Single-family home prices continue to soar
June data reflects hot spring season
MASSACHUSETTS’ SOARING HOUSING market remains red-hot, and continues to demand record-high prices, especially for single-family homes, according to data released Wednesday by The Warren Group.
The monthly data from June, which reflects the spring real estate market, found that the median price of a single-family home reached a record high of $555,000 – up from $440,000 in June 2020 and $429,000 in June 2019. The main reason is high demand. There were 6,959 sales of single-family homes last month, compared to 5,038 the prior June (when the market was drastically affected by COVID-related shutdowns in the spring) and 6,530 in June 2019.
The Boston Globe reported that the market may begin leveling off, as life returns to semi-normal and more people put their homes up for sale. Realtors told the Globe that this spring’s bidding wars have begun to subside.
But Tim Warren, CEO of The Warren Group, suggested that prices will remain high. “High buyer demand, record low interest rates, and dwindling inventory won’t be changing any time soon, and median sale prices will likely continue to break records this summer and fall,” Warren predicted in a statement.
There may also be people moving from the city to the suburbs, seeking more space. In the upscale Boston suburb of Newton, the number of home sales so far this year compared to last year has increased by 72 percent, and the median sale price jumped 19 percent. Lexington, another upscale suburb, saw home sales rise by 42 percent and the median sale price rise by 25 percent.
The market for condominiums is also hot, but not quite as popular as the single-family market. There are still huge numbers of condo sales – 3,169 this June, compared to 1,818 in June 2020 and 2,620 in June 2019. But prices are up by just 16.4 percent over 2019, to $489,000, compared to a nearly 30 percent increase in the median price of a single family home.
That trend is evident in looking at the Boston area condo market. In Boston, the number of condo sales was up by 62 percent year-to-date in 2021 compared to 2020. But the median sale price actually dropped by 13 percent, from just over $1 million to $874,000. The nearby urban hubs of Cambridge and Somerville also saw increases in the numbers of condominiums that sold, but a leveling or slight decrease in sale prices.The data will be relevant as state policymakers consider ways to increase the supply of housing. Gov. Charlie Baker, who has been pushing for more housing production for years, has proposed spending $500 million of federal American Rescue Plan recovery money to boost homeownership opportunities for first-time homebuyers and spur the building of new homes, particularly in urban areas. He wants to spend another $500 million building rental housing and senior and veteran housing.
At a hearing Tuesday, Baker acknowledged that he’s been a “broken record” on housing for the past seven years. But, he said, “COVID made clear more work is needed to address the lack of housing of all kinds across Massachusetts.”