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Congratulations Massachusetts, you’ve done it again – though December figures aren’t yet in, 2018 is going to smash the single-family home price record.
That record is only a year old. Through the end of November 2017, the median sale price of a single-family home in the Bay State was $365,000; for the same time in 2018, it was $385,000, according to the latest analysis from The Warren Group, publisher of Banker & Tradesman.
At the same time the number of sales is down by nearly 600 and comes nowhere near the record set in 1990, back when the rate of homebuilding was at least approaching the demand for housing.
Interestingly, of the top 10 towns with the highest percentage increase in median price (and five or more sales in either year), the top eight are in Western Massachusetts or on the border of New Hampshire (or both). The ninth and 10th place winners are Chelsea and East Boston.
Skyrocketing sale prices have translated in bigger mortgages, and the state’s loan originators were hard at work last year. Statewide the industry originated more than $19.2 billion in purchase mortgages which, though that’s only 1 percent more than 2017, translates into an increase of more than $274 million over the year prior.
And another town catapulted into the top echelon of sale prices; through November 2017, 16 municipalities had median single-family sale prices of more than $1 million. In 2018 Charlestown joined that exalted group, gaining 5 percent from $960,000 in 2017 to $1,007,750 in 2018.
The condo market also made big gains in 2018; a condo in Massachusetts in 2018 cost as much as a single-family home did in 2017 (though that may change with December’s numbers). Through November the median sale price of a condo was $365,000, blowing past the 2017 record of $340,000.
Some of that spectacular $25,000 price jump can be attributed to a glut of luxury condos that were built and sold in Boston last year – but not as much as people like to think. The median price of a condo in Boston increased only 4 percent year over year. (The Warren Group tracks several Boston neighborhoods separately; “Boston” collectively covers the areas where most of the year’s development took place, including the Seaport and the Fenway, as well as the traditionally more expensive neighborhoods like Back Bay.)
So, while it is certainly expensive to purchase a condo in the city, it’s not much more expensive than it has been in previous years. Most of the gains in the median condo price come from unexpected locations.
As with single-family home price gains, the towns with the biggest percentage increases in their median condo prices are for the most part located in Western Mass. and along the New Hampshire border, except for the town with the highest percentage gain year over year. Holliston’s median condo price increased 176 percent over 2017, from $168,000 to $464,290.
The patterns of purchases along the western and northern edges of the state are an interesting contrast to the emphasis put on Greater Boston when discussing housing – and just about anything else. Three-fourths of the state exists beyond 495, and savvy homebuyers know it.
