Despite a sometimes bumpy road to recovery in some sectors of the state’s economy, the housing market has achieved a new record.
Year to date as of May, the median sale price for a single-family home in the commonwealth was $347,000, according to The Warren Group, publisher of Banker & Tradesman. That surpasses the median sale price year to date in 2005, the last housing peak, by $500.
Now of course $500 is well within a margin of error, but consider the May median sale price – $370,000 – far above May 2005’s median of $352,000. And then there’s the condominium market, which for the year in May surpassed 2006’s peak back in 2014 and is now well over that high-water mark. Median condo sale price year to date in 2006 was $280,000; this year so far it is $332,500.
Both May medians are the highest on record for the month since The Warren Group began its current method of data tracking.
As one might expect – and as Banker & Tradesman has reported – the number of sales has not kept pace, falling short by 970 units year to date for single-families and more than 3,200 units for condos, compared to 2005.
Nothing about these figures should come as a surprise. Though the unemployment rate rose to 4.2 percent in May, economists attribute that to more unemployed individuals seeking work than were previously counted; the state also added 3,000 jobs last month. In many industries there are more jobs than there are qualified candidates to fill them, especially in tech and the trades.
Boston proper is in the midst of a building boom the likes of which we haven’t seen in decades. Luxury condo towers are 50 percent presold before the last beam is laid; even the thousands of units coming online and in the pipeline aren’t enough to satisfy the demands of the area’s workforce.
Boston Mayor Marty Walsh’s ambitious Boston 2030 plan is paying off. The plan calls for 53,000 units of new housing to be built by 2030. By the end of 2016, 12,001 had been built and another 7,237 were under construction, per the city’s two-year snapshot of its progress on the plan. Another 21,865 units are in the pipeline, putting the city 21 percent above its goal for 2016.
But Boston can’t – and shouldn’t – bear the brunt of supporting a burgeoning population. Its neighbors need step up as well. For far too long the suburbs and suburban cities have suppressed new residential building of all types, but most especially multifamily affordable housing.
The Senate is now considering a bill to push cities and towns towards supporting exactly that type of housing, which is desperately needed. The current rate of building is unsustainable – and unstable.
Currently there is less housing production in Greater Boston than at almost any point in the last 50 years. Record high home prices and a drought of inventory are only the beginning of the fallout from municipalities’ shortsighted, exclusionary and provincial approach to homebuilding. If they can’t or won’t fix their own issues, the Legislature should fix it for them.
