Is this a Boston condo sellers market?
Is this a Boston condo sellers market?
Housing prices in Greater Boston softened last month as annual price appreciation slowed, according to the Greater Boston Association of Realtors (GBAR) November housing report.
That weaker sales activity has led to moderation in selling prices as annual price appreciation slowed to its lowest in five to six months. Month over month, median sale prices fell for the fourth month in a row and for three of the past five months for condos, the report found.
In November, sales of both single-family homes and condos fell to their lowest level for the month in 12 years, while mortgage rates rose to their highest level since 2000 over the fall. Inventory, as has been the story all year, continued to be in short supply.
November single-family home sales fell 13.1%, year over year, with 784 homes sold, compared to 902 homes sold in November 2022, marking the slowest November for single-family home sales since 2010. Month over month home sales fell 3.6% from October. November also marked the 18th month in a row that single-family home sales fell on an annual basis.
Condominium sales also declined, falling 12.7% from a year earlier, with 630 units sold, compared to 722 in November 2022, marking the slowest November for condo sales since 2011. Month-over-month condo sales fell 2.3%. November was also the 24th month in a row condo sales declined on an annual basis.
GBAR president Alison Socha, and an agent with Leading Edge Real Estate in Melrose, said with mortgage rates reaching their highest level in more than 20 years, the inventory of homes and condos for sale is still tight. Inflation and instability in the financial markets has diminished savings rates and created uncertainty about the economy. Many prospective buyers and sellers have either lacked the confidence or buying power to enter the housing market this fall.
“Today’s slower sales pace doesn’t reflect actual demand, however, as the number of millennials and Gen Xers in their prime homebuying years is substantial, as is the segment of baby boomers looking to right-size,” said Socha. “Pent-up demand has been growing steadily for two years now and that has our market well positioned for a rebound once the Fed starts to ease up on interest rates.”
The report noted that, despite mortgage rate increases and economic concerts, the number of available properties for sale is still not enough to meet demand, which is continuing to drive up home values.
In November, median prices of both single-family homes and condominiums hit new highs.
The median sales price of a single-family home in November rose to $800,000, up 5.3% from November 2022’s $759,500. Condominium sale prices also rose, climbing to $679,000, up 2% from last November’s $666,000.
Socha says even though sales have been fewer this year, the market is still competitive, allowing many to maximize the equity in their homes.
“The buyer pool may be smaller at this time of year, but the reality is we still don’t have nearly enough listings to meet the demand, and that imbalance continues to put upward pressure on home prices,” she said.
There was only 1.5 to 2.5 months of inventory supply at the end of November.
Active listings of single-family homes in November declined 14% from 1,354 last year to 1,166. But new listings rose 1.6% during the same period. Condo listings also declined, falling 9.5% from 1,782 last November.
The limited listings have created a market that still favors sellers who last month closed at or near their initial asking price, according to the report.
A typical single-family home sold for 100.4% of its original asking price in November, while a typical condo sold for 99.4% of the list price, both increasing from last year’s 98.9% and 97.6% respectively.
Despite seller favorability, Socha cautions homeowners to not get too aggressive with their pricing as they head into winter.
“With many buyers sitting on the sidelines until inventory or affordability improve, pricing is going to be more critical than ever for those looking to sell in the coming months,” Socha said. “In recent months, we’ve seen more price adjustments and homes sitting longer, so especially in today’s high-interest-rate environment, sellers need to price their property fairly to others on the market, or they run the risk of making it harder to sell by limiting the number of buyers for their home.”
Prices have relaxed as the rate of annual price appreciation cooled and median selling prices fell from their summer peak.
Month over month, the median sales price of a single-family home fell for the fourth month in a row, down 3.6% from October’s $829,9000. That median selling price is down 12% from July’s record $910,000.
Condo prices fell 2.3% month over month from October’s $695,000 but are down 8.8% from June’s $745,000 peak.
Socha said relaxed prices and more negotiation room for buyers is good for the long-term health of the market.
“Once mortgage rates start to slide and listings pick up, sales are likely poised to improve as well,” Socha said.
My Boston condo thoughts
Even though appreciation and prices have slowed, its still a Boston condo for sale sellers market, mostly due to low inventory
Updated: Boston Real Estate Blog 2023
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Yes. However, more Boston condo owners are decreasing their asking price. That isn’t something we have seen very often. It is still a seller’s market. My advice to buyers is the same as it has always been
If a Boston condo for sale has been on the market for a couple of weeks don’t wait for the Boston condo sellers to drop the price because when they do there will be multiple offers. Go ahead and make an offer for less than the asking price and be prepared to negotiate. The sellers might say no but they could say yes.
For Boston condos for sale that were just listed buyers can offer less than the asking price but most sellers will not accept less than the asking price right after they put the house on the market. Most would rather wait for a better offer.
In general Boston condo prices are still rising but they won’t rise by much this year due to higher interest rates . . . . or at least that is my current theory.
Waiting for the price to go down rarely works but miracles can happen.
- If you’re on the fence about selling your Boston condo, now is a great time to take advantage of sky-high demand, low supply, and fierce buyer competition.
- With Boston condo buyer demand rising and low Boston high rise condos for sale, if you’re in a position to move, your house may really stand out from the crowd.
- Let’s connect today to get your homebuying process underway
Whether or not you’ve been following the Boston condo market lately, there’s a good chance you’ve heard we’re entering a Boston condo sellers’ market. But what does that really mean? And why are conditions today so good for people who want to list their downtown Boston condo for sale?
It starts with the number of Boston condominiums available for sale. The latest Existing Home Sales Report from the National Association of Realtors (NAR) shows housing supply is still astonishingly low. Today, we have a 2.6-month supply of homes at the current sales pace. Historically, a 6-month supply is necessary for a ‘normal’ or ‘neutral’ market in which there are enough homes available for active buyers (see graph below):When the supply of Boston Back Bay ccndos for sale is as low as it is right now, it’s much harder for buyers to find homes to purchase. That creates increased competition among purchasers which leads to more bidding wars. And if buyers know they may be entering a bidding war, they’re going to do their best to submit a very attractive offer. As this happens, home prices rise, and sellers are in the best position to negotiate deals that meet their ideal terms.
Right now, there are many buyers who are ready, willing, and able to purchase a home. Low mortgage rates and the ongoing rise in remote work have prompted buyers to think differently about where they live – and they’re taking action. If you put your house on the market while supply is still low, it will likely get a lot of attention from competitive buyers.
Today’s ultimate sellers’ market holds great opportunities for homeowners ready to make a move. Listing your house now will maximize your exposure to serious buyers who will actively compete against each other to purchase it. Let’s connect to discuss how to jumpstart the selling process.
Updated: Boston Condos for Sale Blog 2023
John Ford Boston Beacon Hill Condo Broker 137 Charles St. Boston, MA 02114