Boston condo prices are still rising

Boston Condos for Sale

Boston condo prices are still rising

The Greater Boston housing market experienced its second month in a row of increased listings in February, bolstering buyer demand as the spring market got underway, according to the Greater Boston Association of Realtors (GBAR) February housing report.

Single-family listings rose from last year for the second month in a row and condo sales rose for the first time in more than two years. The report also noted that median selling prices showed positive gains from last year.

February single-family home sales grew 8.8% year over year, with 457 homes sold, compared to 420 homes sold in February 2023, marking the second annual increase in sales since May of 2022 and the first time since June and July 2021 that sales increased annually two months in a row. The report found that month-over-month home sales did decelerate, dropping by 12.3% from January, which is not unusual. February, being a shorter month, typically has fewer closings.

Condominium sales also rose last month, up 2% from a year earlier, with 456 units sold, compared to 447 last year, marking the first time in 27 months that condo sales rose on an annual basis.

GBAR president Jared Wilk, a broker with Compass in Wellesley, said this year’s spring market had an earlier and stronger start compared to last year due to more listings and more attractive interest rates.

“There’s a lot of pent-up demand that’s built up in the past 12-18 months, and most buyers appear serious and ready to buy,” he said. “They’ve grown comfortable with where rates are at, but are tired of losing out on other offers, so they’re motivated and that’s led to more showings, increased foot traffic at open houses and a higher volume of sales activity.”

While there is more supply than buyers have seen in quite some time, the current inventory of homes and condos still isn’t enough to match the increase in buyer demand.

February’s median single-family home price set a new record for the month, up 12.4% to $785,000 from February 2023’s $700.000. Median condo prices also rose, increasing 7.8% to $689,950 from last February’s $639,900.

Single-family home sale prices moderated in February, falling 4.3% month over month from $820,000 in January, which the report said is due to fewer homes selling last month valued at $1 million or more. Condo prices, however, remained mostly unchanged, rising 0.7% from January’s $685,000.

“While inventory levels have improved, we still have far more buyers than properties to sell and that’s the primary factor driving the steady appreciation in home values,” Wilk said. “Sellers have become more aggressive in their pricing since the start of the year, while buyers are being faced with more multiple-offer situations and many are opting to bid above the list price in an effort to buy a home, and all of this is pushing selling prices higher.”

Last month, the majority of properties sold at or near their full asking price. Single-family homes typically sold for 100.2% of their original list price, while condominiums garnered 99.5% of their initial sales price.

“It’s still a seller’s market, so we expect little in the way of price softening this spring, but that hasn’t deterred buyers from entering the market,” said Wilk. “Mortgage rates have eased since last fall, and that’s helped to improve purchasing power. In addition, inventory levels historically increase steadily from now until June, which will provide buyers more opportunity and choice when looking for a home over the next several months.”

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If you’re considering buying a home or selling your current one to find something that better suits your needs, you may have questions about what’s happening with home prices today. Here’s what you need to know.

There’s still a lot of confusion and misinformation out there. So, no matter what you may have heard, the national data shows they’ve actually been climbing again (see graphs below):

As you can see, in the first half of 2022, home prices went way up. Those increases were dramatic and unsustainable. So, in the second half of 2022, prices adjusted. Those dips were small and didn’t last very long. Still, the news made a big deal about these slight declines, which may have made you worry.

But what’s important to know is that, in 2023, prices are going up again, and this time it’s at a more normal pace. The fact that all three reports now show more typical price increases this year is good news for the housing market.

Home Prices Are Rising Across the Top Cities in the U.S.

After seeing steady home price growth at the national level for the last several months, you may wonder if prices are going up in your local area, too. Know this: while this will vary from one area to the next, home prices are appreciating in these top cities Case-Shiller reports on in their monthly price index (see chart below):

That’s why so many experts are able to forecast home prices will end the year in the positive and continue going up in 2024.

Here’s How This Affects You

For Buyers: If you’ve been waiting to buy a home because you were concerned it might lose value, the fact that home prices are going up should ease your worries. Buying a home before prices climb higher can be a smart move since home values typically appreciate over time.
For Sellers: If you’ve been postponing selling your house because you were worried about how changing home prices would affect its value, now might be a good time to work with a real estate agent to put your house on the market. You don’t have to wait any longer because the data shows home prices are in your favor.

Bottom Line

If you delayed moving because you were concerned home prices would drop, don’t worry – the numbers show they’re going up nationally. To better understand how home prices are changing in your local area, let’s connect.

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Boston condo sales jumped to their highest first-quarter total in 16 years, according to a recent Douglas Elliman Downtown Boston market report.

Sales jumped 18% year over year in the first quarter to 637, the highest first-quarter total since 2006. The average square foot of a sale declined for the fourth straight quarter to 1,132 square feet, 9.1% below the same period last year.

The median sales price fell 16.6% below last year’s record of $1.01 million, the fourth consecutive quarterly decline. Listing inventory rose 44.9% year over year but fell 46.7% from the third quarter of 2020 in the wake of last spring’s COVID-induced lockdown.

The report also found condominiums are staying on the market longer — an average of 83 days — four days more than the same period last year.

Townhouse sales trended similarly, surging from last year during the first quarter and rising for the first time in five quarters. There was a 3.4% year over year drop in sales, while the average square foot of a sale was 18.6% below the year-ago period and down for the fourth straight quarter.

The median sales price of a townhouse fell 2.3% to just over $1.5 million for the fourth consecutive quarterly decline. Listing inventory increased 32.3% year over year but was down 51.2% from last summer’s spike.

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In its latest luxury market report, Redfin found that luxury home prices in the U.S. rose 7.4 percent year over year to an average of $1.76 million in the fourth quarter of 2017. The analysis tracked home sales in over 1,000 cities across the country to analyze the market for luxury homes, which it defines as the top 5 percent of most expensive homes sold in each city in each quarter.

The number of luxury homes sold around the country is quickly increasing, with sales of homes priced at or above $1 million rising 15.2 percent from a year ago, and the sales of homes priced at or above $5 million rising 13.7 percent.

These homes spent an average of 75 days on the market, eight fewer days than in the fourth quarter of 2016.

“The stock market hit all-time highs with gains in nearly every sector last quarter, instilling confidence among the wealthiest homebuyers,” said Redfin chief economist Nela Richardson. “As a result, we saw double-digit growth in luxury home sales in the last months of the year.”

Luxury supply saw three consecutive quarters of decline after the number of homes for sale priced at or above $1 million fell 23.8 percent in the fourth quarter of 2017 compared to the same period last year. The inventory shortage paired with increasing demand contributed to the trend of price increases in the market, causing the number of homes priced at or above $5 million to decline as well, with a 23.4 percent decrease over the same period.

Contact me to find out more about Boston condos for sale or to set up an appointment call/text 617-595-3712.

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