Fewer Breaking Into Market As Home Prices Soar Higher
DEC. 19, 2023…..Single-family home sales in Massachusetts were down markedly in November while housing prices set record highs for the month. And if that sounds familiar, it’s probably because it was the sixth consecutive month to post a double-digit percentage decline in sales and a new monthly record high median sale price.
The Warren Group reported Tuesday that there were 3,447 single-family homes sold in the state last month, a 10.6 percent decline from November 2022 and the smallest number of single-family home sales for any November since 2011. With inventories limited, the average sale price for a single-family home increased 8.4 percent over last November to $579,900, setting a new all-time high for November.
“Market conditions and trends remained relatively unchanged in November as limited inventory in Massachusetts pushed single-family prices to a new all-time high for the month and sales fell by more than 10 percent on a year-over-year basis,” Cassidy Norton, associate publisher and media relations director for The Warren Group, said. “I don’t expect the pressure building behind this pent-up demand to be relieved this year; I think we can expect to see more of the same in the coming months due to elevated interest rates. However, the Federal Reserve has indicated it intends to reduce interest rates in 2024, which may help relieve some of that pressure.”
Activity in the condominium market “was nearly lockstep with single-family trends” last month, Norton said. There were 1,487 condo sales in November 2023, down 10.3 percent compared to the 1,658 sales in November 2022. And similar to the single-family market, the median condo sale price climbed 5.3 percent year-over-year to a new November record of $500,000.
Though high and not much more affordable than a single-family home, Norton said that the $500,000 median condo sale price could represent “a glimmer of hope for prospective buyers, as the median sale prices appears to have plateaued,” sticking at the half-million dollar mark for the last three months.
Through the first 11 months of 2023, there have been 37,629 single-family homes sold in Massachusetts, The Warren Group said. That’s a 22.9 percent drop from the first 11 months of 2022. And the year-to-date median sale price for a single-family home is up 4 percent over the same period in 2022, standing at $572,000. The 17,849 condo sales so far this year represent a 19 percent drop from the first 11 months of 2022 while the median sale price of $512,900 is up 4.7 percent over the same time period.
The tax relief law that Gov. Maura Healey signed this fall expanded tax credits and incentives available to developers, but otherwise, the Legislature took little action this year to rein in the state’s housing affordability crisis.
Housing Secretary Ed Augustus this fall described a 200,000-unit housing gap in Massachusetts that must be closed to keep up with population growth and stem the loss of talented workers. He and Healey are now working to convince the Legislature to act with urgency on the administration’s five-year, $4.12 billion housing bond bill (H 4138) that Healey filed in October.
Augustus said in October that 1.6 percent of housing units across Massachusetts were available for sale or rent, calling it the lowest vacancy rate of all 50 states.
“A healthy housing ecosystem should be 4 to 5 percent vacancy rate at any given time, which empowers a consumer to be able to get a rental unit or to make a reasonable offer on purchasing a home,” he said during an event in Attleboro. “How many people here have a family member or experienced themselves or know somebody they’ve worked with who’ve had to make multiple over-asking offers and then still to come away not having the opportunity of homeownership? That is what that low vacancy rate represents to real people.”
The Housing Committee, which got Healey’s bill on Oct. 18, has not yet scheduled a hearing on it. And while Healey has downplayed the notion that the Legislature’s slow pace is holding the state back, she has also rallied supporters around the state to echo her calls for urgency on the housing issue.
“Housing construction starts will start in the spring or not, right? So, we’ve got to get this going and get this going now,” Healey said in Attleboro last month.
