Low Inventory Plagues Massachusetts Marketplace
Sales of both single-family houses and condominiums in Massachusetts declined in March as housing prices rose even further, continuing a pattern that real estate market analysts at The Warren Group said is pushing homeownership further away for many residents.
There were 3,591 single-family home sales in Massachusetts last month, a 6.9 percent decrease from March 2021. Meanwhile, the median home sale price increased 12 percent on a year-over-year basis to $515,000, up from $460,000 in March 2021, The Warren Group said Wednesday. The 1,826 condo sales in March were down 19.5 percent compared to 2,268 condo sales in March 2021 and the median sale price climbed 4.1 percent year-over-year to a new March record high of $460,000.
“Low inventory continues to plague the real estate market in Massachusetts. The number of homes for sale has been declining for a decade or more and that trend has led to a lower sales volume and is pushing prices higher. Couple this with rising mortgage rates — which recently hit 5 percent for the first time since 2011 — and housing affordability is rapidly waning,” Tim Warren, CEO of The Warren Group, said. “First-time homebuyers are flocking to rural communities and blue-collar cities to take advantage of attractive purchase prices.”
Because inventory in the condo market is not quite as depleted as for single-family homes, some would-be homebuyers might think about turning their attention in the coming months to condos, though Warren said it likely won’t be enough to significantly boost the condo market.
“Condos are perfect for a lot of people as city life picks up and with restaurants and cultural events and socialize becoming more popular, more people will consider them as a home. But I think people pretty much know what they want. It will be hard for someone who had been shopping aggressively for a single-family home to suddenly switch and to decide to start looking for a condo,” he said. “So I don’t think we’re going to see a big increase in condo sales this year.”
So far in 2022 there have been 9,711 single-family home sales in Massachusetts, a 9.7 percent drop from the first three months of 2021. At the same time, the year-to-date median single-family home price has increased 10.9 percent to $499,000. There have been 4,490 condo sales so far this year, 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 over the same period in 2021.