Prices Still High For Limited Inventory of Houses For Sale

Many Homeowners Are “Hesitant to Enter the Market”

Massachusetts home sales continued to tumble in May while prices saw minor fluctuations, reflecting the ongoing strain of limited supply and high interest rates, according to a pair of new reports.

Real estate data firm The Warren Group and the Massachusetts Association of REALTORS both reported Tuesday that sales of single-family homes and condominiums fell significantly from May 2022 to May 2023.

The Warren Group pegged the year-over-year decline at 25.1 percent for single-family homes and 23.7 percent for condos, while MAR estimated a 22.3 percent drop in closed single-family homes sales and 22.7 percent fewer condo sales.

According to The Warren Group, the median price for a single-family home was $589,000 in May 2023, a drop of 0.2 percent from May 2022. MAR estimated the median price increased by 0.2 percent, climbing to $616,450.

“With 3,611 sales recorded and a noticeable 25.1 percent dip in year-over-year figures, the single-family market continues to exhibit trends we’ve seen in recent months,” said Warren Group Associate Publisher and Media Relations Director Cassidy Norton. “The big differentiator in May is that the median single-family home price declined for the second straight month on a year-over-year basis. With elevated interest rates, it’s even more expensive for buyers to purchase homes, and price trends are reflecting that.”

MAR President David McCarthy said many homeowners are “hesitant to enter the market” because they are “unwilling to abandon the lower mortgage rates they locked in several years ago and wade into the fray.”

“Homes are moving quickly, and we’re hopeful that some slight leveling off where the median price is concerned will help create an influx of new existing home inventory, but a high volume of new builds in a variety of categories will be necessary to truly balance the Massachusetts housing market,” McCarthy said.

Although they continue to air concerns about the state’s competitiveness, Massachusetts policymakers have outlined few specific strategies for tackling a shortage of available, affordable housing units.