The start of summer wasn’t quite enough to heat up the state’s housing market, a Massachusetts Association of Realtors report on June housing data released Monday indicated, with prices still on the rise and inventory sinking.
“Inventory continues to hamper any year-over-year growth, despite the monthly growth we have seen in sales,” said MAR President and realtor David McCarthy.
The median price for a single-family home bought in June hit $650,000, a 4% increase compared to June 2022, while condominium prices remained flat, the report stated. New listings dropped by 33.2% for single family homes and by 28.7% for condominiums compared to last year.
The number of closed sales did increase for the fourth month in a row but remained well below last year’s. Single-family home sales hit 4,440 for the month, a 23.2% drop off from June 2022.
Despite the monthly uptick in sales, McCarthy said, many realtors are forecasting the second half of the year will remain similar to the first.
“It is likely prices will be in the same category they have been, which is up slightly or up a few percentage each month,” said McCarthy. “And that will hold in part because our inventory numbers are so low.”
The housing prices saw a small reprieve in the spring before continuing their steady upward climb, with the Warren Group data showing prices decreasing 1.2% in April 2023 compared to April 2022 — the first year-over-year decrease since 2018.
Among other economic factors, the high prices continue to be a barrier to the market returning to pre-pandemic levels, an MAR release stated.
Many homeowners have mortgages under 5% — with 40% of current existing mortgages in the marketplace even below 4% — which also creates less incentive to sell than previous years and keeps inventory low, McCarthy said.
McCarthy also cited high wealth in the baby boomer generation as a factor in the low inventory, noting many are buying second homes without selling their first.
Massachusetts isn’t alone in the housing issues, the realtor noted.
“Everybody I’ve ever spoken to over the last year plus has complained about inventory levels, or commented that inventory levels are significantly low,” said McCarthy. “There are pockets of the country that are still seeing very significant price increases, and then there are pockets of the country that are a little bit slower on those. But we’re not seeing any part of the country having a decline in price of any significance.”
Hopefully, he said, new build projects in the state will start to provide some “much-needed inventory.”