The Massachusetts real estate market saw the median sales price for a single-family home drop last month when compared to April 2022, the first year-over-year decline since 2018, according to data released this week by the state’s top market-watchers.
Lower priced properties are being sold a lot quicker than those on the high end, bringing down the median sales price, both the Warren Group and Massachusetts Association of Realtors told the Herald on Tuesday.
The median price of a single family home fell 1.2% to $553,500, down from $560,000 in April 2022, according to figures from the Warren Group. The number of single-family homes sold, 2,897, also dropped last month, by 25.3%, compared to the year before.
Cassie Norton, associate publisher at the Warren Group, pointed to two driving factors behind the decline: the Fed’s interest rate being at the highest level in 16 years, and the shaky banking industry, with three banks collapsing so far this year.
“The people on the higher end of the market are more affected by things like that,” Norton said. “They have more money on Wall Street, in stocks, so they might have been a little more gun shy about doing a major home purchase while things were a little chaotic.”
Fewer condominiums sold last month as well, with just 1,500 transacting compared to the 2,149 in April 2022, a 30.2% decrease. The median sale price of condos also fell by 3.1% on a year-over-year basis to $513,500, the Warren Group figures show.
Since it’s just one-month’s worth of data, it’s too early to know for sure how things will look going forward, especially when the state’s housing stock is not keeping up with demand, said David McCarthy, president of MAR.
Last month showed the lowest number of single-family homes (3,205) and condominiums (2,554) for sale in the month of April since McCarthy’s group began reporting the data in 2004.
“It is a competitive situation for the buyers, and it’s really unfortunate for the buyers,” McCarthy said. “Obviously some sellers like it because they’re still seeing some price appreciation, and yet, it’s not good for the overall market.”
Through the first four months of 2023, the year-to-date median single-family home price has increased 2.9% on the same same basis from 2022 to $525,000, while there’s been a 25.9% decrease in the number of single-family home sales, Warren Group figures show.
In a balanced market, it would take about four to six months to burn through all the available homes for sale. In Massachusetts, it would take just two, favoring the seller, Norton said.
“Our market right now is wildly imbalanced,” she said. “If we started to see the home price drop, that would be good news for the buyer, but even so, there’s still not many homes to buy.”