Boston’s Luxury Condo Market Rebound?
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Boston’s Luxury Condo Market Rebound?
NAR: Existing-home sales rebound in October
Existing-home sales swung to positive territory in October after falling for two months in a row, the National Association of REALTORS® (NAR) said.
Specifically, sales rose 3.4% from September to a seasonally adjusted annual rate of 3.96 million. Year over year, sales were up 2.9% from 3.85 million in October 2023.
The median existing-home price for all housing types in October was $407,200, up 4% from a year before. It was the 16th consecutive month of year-over-year gains.
“The worst of the downturn in home sales could be over, with increasing inventory leading to more transactions,” said NAR Chief Economist Lawrence Yun. “Additional job gains and continued economic growth appear assured, resulting in growing housing demand. However, for most first-time homebuyers, mortgage financing is critically important. While mortgage rates remain elevated, they are expected to stabilize.”
The 30-year, fixed-rate mortgage averaged 6.78% as of Nov. 14, according to Freddie Mac. That’s down from 6.79% a week before and 7.44% a year earlier.
“The housing market is on track for its worst year in more than a decade,” said Molly Boesel, principal economist at CoreLogic. “The good news is, there’s nowhere to go but up. However, stubbornly high mortgage rates and strong home prices will continue to weigh down on the housing recovery. Any potential thaw in the housing market will likely happen only after the pending winter months.”
By property type, single-family home sales rose 3.5% month over month and 4.1% year over year to a seasonally adjusted annual rate of 3.58 million. The median existing single-family home price was $412,200, up 4.1% on a year-over-year basis.
Existing condominium and co-op sales rose 2.7% from September to an annual rate of 380,000. The median existing condo price was $360,300, up 1.6% from October 2023.
Homes typically remained on the market for 29 days in October, up from 28 days in September and 23 days in October 2023.
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Boston’s Luxury Condo Market Rebound?
Condominium sales rebounded in June after taking a massive hit at the start of the coronavirus outbreak in the U.S., reaching a new year-over-year low point in May.
“While the pandemic has impacted our views on the desirability of density, it is clear that home buyers have not given up on condominiums,” CoreLogic reported.
Condo sales have rebounded strongly
Condo sales have rebounded strongly since May, CoreLogic said.
“Interestingly, while condominium sales took a larger dip during the peak of shelter-in-place orders, pending contracts have healthily rebounded to the same rate of annual growth for single-family homes, with both averaging about 17% year-over-year increases in the first two weeks of July,” the report stated.
New inventory of condos
Meanwhile, new inventory of condos outpaced that of single-family homes in June, the most recent month data is available for. However, active condo inventories leveled off in the same month at about a 13% decrease year-over-year since May, compared to a 30% decrease in active inventory for single-family homes.
CoreLogic said this stabilization of condo inventory reflects the increase in newly available units.
“After dipping to a 50% year-over-year fall during the height of the shutdown, we have seen rapid growth in new inventory and recorded an 8% increase by mid-July,” CoreLogic said.
The biggest increase in new condo inventory was for luxury units priced at 200% or greater than the median price, up 16% compared to a year ago. Newly listed inventory of condos priced lower than 100% of the median price was up 5%, and new inventory of between 100% and 200% of the median price rose 2% in June.
One reason for the strong sales is that buyers may be getting a better deal with condos than with single-family homes, CoreLogic said. The share of condos that sold below asking price is higher than the rate of single-family detached homes, the report found. Nevertheless, the discount on condos is at the lowest rate it has been in at least the last 2.5 years, showing that condos remain desirable even in the pandemic, CoreLogic said.
