Single-family home and condo sales declined across Massachusetts in September as mortgage rates rose, according to a new report from The Warren Group, publisher of Banker & Tradesman, while inventory remains in short supply and a leading Realtor says Greater Boston’s sellers’ market has come to an end.
Last month, there were 4,877 single-family home sales in Massachusetts, a 16.2 percent decrease from September 2021 when there were 5,822 transactions. This marked the 15th consecutive month that single-family home sales have declined on a year-over-year basis. Meanwhile, the median single-family sale price increased 7.8 percent on a year-over-year basis to $550,000, up from $510,000 in September 2021 – a new all-time high for the month of September.
The Massachusetts Association of Realtors reported that single-family sellers received, on average, only 99.9 percent of list price, the first time since the start of the pandemic that the figure fell below 100 percent.
“Single-family sales numbers took another hit in September as limited inventory, economic uncertainties, and rising interest rates continued to weigh heavily on prospective buyers,” said Tim Warren, CEO of The Warren Group. “In fact, this was the fewest number of single-family sales that we’ve seen in the month of September since 2014. The median sale price is showing a slowdown as well. Prices are still rising, but at a more moderate pace. Last year there were only three months in which prices failed to increase by double digits. This year, through September, the price increase has been in single digits for six months. The big question is whether we will see the median price decline in a future month.”
Year-to-date, there have been 40,513 single-family home sales in Massachusetts, an 11.9 percent decrease from the first nine months of 2021. Meanwhile, the year-to-date median single family home price increased 8.1 percent on the same basis to $554,000.
There were 1,922 condominium sales in September 2022, compared to 2,471 in September 2021 – a 22.9 percent decrease on a year-over-year basis. This marked the 13th consecutive month that condo sales have declined on a year-over-year basis. Meanwhile, the median sale price increased 3.7 percent on a year-over-year basis to $461,500 – a new all-time high for the month of September.
The average share of list price that condo sellers received sat at 100.2 percent last month, MAR said.
“The condo market has underperformed the single-family market in recent months, showing larger sales declines than single-family homes in every month this year,” Warren added.
Year-to-date, there have been 18,703 condo sales, a 15.3 percent decrease from the first nine months of 2021 with a median sale price of $495,000, a 7.6 percent increase on the same basis.
MAR reported that September’s inventory and numbers of new single-family listings were down 16.6 percent year-over-year, with new condo listings down 22.8 percent. September single-family inventory was down 22 percent to 6,816, while condo inventory was down 30.8 percent to 3,208. The single-family market had 1.6 months of supply, while the condo market had 1.7 months of supply.
“It appears our years-long seller’s market has come to an end,” 2022 GBAR President Melvin A. Vieira Jr. said in a statement. “Since the spring, we’ve seen a steady decline not just in the number of home buyers, but also their desire and ability to buy. No longer are bidding wars and the waiving of contingencies the norm. Instead, we’re seeing more price adjustments and longer listing times before a sale, which is common in a more normal, balanced market.”
Buyers grew much more cautious over the summer as average mortgage interest rates climbed from around 4 percent to to a multi-year high of 6.92 percent last week, according to Freddie Mac.
“There’s a lot of uncertainty over the economy and what may happen to home values if there is a recession, and that’s causing hesitation among buyers. As mortgage rates and home prices have risen, purchasing power has declined and that’s prompted many first-time buyers to pull out of the market. We’re also seeing homeowners opt to stay put rather than sell due to concerns over higher interest rates and their ability to find another property to buy. All of this is dragging down sales,” Vieira, a RE/MAX Destiny Realtor, said.