While we wish January’s home sales statistics could offer better news in the depths of this slushy winter, this week’s issue of Banker & Tradesman comes bearing bad news for homebuyers.
According to data from our publisher, real estate analytics firm The Warren Group, Massachusetts single-family and condominium prices reached all-time highs for the month of January as the pace of sales slowed even further. In January 2019, 3,230 single-family homes and 1,250 condominiums were sold.
Statewide, the number of single-family sales last month dropped by 10.2 percent compared to January 2018. Those numbers are also down 11.5 percent compared to January 2017. January condo sales were likewise down 13.3 percent from January 2018 and 14.7 percent from January 2017.
As The Warren Group’s CEO Tim Warren pointed out in his announcement of the statistics, these are the lowest numbers of sales since 2015, when the state housing market was finishing straightening its hair, putting its left shoe back on and smoothing out the wrinkles in its suit after taking a tumble in 2008 and 2009.
This decline in the number of sales, and the corresponding upward pressure on prices – the statewide median sale price for a single-family home in January was $367,000, a 4.9 percent jump over January 2018, while the median condominium sale price was an all-time January record of $354,600 – can’t be attributed to any one region or community.
Across the board, the number of sales contracted little by little. In Middlesex County, the state’s most populous, single-family sales were down by 42, or 6.3 percent when comparing January 2018 to January 2019. In Worcester County, they dropped by 80, or 14.6 percent. In Plymouth County, they were down by 50, or 12.8 percent. While some places saw a jump in numbers of sales, most saw slight declines – five here, seven there.
By these drips and drops, Eastern Massachusetts slowly loses what semblance of housing affordability it still has.
There are only so many people who can afford a $417,500 house on the North Shore or a $525,000 house between Route 128 and Interstate 495 – the January median prices in Essex County and Middlesex County, respectively – and the data show Massachusetts prices may be slouching towards a point where far fewer buyers are willing – or able – to pay.
Realtors and sellers should be just as concerned by this state of affairs as the rest of the state. Median household income in Massachusetts may have been $77,385 in 2017, the most recent year in which data was available, but it is not increasing as fast as home prices in many communities.
One house’s sky-high Zestimate might make its owners feel flush in the moment, but in the aggregate these high prices are pushing more and more prospective homebuyers out of the market. As many have been asking since Massachusetts came roaring back from the Great Recession: How much longer can this go on?