The number of home sales across Massachusetts took another hit last month – typically the heart of the busy spring homebuying season – as prices for single-family homes hit an all-time high according to new data from The Warren Group, publisher of Banker & Tradesman.
Last month, there were 3,862 single-family home sales in Massachusetts, a 14.8 percent decrease from April 2021 when there were 4,531 transactions. Meanwhile, the median single-family sale price increased 9.8 percent on a year-over-year basis to $560,000, up from $510,000 in April 2021
Year-to-date, there have been 13,580 single-family home sales in Massachusetts, an 11.1 percent decrease from the first four months of 2021. Meanwhile, the year-to-date median single-family home price increased 9.7 percent on the same basis to $510,000.
“The median single-family home price of $560,000 marked a new all-time high for Massachusetts,” Tim Warren, CEO of The Warren Group, said in a statement. “Under normal conditions, this would be a reason to celebrate, but only if you currently own a home and you’re looking to sell and don’t need to buy a new home. With such limited inventory – not only across Massachusetts, but also across the country – finding that next place to live will prove to be challenging. Meanwhile, as interest rates continue to increase, buyers will continue to expand their searches to more rural communities – adding even more competition in markets that have historically been more affordable.”
In the face of rising average mortgage interest rates, which rose from 4.67 percent to 5.1 percent over the course of the month according to Freddie Mac, and rising prices some buyers are adapting, said Massachusetts Association of Realtors 2022 President Dawn Ruffini.
“Buyers are shifting to whatever they can buy. In a town, if it’s easier – than there’s more available inventory for a condo, they’re being flexible,” she said, but noted that many buyers she works with at her RE/MAX Connections brokerage in Wilbraham haven’t yet turned to different financing options, like adjustable-rate mortgages or buying down points on their interest rate.
There were 2,149 condominium sales in April 2022, compared to 2,534 in April 2021 – a 15.2 percent decrease on a year-over-year basis, The Warren Group said. Meanwhile, the median sale price increased 11.6 percent on a year-over-year basis to $530,000 – a new all-time high for condos and an increase Warren described as “taking off like a rocket.”
Year-to-date, there have been 4,490 condo sales, a 17.2 percent decrease from the first three months of 2021 with a median sale price of $450,000, a 5.9 percent increase on the same basis.
While March saw hopeful signs as numbers of new listings slipped only slightly from the previous March, April’s inventory picture soured.
Only 5,883 new single-family home listings and 2,716 new condo listings hit the market, an 11.6 percent and 20.3 percent decline, respectively, MAR reported. Single-family inventory for the month sat at 3,819 – 27.1 percent down from last April – while condo inventory collapsed 37.3 percent, to 2,212 units for sale across a state of nearly 7 million people.
Rapid increases in interest rates, inflation and uncertainty brought on by Russia’s invasion of Ukraine could have encouraged some sellers to stay off the market, Ruffini said.
I have been hoping that the April numbers would show a more moderate decline, but they didn’t. It looks like April people thought, “Maybe we’ll wait a month.” A lot of agents across the state feel like they’ve had a lot of people waiting in the wings. May seems to be the month that people were going to sell,” she said.
In the end, though, Ruffini said the state’s housing market will only be able to get out of the pickle its in if towns and cities start allowing more homes to be built by rezoning areas for multifamily buildings big and small.
“The main issue we have right now that we have an overall shortage of housing. We have a supply and demand issue and the best way to deal with that is to create more supply,” she said. “The Millennial generation is now at ana age where they don’t want to live at home anymore…even in my household we’re looking at going from one household to four [as her children reach their 20s].”
The Greater Boston area’s large increase in tech and biotech jobs over the last few years has helped fuel demand by bringing more residents in and boosting others’ paychecks, Ruffini said.
