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Massachusetts homebuyers and sellers kept staying away from the housing market last month – so many, in fact, that the number of closed single-family sales was lower than October since the Great Recession ended in 2012.
Only 4,183 single-family homes sold in October, a 21.5 percent drop over last October, according to The Warren Group, publisher of Banker & Tradesman. The condominium market fared slightly better: 1,729 sales, or a 17.9 percent drop on the same basis.
The median single-family sale price rose 4 percent to $520,000 year-over-year, while the median condo price jumped 12.7 percent to $479,000. The comparatively small increase in the single-family price was the smallest year-over-year percent increase since June 2020, The Warren Group said, even if it marked an all-time high for the month of October.
The Massachusetts Association of Realtors reported that the average single-family seller only received 99.4 percent of their original list price last month, the second straight month the figure had dipped below 100 percent and one of the first times that average had slipped below 100 percent since the start of the pandemic. The average condo seller only received 99.9 percent of their list price, the first time since January the figure had sunk below 100 percent.
Experts have been predicting a steady deceleration in home-price growth in markets like Boston as the Federal Reserve’s persistent, large interest rate increases bite into buyers’ ability or desire to finance expensive purchases including buyers who are also selling a home.
“A dwindling inventory, rising interest rates, and the high cost of consumer goods continued to have an impact on homebuying activity across Massachusetts in October,” Tim Warren, CEO of The Warren Group, said in a statement. “In fact, this is the fewest number of single–family home sales for the month of October since 2012. It’s also important to note that even though the median sale price continued to increase, the 4 percent gain was very modest when compared to the price hikes we’ve been seeing over the last few years.”
A study published Tuesday by online brokerage Redfin estimated that a new homebuyer in the Worcester area would need to make $107,634 per year to be able to afford the mortgage payment on the market’s median-priced home with a 5 percent down payment, up 53.8 percent from last October when the figure was $70,005. In Greater Boston, Redfin estimated, the buyer of October’s median-priced home would need to make $169,524 a year, up 45.3 percent from the $116,665 the median-priced home in October of 2021 would have required.
“A lack of inventory continues to be the greatest problem facing housing in Massachusetts. This paired with the aforementioned economic factors continues to increase the barrier to entry for prospective homebuyers,” Dawn Ruffini, 2022 MAR president and a Realtor at RE/MAX Connections in Wilbraham, said in a statement issued along with MAR’s own market statistics.
Single-family inventory hit a never-before-seen October low, MAR data showed, with only 6,562 single-family homes for sale, a 16.1 percent drop year-over-year and 51.2 percent down from inventory levels in October 2019.
The condo market only had 3,088 units for sale last month, 26.8 percent down from October 2021 and 34.1 percent down from October 2019.
New listings continued to stay suppressed, MAR reported, with only 4,359 single-family homes hitting the market in October, a 17.1 percent drop year-over-year that was broadly consistent with year-over-year drops seen in August and September. Condo sellers brought 1,838 units to market, a 19.3 percent drop year-over-year and a slightly smaller decline than had been observed in August and September on the same basis.
