Boston’s housing market remains competitive, despite slower sales MABA MassachusettsRealEstate MaBuyerAgent FirstTimeHomeBuyers

Boston’s housing market remained competitive last month, despite a slower pace of transactions, according to the Greater Boston Association of REALTORS (GBAR) May housing report. May single-family home and condominium sales fell to a three-year low as supply continued to be unable to keep up with demand. Sales did, however, rise from April as new inventory hit the market and increased median sale prices by three percent, another record high, GBAR’s report found. In May, single-family home sales fell twenty four point four percent year over year, with nine hundred and nineteen 919 homes sold, compared to 1,215 homes sold in May 2022.

However, sales had a month-over-month increase of thirty five point five percent from April, making it the most active single family home sale market since September. Despite that increase, last month was the slowest May on record for home sales. Condominium sales performed similarly last month, with a twenty three point six percent decline from a year earlier, with nine hundred and eight condos sold compared to one thousand one hundred and eight in May 2022, marking the month’s lowest sales since 2020. Alison Socha, GBAR president and an agent with Leading Edge Real Estate in Melrose, said although sales volume remains light by historic standards, they’ve seen a steady increase in buyer interest and urgency as spring has gone on.

“In March we saw the first substantial influx of new inventory since last fall, and that fact, along with slightly more favorable mortgage rates, attracted many buyers back into the market,” Socha said. “Unfortunately, we haven’t had nearly enough listings to meet the increased demand, so the market has been unable to keep pace with the sales activity of recent years.” Home values on the rise selling prices increased both annually and on a monthly basis in May. The median selling price of a single-family home reached a new all-time high in May, rising two point nine percent to $900,000 to surpass June 2022’s record high of $899,950. The median selling price for condominiums also set a new monthly record last month, rising three point seven percent from $700,000 a year earlier to $726,002. “The small amount of price softening that occurred over the previous three quarters has dissipated now that this year’s spring market has heated up,” Socha said.

“Buyers have had more than half a year to adjust to six percent mortgage rates, and though some have had to delay or postpone their home searches, many others are moving forward even as prices have reached new peaks, which illustrates the strength of the local housing market and favorable buyer demographics.” It’s the lack of available listings that’s keeping prices high. There was only a one-and-a-half to two-month supply of homes for sale at the end of May, which mirrors inventory from a year ago but is still not enough to satisfy current demand. Active listings of single-family homes in May improved four point six percent from one thousand three hundred and thirty five last year to one thousand three hundred and ninety seven. Condo listings, however, declined, falling one percent from one thousand eight hundred and ninety nine last May to one thousand eight hundred and eighty one last month. Socha says sellers will continue to benefit from that limited inventory environment.

“With listings at a premium, we’re seeing multiple offers, the waiving of contingencies and sales above asking price occurring with increased regularity, and that’s making the market more competitive and placing additional upward pressure on prices,” she said. “Additionally, with many homeowners unwilling to sell and take on a higher interest mortgage, it has exacerbated our already tight housing supply, allowing those who do list their home for sale the opportunity to command top dollar.” The report also found that since the end of last year, time on market continues to steadily decrease with single-family homes listed for a median of fourteen days in May, compared to thirty four in December, and condominiums staying on for nineteen days, compared to forty one days in December.

The sold-to-list price ratio also improved in May for the third month in a row, according to the report, which found the typical single-family home sold for one hundred and three point six percent of its asking price. Condominiums fared similarly, selling for one hundred point nine percent of the original asking price last month. “For those thinking of selling, market conditions should remain favorable for doing so this summer,” Socha said. “We continue to see strong pent-up demand, especially among millennials who are eager to start building equity and young families seeking a larger home and outdoor living space, which should keep buyer traffic steady for many months to come.”

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