The coming weeks and months present a challenge to reporters and editors covering the Massachusetts real estate market: How do you characterize a slackening of the pace at which home prices rise?
After 18 months of precipitous price jumps, this summer saw hints that the speed of those increases was slowing down. A number of prospective buyers, industry sources told Banker & Tradesman, seemed to take the summer off, whether that was due to fatigue after too many failed offers or the chance to have something like a “normal” vacation season.
With numbers of new single-family listings hitting the market statewide this summer staying broadly in line with 2019’s figures, that meant homes sat on the market for just a bit longer, spreading out demand ever so slightly among a greater number of homes. And the percentage of the statewide combined condominium and single-family inventory that’s gone pending each week has consistently been below 25 percent since late June, according to Lamacchia Realty – a historically high number, but significantly below the 30 percent to 40 percent range seen this spring and more in line with mid-2020.
But as Jay Fitzgerald details in this week’s issue, this dynamic has hardly been enough to dampen price increases. At $506,375 as of July 31, the year-to-date median single-family home price is 27 percent higher than it was in July 2019, while the median condo price is 21 percent up over the same period, at $460,000.
The vocabulary journalists choose when covering these trends has to be carefully considered in the context of the Great Recession. In any given year, most Bay Staters are not involved in the real estate market. They are not familiar with the month-to-month vagaries of home sale prices, seasonal variations in buyer behavior, or the finer points of housing market analysis.
The wild home value swings of the 2000s and early 2010s were a formative experience for many people’s understanding of the real estate market. So, when they hear the TV news anchor introduce a segment by saying that the housing market is “weakening” or “cooling” following months of a hyperventilating market, many are naturally going to fear a crash is imminent. A perusal of recent content produced by social media influencers, with post titles like “The Market Already Crashed. You Just Don’t Know It Yet” and “Housing Bubble 2.0 – The Housing Crash Has Begun,” show that those who pay the closest attention to consumer psychology indicators like web search trends are well aware of these anxieties.
In times like this, it’s incumbent on any reporter, editor or producer covering home prices to foreground just how much market power sellers still have and just how well-qualified today’s buyers are.
So, we urge our peers to lean into the details, and resist the urge to sensationalize small shifts in the market out of fear they’ll miss the early signs of a trend. The only thing worse than a market panic is one sparked by accidental falsehoods.
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