Amy Wallick

Massachusetts’s housing costs show no signs of slowing down this summer – traditionally the busiest season in the real estate industry. Prospective buyers are facing sticker shock as the median price for a single-family home in the state increased by 7.3 percent in May to a record $660,000. The median condominium sales price increased to $569,000, up by 4.4 percent according to the Massachusetts Association of Realtors.

The closer you get to the Boston area, the higher the prices with the median sale price for a single-family home now $950,000 in the Greater Boston area.

MAR’s housing affordability index, which measures the affordability of homes in the region, is at a low of 48 thus far this year. Massachusetts is the fifth most expensive market in the country. How bad can it get? While we cannot predict the future, MAR, our member associations and our Realtors are working consistently to find solutions and offer support and guidance to both homebuyers and sellers.

Critical Factors Impacting Housing Costs

The reasons behind these steep increases are familiar: a growing population and a limited supply of available housing resulting in high demand and frustrated buyers. When it comes to spiraling costs, we are not alone. In neighboring states like Rhode Island, median costs have increased by 12.8 percent in the first quarter of 2024, according to the Rhode Island Association of Realtors. Nationally, Business Insider reports that experts are predicting increases of more than 4 percent, with Fannie Mae economists projecting increases as high as 4.8 percent, year-over-year.

Up and down the housing market, buyers and sellers are stuck. A recent New York Times article reported that inventory is particularly stymied by Millennials who are locked into their starter homes and unable to trade up for bigger homes due to higher prices. This in turn is freezing out new homebuyers completely as inventory is simply not opening up. These same market conditions are financially motivating older Americans to stay put in their bigger homes.

Offering Solutions to Stimulate Growth

So, what is to be done to address this ongoing crisis that is forcing residents to leave the state? At MAR, we are actively working with state legislators, industry leaders and our members to develop innovative, fair solutions that will offer relief to homebuyers and stimulate growth in the housing market.

Last month, more than 400 MAR members attended the 39th annual Realtor Day on Beacon Hill, advocating for the following affordability initiatives:

First-time homebuyer savings accounts: Offers future homebuyers the opportunity to deposit up to $5,000 per year into a savings account and claim it as an income tax deduction. Any gains on the account are then tax exempt and the homebuyers can invest up to $50,000 over a 15-year period. This sensible approach affords new homebuyers a new tool to save at a time when housing costs and record-high interest rates make owning a home an unaffordable proposition. Yet homeownership contributes to civic, economic and employment stability and new homebuyers generate an estimated $191,690 in economic impact.

Fair housing and diversity education: Fair housing training has long been a part of MAR’s membership requirements. Now, a new bill, H.265/S.166, will extend fair housing and diversity education to all Massachusetts real estate licensees. This bill requires that licensees complete four of 40 licensing course hours and two of 12 biannual continuing education hours in fair housing law or diversity and inclusion in real estate. In addition, the bill provides new licensees with incentives to take continuing education courses much earlier in their initial licensing renewal cycle.

Increased housing production: MAR also supports zoning relief proposed in another bill, H.233, an Act Improving Housing Opportunities, which seeks to increase “by-right” multifamily and open space residential development as well as accessary dwelling units (ADUs), which are smaller secondary dwellings located on the same lots as larger single-family homes.

To MAR members around the state, we encourage you to engage within your own communities by supporting the pro housing zoning changes described above. You can also encourage your community to comply with the state’s new MBTA Communities law that requires cities and towns that receive, or are adjacent to MBTA service, to create at least one designated multifamily housing district without age restrictions and open to families with children.

Individually, we can take steps to make housing in our communities more affordable, more accessible and more diverse. Collectively, we can work together to reverse the state’s longstanding housing crisis to the benefit of all.

Amy Wallick is the 2024 president of the Massachusetts Association of Realtors and a Realtor with Lamacchia Realty in Beverly.