In the latest twist for the Massachusetts housing market, buyers are facing record-high prices for homes, despite a slump in sales volume. November brought an all-time peak in median sales prices for single-family homes reaching $579,900, a steep 8.4% uptick since last year. Condominiums have followed suite, ballooning to a median of $500,000, according to data from The Warren Group.
However, it's not all good news for sellers, as sales dropped significantly. November saw the sale of single-family homes plummet by more than 10%, with condos experiencing a similar decline. In fact, there were only 3,447 single-family homes sold in Massachusetts, marking the lowest number for the month since 2011, as reported by Boston Herald.
What's driving these skyrocketing prices amid dipping sales figures? Cassidy Norton, Associate Publisher at The Warren Group, shed some light on the issue. "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," Norton said in a statement obtained by Boston Herald.
Mortgage rates might be offering an glimmer of hope as they have recently retreated slightly from an October high, but the current rates are still a far cry from the approximated 3% just two years ago. With mortgage rates hovering around 6.95%, as noted by mortgage buyer Freddie Mac, the cost of financing a home continues to be a barrier.
Governor Maura Healey is aware of challenges faced by home buyers, calling the limited housing supply "the strongest headwind facing the Bay State." Healey's solution is a proposed $4 billion housing bond bill, an unprecedented move that has yet to pick up steam as the legislature breaks for the year end. The urgency of the issue was echoed by U.S. Senator Elizabeth Warren, who warned, "Do you think that housing is in short supply in Massachusetts right now? Do you think that rents are already rising like a hot air balloon? Well buckle up for a rough ride," in a Boston Herald interview.
Looking beyond 2023, The Warren Group's analysis suggests that the stiff market conditions might persist due to the high interest rates suppressing buyer interest. Although there's speculative talk by the Federal Reserve of a possible rate reduction in 2024, Massachusetts' potential homebuyers may find the current climate a tough nut to crack, as noted by the analytical data from Boston.com.
