Boston Condos for Sale and Apartments for Rent
Nationwide home sales fall
January had fewer homes for sale than ever as supply fell 12%
There were fewer homes for sale in January than ever before as homebuyers made their move on what inventory was available, according to a new Redfin report.
Total home sales for January a record low
New real estate sale listings fell 12.4% from December, bringing total homes for sale in January to a record low, down 2.6% month over month. Despite the drop in new listings, sales rose 7.5% as homebuyer demand continued. That drop in new listings was the largest decline since May 2020 as new listings fell year over year in 84 of the 88 largest U.S. metros.
Redfin CEO Glenn Kelman said in the company’s fourth-quarter earnings call that the inventory crunch could ease come summer.
Home sales down due to low inventory
“We’re well aware of the economic pressures on homebuyers, but so many people are still so desperate to move that sales, for now, are still mostly constrained by inventory, not prices or even mortgage rates,” he said.
Strong competition for condo sales
With homebuyers having zero leverage for negotiating, even homes that need work are “hyper-competitive” due to all the market investors, according to Dallas Redfin real estate agent Barbara Tidwell-Vincent.
“Most of the homes hitting the market are listed by people who need to sell — estate sales, major life changes, that sort of thing. With so few homes for sale, everything is getting multiple offers,” she said.
Boston condo mortgage rates rise
Mortgage rates rose 0.81 percentage point between Dec. 20 and Feb. 17. Rising rates could slow competition by summer, according to the report.
Nationally, January’s median home sale price was $376,200, up 14% from January 2021. Median sales prices increased year over year in all but one of the 88 cities Redfin tracks. In Bridgeport, Conn., prices fell 2% from 2021 after having a 22% year-over-year increase in 2021. The largest increases were in North Port, Fla. up 32%, Austin, Texas, with a 32% increase and Phoenix, up 29%.
January’s seasonally adjusted home sales increased 7.5% from December but were down 4% from January 2021. Sales fell from 2021 in 66 of the 88 largest metro areas, with the biggest declines in Fresno, Calif., down 29%, Seattle, with a 22% decline and San Francisco, down 20%. Honolulu, Miami and Tulsa, Okla., had the largest gains, at 26%, 10% and 10% respectively.
Boston condo sales for sale
The report also found active listings fell 18% from 2021 to an all-time low in January. Homes were on the market longer last month and were less likely to sell above list price — 42% of homes sold above list price in January, down 14% from June’s record high, but up 9% from a year ago.
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Home Sales Fall
That put them at a seasonally adjusted, annualized rate of 6.22 million units, which was 9.1% higher compared with February 2020.
Real Estate Spring Season
At the current sales pace, it would take two months to exhaust this supply. One year ago, there was a three-month supply, which is also considered low.
Real Estate Sales Supply
That tight supply continues to fuel home prices, which were 15.8% higher in February year over year. The median price of an existing home sold during the month was $313,000. That is the highest February price on record. Prices are rising due to bidding wars for homes, but the median was also skewed higher because more sales are occurring on the higher end of the market.
Luxury Real Estate Market
Sales of homes priced above $1 million were 81% higher compared with a year ago.
“The fact that even with the decline in sales, the days on the market are swift, and prices rising,” said Lawrence Yun, chief economist for the Realtors. “This is implying that it is not due to demand disappearing from the market, it is really lack of supply.”
The average days-on-market fell to just 20.
Buyers in February were also facing higher mortgage rates than they were at the end of last year, which cut into their purchasing power. The average rate on the 30-year fixed mortgage wavered around 2.8% in January, according to Mortgage News Daily. It then began to rise steadily in February, hitting 3.27% by the end of the month. Those closing on homes in February, however, would likely have locked in their rates in January.
“Already this year, the monthly cost of a $300,000 loan is up $70,” said Danielle Hale, chief economist for realtor.com. “Looking ahead, the large and still growing cohort of consumers reaching prime home-buying age will keep interest high, but whether shoppers can translate that desire into ownership will depend on whether shopper incomes rise along with economic growth, buyers are willing to let housing costs take up a bigger share of their monthly budgets, or whether more homes for sale help stem the pace of home price increases.”
Homebuilders continue to face headwinds to faster production, such as higher costs for land, labor and materials, as well as supply-chain delays. Single-family housing starts were lower in February than expected, but some of that could be related to harsh winter weather in the South.
Boston Real Estate and the Bottom Line
Regionally, existing-home sales fell 11.5% month-to-month in the Northeast.
- Closed sales of existing homes in February dropped a larger-than-expected 6.6% compared with January, according to the National Association of Realtors.
- That put them at a seasonally adjusted, annualized rate of 6.22 million units, which was 9.1% higher compared with February 2020.
- The supply of homes for sale fell 29.5% year over year, the largest annual decline ever, to 1.03 million homes.
