| Breaking news from Banker & Tradesman: last year was a really good time to be in real estate.
2017 came very close to beating the previous year in the number of single-family sales, missing the mark by just 72 homes. Last year 60,695 single-family homes were sold statewide; the record high was in 1999, when 65,716 homes sold, according to analysis from The Warren Group, publisher of Banker & Tradesman.
It was, however, a record year for home prices. The median sale price of a single-family home in Massachusetts hit $365,000 in 2017, far exceeding the previous high set in 2005 at $355,000.
The same pattern holds in condominium sales; 24,860 condos sold in the state last year, far below the record 34,056 that sold in 2005, though the number of sales did beat 2016 by 3.7 percent. 2017’s median sale price was $341,000; it is the eighth year in an unbroken streak of median sale price increases, and the fifth year of record-setting prices.
And the beginning of 2018 saw the lowest number of homes for sale since MLS began tracking that data. It’s not that houses aren’t being listed, quite to the opposite; a combined 85,555 condos and single-family homes sold last year. It’s that homes that are listed don’t linger on the market, but rather go under agreement in a matter of days as hungry buyers fight for the scraps the market has to offer.
Last year’s real estate market was a bloodbath and there’s every indication that 2018 will be the same. Mortgage rates are rising, but slowly. The economy, particularly in Greater Boston, is booming, bringing with it well-paying jobs and increased spending power.
And Boston has just been shortlisted for Amazon’s second worldwide headquarters, in addition to the 1 million square feet the retailer is hunting for in the Seaport. The final decision is expected this year. HQ2 will surely cause home values to skyrocket wherever it is located – and when values rise, so too do prices.
Record numbers of sales and record prices are to be expected in a market starved for new housing of all types, and unless there’s a drastic shift in the commonwealth’s approach to homebuilding, nothing is going to change.
What will it take to get Greater Boston’s housing market back to normal? This is the new normal, according to a recent poll on B&T.com. The numbers seem to bear that out: seven years of year-over-year median price increases for single-family homes and eight for condos; three years of year-over-year sale increases for single-families and four for condos.
We’re likely to see another three or four years of rising prices before a catastrophic disruption causes a market correction. (In a normal world; it’s possible North Korea will launch a nuke this year and we’ll all have much larger problems than home affordability.)
There are no indications right now that there will be any change in the trajectory we’ve seen for the past few years. So hold onto your hats – and your condo deeds – for another year of record price increases and blockbuster sales figures. And maybe consider getting into real estate.
