Massachusetts home prices are breaking records again
real estate news
Sales are plummeting, and experts say, “Prospective buyers will have a hard time finding an easy route to home ownership.”
In Brockton, the price of a single-family home rose 9.3% to $480,000, but sales fell about 28%, according to The Warren Group. Lane Turner/Globe Staff/File 2020
House prices continued to rise in July. Cost increases may not be as meteoric as they have been in recent years, but the real estate market is showing no signs of burnout.
The Warren Group, a property research firm, released its monthly market round-up this morning, and the tune — a real head turner for sellers but nail on the head for buyers — feels like it’s being repeated: Home prices are breaking records. Mortgage rates have gone up. Sales are declining.
The average condo selling price in Massachusetts rose 6.5% year over year to $555,000 in July, but sales were down 14.3%.
Sales in the state’s single-family home market fell nearly 25%, but the median purchase price rose 4.3% to $610,000.
Compare that to June’s numbers — when Cassidy Norton, Associate Editor and Media Director for the Warren Group, said, “Single-family homes in Massachusetts have never been more affordable.”
July heard that and said, “Hold my beer.”
The condominium market posted a record-breaking median price in June, but the year-on-year increase was just 1.9%. The single-family housing market also broke price records that month, but the year-over-year average cost increase was 1% at the time.
“Once again, average single-family home prices across Massachusetts continued to hit records even as mortgage rates were nearly double what they were this time last year,” Norton said of the July market. “Demand from potential buyers is obviously still high, but stock levels can’t keep up.”
The condo market always seems to mimic what the single-family home market does.
“Condo prices and sales activity followed similar trends as single-family homes in July,” Norton said. “Sales fell while the average price continued to hit records. Condos have historically been a cheaper alternative to single-family homes, but with the median price hovering over $500,000 over the past three months, prospective buyers will have a hard time finding an easy route there
home ownership.”
Mortgage rates hovering around 7% mean sellers are reluctant to go public.
“While we generally see a hot real estate market over the summer, inventory levels continue to hold it back from generating year-on-year growth,” said Theresa Hatton, CEO of the Massachusetts Association of Realtors said in an Aug. 11 press release. “Given the competitive buying market, we are seeing that many potential sellers are reluctant to list their homes for sale due to the attractive existing mortgage rates they have, combined with the stress of entering the buyers’ market after selling their current homes.”
The drop in purchasing power can make even the bravest shopper hesitant to join the fray.
“We have not seen such a sluggish buying season, where it has been so difficult to generate revenue, since we emerged from the Great Recession,” said Alison Socha, president of the Greater Boston Association of Realtors and a broker from Leading Edge Real Estate in Melrose said in a press release Monday. “This year has been particularly frustrating for potential buyers because stocks have been so limited. And to make matters worse, purchasing power has fallen since the spring due to higher mortgage rates, further reducing buying opportunities and shrinking the overall buyer pool, leading to weaker demand in recent months.”
Here’s a look at what the market is doing in your county:
condominiums
| district | Mid Selling Price (July) | Change yOY |
Number of Sales (July) | Change yOY |
|---|---|---|---|---|
| barn stable | $385,000 | -9.4% | 73 | -9.9% |
| Berkshire | $240,250 | -29.1% | 8th | 33.3% |
| Bristol | $374,000 | 30.8% | 77 | 6.9% |
| dukes | $1,610,000 | 445.3% | 1 | 0% |
| Essex | $461,000 | 10.0% | 1,237 | -25.5% |
| Franklin | 0 | 0 | 0 | -100% |
| hampden | $227,000 | 13.5% | 47 | 0% |
| Hampshire | $340,000 | 25.1% | 25 | 3.8% |
| Middlesex | $660,000 | 3.6% | 495 | -19.1% |
| Nantucket | $767,511 | -18.8% | 1 | 0% |
| Norfolk | $604,540 | 13.0% | 205 | -16.3% |
| Plymouth | $450,000 | 12.5% | 101 | 4.1% |
| suffolk | $725,000 | 4.0% | 201 | -8.9% |
| Worcester | $352,645 | 5.3% | 167 | -26.4% |
single-family houses
| district | Mid Selling Price (July) | Change yOY |
Number of Sales (July) | Change yOY |
|---|---|---|---|---|
| barn stable | $675,005 | 7.1% | 230 | -26.8% |
| Berkshire | $320,000 | 1.6% | 118 | -19.2% |
| Bristol | $474,900 | 3.4% | 303 | -28.9% |
| dukes | $1,043,750 | -18.6% | 16 | -20.0% |
| Essex | $700,000 | 5.3% | 422 | -25.3% |
| Franklin | $315,000 | 7.3% | 56 | -17.6% |
| hampden | $313,750 | 8.2% | 346 | -13.1 |
| Hampshire | $405,000 | 6.6% | 106 | -5.4% |
| Middlesex | $836,000 | 7.9% | 880 | -24.1% |
| Nantucket | $2,497,500 | -16.8% | 8th | -27.3% |
| Norfolk | $751,000 | 2.3% | 463 | -24.6% |
| Plymouth | $599,450 | 3.4% | 402 | -23.4% |
| suffolk | $790,000 | 1.3% | 115 | -17.3% |
| Worcester | $450,000 | 1.0% | 620 | -24.0% |
In the Breakdown of sales by citySingle-family home purchases in Cambridge fell nearly 29% and prices fell 8.1% year-on-year. In Newton, sales fell 9% but the median purchase price rose 6.1%.
In the condo market, sales rose 5.7% in Quincy and fell about 28% in Brockton, but the cities swapped places on home prices, up 9.3% in Brockton and down 7.4% in Quincy %.
Boston sold 15.8% more condos year-over-year and sales were up 12.8%. According to The Warren Group, the median price for a condo here in July was $1,100,000.
A July 19 report by Douglas Elliman Real Estate, which focused on the downtown Boston market in the second quarter, indicated sharp declines in selling prices in Beacon Hill and Seaport, while they rose sharply in Charlestown and Midtown.
| neighborhood | 2nd quarter middle selling price |
% change |
|---|---|---|
| Back bay | $1,539,500 | -14.1% |
| Beacon Hill | $819,250 | -24.0% |
| Charlestown | $885,000 | 22.2% |
| Fenway | $717,000 | 3.4% |
| midtown | $1,470,000 | 13.5% |
| north end | $699,000 | 7.5% |
| seaport | $1,232,000 | -43.4% |
| South Boston | $795,450 | 2.0% |
| south end | $1,128,000 | 4.0% |
| waterfront | $1,175,000 | -14.7% |
| west end | $570,000 | 1.9% |
In the greater Boston area
The Warren Group expanded its operations into the greater Boston area, reporting a 23.2% drop in single-family home sales and a 15% drop in condo purchases. Condo and single-family home prices rose 6.6% and 4.7%, respectively, year over year. The median selling price for a single-family home was $775,000, while the cost of a condo was $650,000.
National
Massachusetts wasn’t the only location to see price increases, but the median price for an existing home (not new) in the country declined in the second quarter. The National Brokers Association offered various insights into the market on August 10th and these were the highlights:
- Selling prices for existing single-family homes rose in about 60% of metro areas measured — 128 out of 221 — in the second quarter.
- The statewide median price for existing single-family homes fell 2.4% year over year to $402,600.
- The monthly mortgage payment for a typical existing single-family home with a 20% down payment was $2,051 — up 11.6% from a year ago.
- One in 20 markets (5%) saw double-digit annual price increases (up from 7% in the previous quarter).
- Families typically spent 27% of their income on mortgage payments, up from 24.5% in the previous quarter and 25.3% a year ago.
Some markets that have suffered from the pressures of telecommuting during the COVID-19 crisis are trying to regain their footing.
“Interestingly, prices have fallen in some of the fastest job-creating markets,” said Lawrence Yun, the national association’s chief economist. “Prices in these areas are trying to get onto better fundamentals after several years of rapid increases. In fact, the number of homes receiving multiple bids, alongside continued employment and wage gains, may suggest price declines are already a thing of the past.”
Year over year, prices fell 19.1% in Austin, 11.3% in San Francisco, 9.6% in Salt Lake City and 7.4% in Las Vegas in the second quarter.
The top 10 metro areas with the largest year-over-year price increases all saw gains of at least 10.4%, with six of those markets being in the Midwest:
These were the most expensive markets (and percentage change between Q2 2022 and Q2 2023):
1. San Jose-Sunnyvale-Santa Clara, California ($1,800,000; -5.3%)
2. San Francisco-Oakland-Hayward, California ($1,335,000; -11.3%)
3. Anaheim-Santa Ana-Irvine, California ($1,250,000; -3.8%)
4. Urban Honolulu, Hawaii ($1,060,700; -7.4%)
5. San Diego-Carlsbad, California ($942,400; -2.4%)
6. Salinas, California ($915,600; 0.6%)
7. Oxnard-Thousand Oaks-Ventura, California ($904,900; -2.7%)
8. San Luis Obispo-Paso Robles, California ($890,900; -3.2%)
9. Boulder ($871,200; -6.7%);
10. Naples-Immokalee-Marco Island, Florida ($850,000; unchanged).
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