Median sales price for a home here inches closer to $1m mark

The median sales price for a single-family home in Massachusetts hit $950,000 in May, a record high for the month, according to a report the Greater Boston Association of Realtors released today.

This reflects a 5.6 percent year-over-year increase at a time when mortgage interest rates dance around 7 percent, insurance premiums are increasing, and inventory is low. We have only a 1.6 months’ supply; 6.5 months is generally considered a balanced market, according to U.S. News & World Report. It’s a situation replicated across the nation. The United States is short 4.5 million homes, and the housing deficit is growing, Zillow, an online real estate marketplace, reported today.

That lack of inventory ramps up competition.

We expect to see a boost in sales during the Spring House Hunt, and the numbers are more robust than last May’s, a 9.3 percent increase. It was the fourth time in five months that single-family home sales were up, but it remains the fourth lowest May sales total in the past 20 years, according to the report.

The GBAR hailed it as a “turnaround in the Boston area housing market,” noting that “The rebound reflects the upswing in buyer activity earlier this spring when mortgage rates had eased, and points to the strong pent-up demand and increased optimism being felt in the local housing market.”

Those home buyers are paying 10 percent more, $456 per square foot, for that privilege.

Does that optimism include the area condo market? Yes and no. Sales slipped lightly year over year, but they were up nearly 19 percent month to month. The median sales price for a unit in Greater Boston was slightly lower, $715,000 in May, and the cost per square foot ($606) reflects a 4.7 percent decrease year over year.

The GBAR chalked it up to the condo market being the condo market, one that attracts first-time home buyers, who are “more susceptible to higher interest rates and prices.”

“Even though sales remain modest, we’ve seen a steady increase in market activity this spring,” said Jared Wilk, association president and a broker with Compass in Wellesley. “The softening in mortgage rates we saw early this year motivated many buyers to get off the fence, and that created a lot of foot traffic which continued right up to Memorial Day Weekend.”

In Boston proper, the median sales price for a condo dropped 2.5 percent to $755,000 and are pretty flat year to date. Buyers were paying less per square foot: They were shelling out $844 in May 2023 but $811 last month.

In Boston’s single-family home market, prices shot up 17.4 percent, to $961,250. The cost per square foot exploded, going from $476 to $562, rendering one of the most expensive housing markets in the country even more out of reach. But people are buying; sales were up about 15 percent.

In Metro Boston (which includes Boston, Arlington, Belmont, Brookline, Cambridge, Chelsea, Dedham, Everett, Milton, Revere, Somerville, Waltham, Watertown, and Winthrop), the median sales price for a single-family home surpassed the $1 million mark, climbing from $950,000 in May 2023 to $1,100,000, a jump of nearly 16 percent. Closed sales were up 13 percent.

“It’s the peak selling season, so it’s not uncommon to see multiple offers and bids over list price on homes that are priced right and well-maintained, but sellers also are being more aggressive on pricing, which is helping to drive appreciation,” Wilk said. “We have more buyers than homes to sell which is making for a very competitive market, and sellers are taking advantage.  However, some owners are being a bit overzealous in their pricing, and in those instances we’re seeing properties sit on the market longer, receive fewer offers, and undergo a price adjustment or two in order to sell,” he cautioned.

The organizations may have a different idea as to what encompasses Greater Boston (we don’t have agreement on that subject anyway), but both reports signal that it is still very much a buyer’s market in the region. The GBAR reported that the majority of properties that sold in May went at or above full asking price, with the typical single-family home selling for 104.2 percent of its original list price and the typical condo receiving 101 percent.

The association, however, sees buyers gaining more control in this seller’s market. “It remains a seller’s market, but with mortgage rates still stubbornly high, prices at or near record levels, and listing inventory having improved, buyers are going to have more of a say in how the market performs in the coming months,” Wilk said. “Buyers have more choice and room for negotiation than they did earlier this spring, so they’ve been exercising patience and acting more cautiously in recent weeks, which is likely to take some bounce out of the market rebound we’ve been experiencing this spring.  We see little in the way of price softening however, as we have strong pent-up demand from buyers who’ve been in the market for years only to be outbid in multiple offer situations, and many millennials who are now in their peak homebuying years.”

As buyers head outside the city in search of more affordable homes, they are also facing rising prices:

View their county-by-county breakdown and town-by-town breakdowns.