Massachusetts Real Estate: Condos And Single-family Homes Set New Records

The prices of single-family homes and condos in the Bay State continued to soar in March all while setting new records, according to a new Warren Group report.

The news builds on February’s success where median home sale prices reached a new high and sales remained flat.

Sales themselves declined in March. Last month 2,563 single-family homes sold, down 7.4% from March 2023. Meanwhile, the median single-family sale price grew 7.4% to $580,000, a new high for the month.

Cassidy Norton, associate publisher and media relations director of the Warren Group said it’s no surprise Massachusetts median single-family home prices continued to set records in March.

“Despite the increase, we actually aren’t seeing the rapid, double-digit percent increases we were experiencing at the height of the pandemic and the subsequent months,” Norton said. “Despite this slowdown, limited inventory will probably continue to be the biggest barrier to homeownership in the coming months.”

Since January, 7,001 homes have sold, down 2.8% from the first three months of 2023. During the same period, the median single-family home price rose 9.8% to $560,000.

The Bay State condo market fared similarly last month, except median prices grew even higher.

Condo sales fell 5.9% to 1,431 transactions, compared to 1,520 in March 2023. Meanwhile, the median sale price increased 10% to $550,000, also marking a new high for the month.

Last month, Massachusetts saw the fewest number of condo sales for the month of March since 2015, according to Norton.

“At the same time, the median condo price reached a new all-time high for the month of March,” Norton said. “In fact, this is the first time the median condo price has surpassed $500,000 in the month of March ever, so a median price of $550,000 is pretty unprecedented.”

So far this year, 3,482 condos sold across the state, down 6.2% from 2023, with a median sale price that’s up 8.3% to $520,000.

The Greater Boston Market

The Warren Group’s report also included activity in the Greater Boston housing market, which encompasses the 139 communities located within Route 495.

Greater Boston single-family home sales in March fell 8.2% from 2023 to 1,215. Meanwhile, the median single-family sale price increased 10.4% to $740,000.

Condo sales in Greater Boston also fell last month but just by 2.1% to 1,076 transactions, compared to 1,099 in March 2023. The median sale price increased year over year by 9.4% to $640,000.

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Massachusetts home prices set new records in 2021

As Boston condo buyer demand continued to outpace inventory levels, prices of single-family homes and condominiums in Massachusetts hit new records in 2021, according to a new Warren Group report.

Real Estate Sales Fall, But Prices Rise

The Warren Group’s Massachusetts Sales Report for December 2021 found single-family home sales fell 13.4% to 5,588 from 6,453 a year ago. Compared to December 2019, however, home sales were up 12.1%.

Median Real Estate Sales Prices

The median sale price marked another all-time high for December, at $500,000, up from $457,000 a year earlier and up 25.4% from December 2019’s $398,750 price. December was the ninth consecutive month the median single-family home price was above $500,000. There were 62,195 single-family home sales in December, a 0.8% increase from 2020.

In 2021, the median sale price rose to $510,000, up 14.1% from 2020, which according to the Warren Group was the first time the median year-end price exceeded $500,000.

Warren Group CEO Tim Warren said last year was a wild ride for Massachusetts and “not necessarily one I would want to be on if I were in the market for a new home.”

“The year-end median sale price of $510,000 is a strong indicator that the lack of inventory is increasing competition, pushing prices up and stretching buyers’ budgets thin,” Warren said in a press release. “Higher mortgage interest rates may moderate the increases in home prices, but they will keep monthly mortgage payments sky-high. Demand remains high as buyers eagerly await the spring market for a wave of new homes coming to market. But many current homeowners are opting to stay put, which is compounding the inventory issue.”

Boston Condo Sales

Condominium sales also declined in December, falling 15% to 2,176, compared to 2,561 a year earlier and up 3.1% from December 2019. Last month, the median condominium sale price rose 7% to $438,500, a new high for the month. The median condo price was up 15.5% from December 2019.

Warren said the condo market was strong in 2021, as COVID anxieties continued to wane and demand continued to grow.

“Even when comparing activity on a two-year basis, it’s clear that there is strong demand for condos, which are typically concentrated around urban centers, close to public transportation and jobs,” he said. “The median full-year sale price of $454,000 marked an all-time high for condos, and as inventory in the single-family market continues to dwindle, this could yield even more competition in the condo market in 2022 as buyers look at condos as an alternative for single-family homes.”

Boston Condo Sales and the Bottom Line

There were 28,488 condo sales in 2021, a 17.7 percent increase from 2020. Last year’s median condo sale price was $454,000, up 9.4% from 2020’s $415,000.

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Boston Condos for Sale

Condominiums are selling for an average 16% lower than single-family homes, and that could make them more attractive for millennials and first-time homebuyers, according to a new report by CoreLogic.

Boston Condos for Sale More Affordable

The report says millennials could be pushed “toward buying condos because they tend to be more affordable than single-family homes and because condos typically come with a lower maintenance burden and are mostly located in urban cores”.

First-time Boston Real Estate Buyers

Around 40% of all condo-related mortgage applications in the last year were from first-time buyers, compared to just 33% of regular home mortgage applications, CoreLogic said. In addition, 47% of all condo purchase mortgage applications in 2019 were from millennials, up 2% from 2018.

Boston Condos & Baby Boomers

Baby boomers who’re downsizing are also being drawn to condos, CoreLogic said.

“Given worsening affordability challenges in many markets, condos could be a viable option for many,” CoreLogic said. “In the coming years, younger millennials (age 30 or below) are likely to drive much of the condo demand as they are a very large group. Still, there will be more condo demand than supply as young millennials approach peak household formation and home-buying age.”