More Boston condo sellers are dropping their asking prices, but buyers are finding little relief, according to a new Redfin study.
The share of homeowners dropping asking prices rose to a six-month high of 15% for the four weeks ended May 1, up from 9% last year, representing Redfin’s largest recorded annual gain.
During that same time period, monthly mortgage payments rose 42%, a new high. And even though more sellers are lowering prices, they are still outnumbered by buyers who continue to fight through low inventory to find a home.
“Unfortunately for buyers hoping to find a deal as competition cools, sellers are pulling back even faster, which is keeping the market deep in seller’s territory,” Fairweather said. “So even though price drops are becoming more common, most homes are still selling above asking price and in record time.”
Redfin found fewer Google searches for “homes for sale” during the week ended April 30, down 7% from last year. Its Homebuyer Demand Index, which measures requests for tours and other services, fell 1% year over year during the week ended May1 and dropped 10% in the past four weeks. A year earlier, that decrease was just 1%.
Additionally, mortgage applications fell 11% from last year as the 30-year mortgage rate rose to 5.27% for the week ended May 5, the highest since August 2009.
In the four weeks ended May 1, active listings fell 18% year over year. The median asking price rose 16% from 2021 to a new all-time high of $408,458. Meanwhile, the median sale price increased 17% year over year to $379,230, the largest increase since August, to a record $396,125.
A record 56% of homes sold above list price, up from 47% last year.
The report also noted the monthly mortgage payment on a median asking-price home rose 5.27% to a record high of $2,404, up 42% from $1,688 last year when rates were 2.96%.
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In what would be an unfortunate occurrence for buyers, some economists are saying that Boston home prices may have moderated.
So far, it looks as though we have seen about a 2% drop in sales prices, in the area, over the past year (not adjusting for inflation, but it never is).
[A] recent detailed study of 379 US metropolitan markets by a well-regarded Pennsylvania consulting firm, Moody’s Economy.com, says that while home prices are falling nationally, the worst may be over for Boston area homeowners. Prices may not rise any time soon, the study said, but they are probably not going to fall much further.
Boston “is very close to the bottom,” said Mark Zandi, chief economist for Moody’s Economy.com. “If the price declines aren’t over, they’re pretty close to over.”
Other areas of the country are expected to fare much worse, with prices dropping 9-15% in Las Vegas, Phoenix, and parts of Floria.
Much of that drop can be attributed to new construction and speculative purchases. Boston, on the other hand, did not have as much over-building and lower speculation.
While prices may have moderated, we still have a glut of homes on the market. I feel as though a good number of these are listed by sellers looking for full-priced offers, and unwilling to negotiate. These sellers will either drop their prices, gradually or take their homes off the market until conditions improve, perhaps next spring.
Source: Housing prices put at or near low – By Kimberly Blanton, The Boston Globe