iStock photo illustration
The share of Boston-area home listings with price cuts may be much less than the same months in 2018 and 2019, but the size of the reductions are like nothing seen in the last five years.
Data from listings portal Zillow shows 14.67 percent of Greater Boston home listings, including both single-families and condominiums, had a price cut in July, compared to 11.75 percent in July 2021. That’s still lower than the 18.14 percent recorded in July 2019 and 16.94 percent recorded in July 2018.
However, as a share of list price, the cuts are substantially higher than in any year since at least 2018, Zillow data shows.
The median price cut on a Greater Boston home listing sat at 3.68 percent of list price in July. In 2018 and 2019, the median size of a price cut peaked in May at 2.78 percent of list price and 2.95 percent of list price, respectively, with the size of a price cut plateauing between July, August and September of 2021 at 3.44 percent of list price.
In its own monthly report, the Greater Boston Association of Realtors warned that diminished buyer power driven by rising prices and interest rates was cooling the market down from “frenzied” highs of the last two years and pushing some buyers out of the market.
The effect, said 2022 GBAR President Melvin Vieira , an agent at RE/MAX Destiny, was “a more normal market.”
“At every level buyers are having to dig deeper into their pockets to purchase a home. They’re becoming more cautious and cost-conscious, so homes are taking longer to sell, and in many instances they are attracting less interest and more modest offers,” he added.
Many have also stopped waiving inspections and other contingencies, he said.
Still, the shortage of homes in the area has kept demand for homes high, sending prices up.
The Warren Group, publisher of Banker & Tradesman, reported the median single– family sale price spiked 8.3 percent on a year–over–year basis to $585,000, up from $540,000 in July 2021 – a new all–time high for the month of July. Meanwhile, the median sale condo price increased 10.9 percent on a year–over–year basis to $521,000 – the fourth consecutive month that the median condo price has hovered above $500,000.
“There’s a little more room for negotiation these days and with prices starting to level off, it’s creating more opportunity for today’s buyers,” Vieira said. “The days of double-digit price growth are all but over, and in much of the market it’s quite possible prices have peaked, especially now that inventory levels are starting to improve.”
