. Condo sales also slowed month over month, falling 24% from August. Last month marked the slowest month for condo sales since February and the lowest total sales for the month since 2010. 

“There was a noticeable lull in market activity over the final weeks of the summer, as many buyers opted to delay their home purchase decision until after the Fed moved to lower interest rates, while others have grown more skittish and adopted a wait-and-see attitude as the presidential election approaches. That’s resulted in a smaller buyer pool and decidedly slower sales pace since the start of September,” said Jared Wilk, GBAR president and a broker with Compass in Wellesley. 

“We’ve also seen a sharp increase in listings since the Labor Day weekend, which has afforded buyers more time and a greater selection of homes to choose from, so they’re acting with less urgency than they did earlier in the year.”  

The increase in inventory led to some softening in median selling prices last month. 

September’s median single-family home price remained flat over the past 12 months and fell 7.4% to $850,00 from August’s $917,500, marking the first time in 15 months that the median single-family home price did not rise year over year. September also marked the third month in a row single-family home prices fell month over month since reaching June’s all-time high. The report also noted that the median single-family home price is now the lowest it’s been since February.

Meanwhile, the median condo selling price last month had a modest decrease from last year, falling 1.7% to $673,500 from last year’s $685,000. Month over month condo selling prices dropped 4.2% from August. The last time the condominium median selling price was in February, when it was $639,900. September also marked the third month in a row condo prices fell month over month since peaking in June. 

“With fewer buyers in the market over the last couple of months and a more plentiful supply of homes and condos now available for sale, we’re not seeing as much upward pressure on prices,” Wilk said. “Today’s buyers are not only  finding more opportunity to negotiate, but with mortgage rates down about a half point since late spring and a full point from a year ago, purchasing power has improved, making the market moderately more affordable.”

Inventory continues to rise

GBAR noted that inventory of single-family homes and condominiums is at its highest level in three years.

Active single-family home listings increased in September, rising 23% year over year, while active condo listings rose 23.5%. 

The increase in listings had little impact on closed prices. 

Last month, the majority of properties sold at or close to their full asking price. Single-family homes typically sold for 99.3% of their original list price, while condominiums garnered 98.8% of their initial sale price.

“Sellers still hold the upper hand in this market, but not to the extent they did previously,” Wilk said. “With more inventory to choose from, buyers are now able to be more selective, which makes it essential that pricing reflect current market conditions. It’s mostly properties that are priced right and in excellent condition that are selling for top dollar in today’s market.” 

Wilk did caution homeowners to not be too aggressive when pricing their properties as it could limit interest. 

“With the prime selling season behind us and sales activity having become more seasonal of late, we’re seeing fewer multiple offer situations, more bids below asking price and lengthier listing times before properties go under agreement,” he said. 

“In addition, properties that are overpriced will attract a more limited pool of qualified buyers and often require a price reduction or other seller concession in order to sell. As a result, 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.”