Boston Condos for Sale and Apartments for Rent
Where are Boston condo prices heading?
Median home prices in Greater Boston hit $900K
As homebuyer activity intensified last month, the median price of a single-family home hit $900,000 across Greater Boston, according to the Greater Boston Association of Realtors (GBAR) March housing report.
The activity was spurred by relatively stable mortgage rates and milder weather, attracting more buyers to the market.
Last month, both single-family home and condominium sales surged, up 30% to 40% from February. However, sales volume remained below what they were last year as demand continued to outweigh supply.
In March, the median sale price of both homes and condos increased by 9% compared to the previous year.
March single-family home sales fell 3.8% year over year, with 606 homes sold, compared to 630 homes sold in March 2023, marking the lowest number of sales for the month of March in 15 years. The report found that month-over-month home sales did accelerate, up 31.5% from February, reflecting what the report called the “surge in buyer interest and activity that typically occurs as spring approaches.”
Condominium sales also dropped last month, down 9.5% from a year earlier, with 647 units sold, compared to 715, marking the fewest condos sold during the month of March since 2015.
GBAR president Jared Wilk, a broker with COMPASS in Wellesley, said even though today’s sales pace is nothing like what we saw over the past half-dozen years, the market has been busier than anticipated in the early part of the year.
“There’s a lot of pent-up demand from those who’ve been waiting for mortgage rates to settle down, not to mention a large pool of buyers who’ve grown frustrated from losing out on other offers, and both are motivated and ready to buy,” said Wilk. “At the same time, we lack listings, and that’s putting upward pressure on prices and creating affordability issues, especially in the entry-level market. It’s the primary reason sales activity isn’t stronger right now. We need more properties to sell.”
March’s median single-family home and condo prices set new records for the month. The median price of a single-family home rose 9.1% to $900,000 from March 2023’s $825,000. Median condo prices also rose, increasing 8.8% to $740,000 from last March’s $680,000.
Single-family home sale prices in March climbed 14.9% month over month from $783,000 in February, while condo prices grew from 7.4% the previous month, both reflecting strong buyer demand driving the competitive market.
Wilk said that many homeowners are still reluctant to sell and take on a higher-rate loan.
“Despite a slight rise in mortgage rates since January, buyer traffic has improved steadily as we’ve approached spring, but the same can’t be said for listings,” Wilk said. “Inventory remains limited in many communities, which is giving sellers the ability to be more aggressive in their pricing. On top of that, buyers are having to contend with multiple offer situations again and many are opting to bid above the list price in an effort to buy a home, and all of this is fueling the steady appreciation in home prices.”
Last month, the majority of properties sold at or above their full asking price. Single-family homes typically sold for 102.4% of their original list price, while condominiums garnered 99.8% of their initial sales price.
“It’s unlikely we will see much in the way of price softening this spring, but there is an expectation mortgage rates will ease once the Fed moves to lower interest rates, and that should help improve buyers’ purchasing power in the coming months,” Wilk stated. “Inventory levels tend to increase steadily between now and summer as well, so buyers can expect to find a larger selection of homes to choose from and more opportunity for negotiation as they look ahead.”
Inventory shows modest increases
Month over month, inventory rose modestly in March for the third month in a row followed by a “significant influx” of listings during the first two weeks of April, the report noted.
Active single-family home listings rose 1.7% from February, while active condo listings grew 1.5%.
Once the calendar turned, listings showed even more growth during the first two weeks of April, as single-family listings increased 24% and condo listings climbed from 1,300 units listed on April 1 to 1,565 listed onApril 15.
“There’s a greater sense of optimism about the housing market today than any time in the past two years,” said Wilk. “Buyers are enthusiastic, and fewer are waiting for mortgage rates or prices to drop to move forward. Sellers also appear to be more accepting of the current interest rate environment, and many seem to be looking at the next few months as an ideal time to maximize the equity in their homes. That should make for a healthier housing market this spring.”
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Where are Boston condo prices heading?
For the second month in a row, prices for single-family homes and condos in Massachusetts set new records in March, according to a new Warren Group report.
The continued growth of median sales prices, which showed no signs of slowing down, coincided with significant declines in activity in the Bay State.
The statewide median single-family home price grew 4.9% to $540,000, up from $515,000 last year, marking a new all-time high for March. That price growth, however, came with fewer sales.
The Warren Group’s March sales report found that Massachusetts single-family home sales fell 23.4% to 2,756 from 3,600 a year ago.
Cassidy Norton, associate publisher and media relations director of the Warren Group said those single-family home sales marked the fewest transactions in March since 2011.
“A lack of inventory across Massachusetts continues to be the biggest factor in the declining sales volume,” Norton said. “But, when paired with rising interest rates and uncertainties about the economy, we can expect to see similar trends as the spring housing market starts to heat up.”
Since January, 7,184 homes sold, down 26.2% from the first three months of 2022. During the same period, the year-to-date median single-family home price rose 2.2% to $510,000.
Meanwhile, the median condominium sale price increased 7.5% to $500,000 in March. Yet, condo sales posted another decline last month, falling 22% from last year to 1,525.
“Once again, the condo market followed almost identical trends as the single-family market,” Norton said. “However, with rising interest rates and single-family home prices setting new records, condos might be a slightly more affordable option for homeownership for prospective buyers across Massachusetts.”
So far this year, 3,720 condos sold across the state, down 24.9% from 2022, with a median sale price that’s up 6.7% to $480,000.
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Where are Boston condo prices heading?
While rising interest rates have begun to slow an overheated Boston condo for sale market as monthly mortgage payments have risen dramatically since the beginning of the year. This is leaving some Bostonians who want to purchase a Beacon Hill or Back Bay condo priced out of the market and others wondering if now is the time to buy one. But this rise in borrowing cost shows no signs of letting up soon.
Economic uncertainty and the volatility of the financial markets are causing mortgage rates to rise. George Ratiu, Senior Economist and Manager of Economic Research at realtor.com, says this:
“While even two months ago rates above 7% may have seemed unthinkable, at the current pace, we can expect rates to surpass that level in the next three months.”
So, is now the right time to buy a home? Anyone thinking about buying a home today should ask themselves two questions:
1. Where Do I Think Boston Condo for Sale Prices Are Heading?
There are two places to turn to answer this question. First is the consensus of what experts are saying. If you look at what experts are projecting for home prices in 2023, they’re forecasting home price appreciation around 2%. While it’s true some are calling for depreciation, most are calling for appreciation in home values over the next year.
The second spot to turn to for information is the Home Price Expectation Survey from Pulsenomics – a survey of a national panel of over one hundred economists, real estate experts, and investment and market strategists. According to the latest release, the experts surveyed are also calling for home price appreciation for the next several years (see graph below):
2. Where Do I Think Interest Rates Are Heading?
Like mentioned above, Ratiu sees mortgage rates rising over the next several months. Another expert agrees. Mark Fleming, Chief Economist at First American, says:
“While mortgage rates are expected to continue to drift higher over the coming months, much of the rapid increase in rates is likely behind us.”
The instability in the world and higher inflation are driving this volatile market, resulting in higher borrowing rates for those looking to buy homes.
Boston Condos for Sale and the Bottom Line
If you’re thinking about buying a home, asking yourself about home prices and mortgage rates will help you make a powerful and confident decision. Experts see both prices and rates rising in the future. The alternative is to rent, but rents are also increasing. That may mean buying a home makes more sense than renting an apartment.
