Last month, for the first time in four years – and only the second time since The Warren Group began its current method of real estate data tracking in 1987 – the statewide median condominium sale price exceeded that of a single-family home.
In February the median single-family home price dropped 4.32 percent from February 2015; in March, it was down slightly less than 1 percent. The median condo price also dropped in February, by almost 4 percent, but in March it was up more than 10 percent compared to March 2015.
What gives?
Both medians are calculated on a statewide basis, and there are far more single-family homes than there are condos in the Bay State; moreover, single-families exist in a wide range of geographies and economic climates, while the condos tend to be clustered in and around cities – particularly Greater Boston.
As a result, the Greater Boston condo market, and all of its new luxury units, has an outsize effect on the statewide median price, while the slowing prices in the rest of the state have a similar effect on the single-family home median.
It’s worth noting that the last and only other time the condo median exceeded the single-family median was in April 2012, at the beginning of the recovery. Home prices were much lower than they are today (as were condo prices) but the trend towards urban living was already very much in evidence.
It continues today, four years later, when condos are in short supply and bidding wars are commonplace. And the new condos that are coming online are almost entirely luxury units, once again driving up prices.
March was also a big month for sales volume – 3,681 single-family homes sold last month, the highest for March since 2007, and the 1,150 condos sold made it the best March since 2010. For the first quarter, the number of single-family homes sold is up 29.7 percent, and the number of condos sold is up 26.2 percent.
March’s median of $320,000 was not, by the way, the record high for a monthly median; that occurred in July of last year, when the median condo price was $337,500. (The median single-family price that month was $360,000.)
Condo brokers say this is just the beginning. The trends that have brought us to this point show no sign of abating and the market keeps pumping out new luxury units. And of course, we’re now solidly in the throes of the spring market. April, May and even June are likely to see similarly high percentage increases in numbers.
At least for now, single-family prices seem to have somewhat stabilized – for the quarter, the median is down 2 percent – though there’s no guarantee that will continue, and in fact, it’s unlikely to. Realtors across the state are bemoaning the lack of inventory; it stands to reason that this spring buyers will bid whatever it takes to capture a home.
March’s median prices are unusual and noteworthy, but it is, after all, just one month’s worth of data. The next few months will tell the tale and set the tone for the remainder of 2016.
