Single–family home and condominium sales declined dramatically in July. The market has cooled in Massachusetts after being confronted with high prices and rising mortgage rates, according to a new report from The Warren Group, publisher of Banker & Tradesman.
There were 5,266 single–family home sales in Massachusetts last month, a 17.4 percent decrease from July 2021 when there were 6,374 transactions. Meanwhile, the median single– family sale price spiked 8.3 percent on a year–over–year basis to $585,000, up from $540,000 in July 2021 – a new all–time high for the month of July.
Year–to–date, there have been 29,819 single–family home sales in Massachusetts, an 11.8 percent decrease from the first seven months of 2021. Meanwhile, the year–to–date median single family home price increased 9 percent on the same basis to $553,000.
Meanwhile, there were 2,201 condominium sales in July 2022, compared to 2,916 in July 2021 – a 24.5 percent decrease on a year–over–year basis. Meanwhile, the median sale price increased 10.9 percent on a year–over–year basis to $521,000 – the fourth consecutive month that the median condo price has hovered above $500,000.
Year–to–date, there have been 14,465 condo sales, a 13.9 percent decrease from the first seven months of 2021 with a median sale price of $500,000, an 8.7 percent increase on the same basis.
“Mortgage rates are now over 5 percent while a year ago they were under 3 percent. The single–family home median price is $45,000 higher than a year ago. Increases in wages and salaries are not keeping pace with inflation that is now running at 8.5 percent. Plus, homebuyers face a very low inventory of homes for sale. All this leads us to a cooler real estate market,” Tim Warren, CEO of The Warren Group, said in a statement. “We’ve seen the same trend occur for many consecutive months now; prices reach new highs while the total number of sales declines on a year–over–year basis. Evidence of the cooling is seen in prices. They are rising at a slower rate, gaining just 9 percent so far this year after gaining 14 percent last year.”
Most of the homes whose sales closed in July and which were reported by The Warren Group went under contract in May and June, when the average interest rate on a 30-year fixed mortgage jumped from 5.1 percent to 5.81 percent over the space of two months, according to Freddie Mac. While mortgage rates moderated somewhat in July, even falling 1 basis point below 5 percent at one point, they remained elevated compared to previous months.
The Massachusetts and Greater Boston associations of Realtors had not yet released their respective closed sales and inventory reports for July as of publication time, but pending sales figures for July published by MAR show that pending single-family sales were off 4.2 percent year-over-year statewide, with the biggest drop occurring in Greater Boston: 9.3 percent. Greater Boston pending condo sales were also off 17.3 percent, while pending condo sales were off 15.8 percent statewide.
Alone among Massachusetts’ regions, Central Massachusetts saw a 3 percent year-over-year increase in pending single-family sales and an 8.2 percent increase in pending condo sales. Southeast Massachusetts also saw a small uptick in pending condo sales.
Amid the discernible cooling in the Massachusetts residential real estate market, the state continues to turn out stronger performance than most other markets. Redfin reported that the Worcester and Boston metros were the fifth-most and sixth-most competitive housing markets in the country in July, as measured by the share of offers written by the company’s agents that met with competition. Over half of all offers in both metros met with at least one competing offer while other metro areas, particularly in the Sun Belt, reported figures half that much.
The combined brokerage and listings portal separately reported Tuesday that only 12 percent of Boston-area home sales and 13.4 percent of Worcester-area home sales fell out of contract in July, similar to peer cities like Washington, D.C., Philadelphia and Denver. By contrast, in markets like Jacksonville, Florida and Las Vegas, between 1 in 4 and 1 in 3 home sales fell out of contract in July.