Boston condo prices on the rise? Are buyers on hold?
Boston homes experienced year-over-year gains of 15.7% in May, but lagged far behind the national average, according to the S&P Corelogic Case-Shiller Index.
The annual home-price gain across the nation stood at 19.7% in May, down 1.1 percentage point from the previous month, showing a minor slowdown in spite of continued strength in the market.
The 10-City Composite was up 19% from a year ago, but dipped from 19.6% a month earlier. The 20-City Composite was up 20.5% in May year over year, also down slightly from 21.2% in April.
The top three cities with price gains were Tampa (36.1%), Miami (34%) and Dallas (30.8%).
“Housing data for May 2022 continued strong, as price gains decelerated slightly from very high levels,” Craig J. Lazzara, managing director at S&P DJI, said in a press release. “Despite this deceleration, growth rates are still extremely robust, with all three composites at or above the 98th percentile historically.”
Lazzara said the strong price growth might drop further due to rising interest rates making it more expensive to finance a mortgage.
CoreLogic Deputy Chief Economist Selma Hepp said in a press release that signs of slowing homebuyer demand are spreading, and that the report reveals a second month of slowing growth.
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“Nevertheless, some markets continue to heat up, particularly in Florida, but also Chicago, Boston and New York – marking search for deals in regions that suffered outmigration during the pandemic,” she said. “Bifurcation in housing markets is also reflected in the ongoing competition for attractive properties that continue to have multiple offers and sell over the asking price, compared to those that are now seeing price reductions and remain unsold. But, given the continued pressure on properties that sell, home price growth is forecasted to remain elevated and in the mid-teens through the end of the year.”
The hot housing market is not a local phenomenon anywhere in the United States, as almost all major metros have seen a double-digit jump in home prices.
In 94 percent of markets examined by the National Association of Realtors, the median price of an existing single-family home was at least 10 percent higher in the second quarter than a year ago. The median for all 183 markets rose 23 percent from last year to an all-time high of $357,900, according to the Los Angeles Daily News
In the first quarter, 89 percent of markets had seen the median price rise by double figures over a year.
Low mortgage rates and a low number of listings are fueling the rise in home prices. In 12 metro areas, the median price surged more than 30 percent from the previous year, led by a 47 percent rise in Pittsfield, Massachusetts
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Updated: Boston Real Estate 2021
If buyer demand continues to outpace the current supply of existing homes for sale, prices will continue to appreciate. Nothing nefarious is taking place. It is simply the theory of supply & demand working as it should.
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