Editorial: In the overheated mass. housing market, more sales do not hold back prices

For frustrated Massachusetts homebuyers looking for some ray of hope, the latest home sales report should have provided some reason for optimism.

Apparently he should have, but he didn’t.

For the second month in a row, the number of single-family homes sold in Massachusetts rose from a year ago. This happened in April and May.

One would assume that an increase in sales would indicate a corresponding increase in inventory, which should put some pricing pressure on the state’s unaffordable housing market.

However, with a long backlog of demand, this increase in sales did not deter prices, which remained hovering at or near all-time highs.

Real estate market analysts at The Warren Group reported Tuesday that there were 3,887 single-family home sales in Massachusetts last month, representing a 7.5% increase over the 3,616 sales recorded in May 2023, marking only the first time fourth in almost three years that house. sales were up from the same month a year ago.

But as sales increased, so did selling prices. The state’s median single-family home sale price rose 7.9% year over year to $636,000 in May, an all-time high for the month.

“Remarkably, over the same period, the average sales price increased almost 8% percent to reach an all-time high of $636,000,” Cassidy Norton, publisher of the Warren Group, told the Service State House News. “Typically, rising sales would moderate rising prices, but pent-up demand from homebuyers is redefining market dynamics.”

Sales volume increased last month in all but four counties — Bristol, Plymouth, Franklin and Nantucket.

Both in May and through the first five months of the year, Berkshire County saw the largest percentage increase in single-family home sales. The county’s 112 sales last month were up 31.8% compared to May 2023, and the 399 sales there so far this year represent an 11.1% increase from a year ago.

As you might expect, the sharpest price increase so far this year has been recorded on Nantucket. The average price of the 35 single-family home sales on the island so far this year stands at $2.95 million, more than $1 million more than the average price of $1.9 million through the first five months of 2023.

But the demand for housing was not limited to the usual hotspots of the Cape, the Islands and Greater Boston.

More and more high-priced house hunters have moved further west, driving up sales prices — dramatically in some cases — in historically more affordable communities.

This fits what is happening in the north-central part of the state.

Rapid increases in house prices abound. In Fitchburg, the median home sales price increased 80% from 2018 to 2023. Home prices in nearby Westminster, Gardner, Leominster and Lunenburg all increased by more than 60% during the same time period.

“What we’ve seen is a change in the way people live and work that over the past five or six years has changed the way real estate is bought and sold in our area,” Nicholas Pelletier, a realtor in the region and former president. of the North Central Massachusetts Association of Realtors, told the Boston Globe.

The pandemic and the flexibility it brought to many workers who previously commuted to Boston changed the pool of shoppers, Pelletier said. The area has also seen increased investment, factors that “continue to feed off each other”.

According to Redfin, a national residential real estate concern, Lowell, one of the Merrimack Valley’s most affordable communities, saw the median home sale price in May hit $500,000 — a 20.8% year-over-year increase.

Through May, there were 14,005 single-family homes sold across Massachusetts in 2024, a 2.1% increase compared to the same five months in 2023. Meanwhile, the year-to-date average price of a single-family home is up 9.3% to $590,000.

From the co-ownership side of the market, the same increase in sales and prices has been recorded.

There were 1,922 completed sales in May 2024, a 4.3% increase over May 2023. The median sales price also increased, rising 4.6% year-over-year to $550,000, a record high of all time for May, the Warren Group said. .

So far this year, there have been 7,016 condo sales in Massachusetts, a 0.5% decrease compared to the first five months of 2023, while the average sales price rose 6% to $530,000.

Home sales across Massachusetts fell to a 12-year low in 2023, and housing here is out of reach or unaffordable for many residents. Govt. Maura Healey last year identified housing as the “number one issue facing this state” and said there is a shortage of 200,000 units across the state.

The House this month expanded Healey’s housing and policy bond bill into a $6.5 billion, five-year plan that now also includes a $1 billion expansion of Mass. Eastern Massa Water Resources Authority.

The Senate is expected to consider its version of that bill next week, though that branch has yet to unveil its specific plans to encourage the production of much-needed housing.

Whatever long-term benefits come from this legislation, it will not change the current unaffordable state of the housing market in the Commonwealth.

For most aspiring home buyers, this is a dark cloud without a silver lining.