Even as the median single-family and condominium sale prices set new records in May, signs emerged that buyers were pulling back.
The median sale price for both single-family homes and condominiums continued to set records in May, as limited inventory and fierce competition continued to add upward pressure to prices, according to a new report from The Warren Group, publisher of Banker & Tradesman.
Last month, there were 4,788 single-family home sales in Massachusetts, a 7.3 percent decrease from May 2021 when there were 5,165 transactions according to The Warren Group, publisher of Banker & Tradesman. Meanwhile, the median single-family sale price increased 12.4 percent on a year-over-year basis to $590,000, up from $525,000 in May 2021 – a new all-time high for single-family homes since The Warren Group started tracking sales in 1987.
“I might sound like a bit of a broken record announcing that the median single-family home price reached yet another new all-time high, but it’s truly indicative of current market conditions,” Tim Warren, CEO of The Warren Group, said in a statement. “The balance between supply and demand has been way out of sync for some time, and this is the manifestation of that imbalance. To cope, many buyers are setting their sights on markets further and further from major hubs – and even outside of Massachusetts.”
Brokerage and listings portal Redfin reported last week that the Worcester region was the most competitive market in the nation, based on the share of offers its agents wrote that were met with competing offers in the month of May.
Data published by competing portal site Zillow shows that 7.63 percent of listings in Worcester saw price cuts last month, compared to 8 percent in Boston. The median price cut in Worcester was $22,130, or 4.5 percent of the median listing price, compared to $43,829 in Boston representing 3.93 percent of the median listing price.
“Mortgage rates took an unprecedented leap skyward over the past two weeks and quickly multiplied housing costs as they rose,” Zillow economist Nicole Bachaud said in a statement released alongside the group’s May national housing market report. “We are already seeing signs of waning demand, and expect these recent rate hikes to quicken the market’s needed rebalancing. While shoppers will likely experience less competition for homes than the frenzied recent months, their purchasing power has dwindled.”
Year-to-date, there have been 18,371 single-family home sales in Massachusetts, a 10.1 percent decrease from the first five months of 2021. Meanwhile, the year-to-date median single-family home price increased 10.4 percent on the same basis to $530,000. Many of the home sales finalized and recorded in May, however, represent homes that went under agreement earlier in the spring.
There were 2,414 condominium sales in May 2022, compared to 2,730 in May 2021 – an 11.6 percent decrease on a year-over-year basis. Meanwhile, the median sale price increased 7.1 percent on a year-over-year basis to $525,000 – the second consecutive month that the median condo price has hovered above $500,000.
“The median condo price has now been above $500,000 for two straight months, and the median price of $525,000 marked a new all-time high for the month of May,” Warren said. “It’s apparent that demand for condos is strong, which may make it difficult for prospective homebuyers who are looking at condos as an alternative to single-family homes.”
Year-to-date, there have been 9,516 condo sales, an 11 percent decrease from the first five months of 2021 with a median sale price of $482,500, a 7.2 percent increase on the same basis.
