The Midyear Sales in Massachusetts Decline by Nearly 25% as Home Prices Rise

Last month, buyers in Massachusetts continued to set record-breaking sale prices, showcasing their eagerness to secure a property in the face of limited inventory. This high demand has propelled the state’s housing market into its most expensive territory yet. According to Cassidy Norton, Associate Publisher and Media Relations Director at real estate data firm The Warren Group, single-family homes in Massachusetts have never been less affordable.

The situation is particularly dire within the Interstate 495 belt, which consists of 139 communities. The Warren Group’s latest report on real estate transactions highlights the exacerbation of the unaffordability dilemma, which has been amplified by the COVID-19 pandemic. This predicament not only creates housing insecurity for many residents but also hampers the state’s ability to compete with more affordable locations such as Florida, Texas, and North Carolina in attracting mobile residents and workers. Governor Maura Healey, who assumed office in January, has pledged to address housing costs, describing them as “out of control.”

While the new administration’s plans for increasing housing production in Massachusetts are still in development, Ed Augustus was sworn in as the state’s first Cabinet-level housing secretary in three decades on June 1. Recognizing the urgent need for action, Augustus has adopted a “more, faster” approach as he navigates resistance from local communities, varying zoning bylaws, and a potentially lengthy legislative process.

The Warren Group’s report on June sales activity revealed a decline in both single-family homes and condominium sales compared to the previous year, with decreases of over 20% and over 14%, respectively. The intense competition for the limited inventory has driven median sale prices to new all-time highs. In June, there were 5,004 single-family homes sold in Massachusetts, marking a 20.5% decrease from June 2022’s 6,297 transactions. The median sale price of a single-family home increased by 1% from last June, reaching a new record high of $612,250, according to The Warren Group’s findings.

According to Norton, despite interest rates almost doubling compared to last year, the single-family housing market in Massachusetts achieved another record-breaking month in June. The median sale price of single-family homes reached an all-time high of $612,250, surpassing the consistent prices below $500,000 just three years ago. Within I-495, there was a 23.3% decrease in single-family home sales in June compared to the same period in 2022, totaling 3,331 sales. The Greater Boston median sale price for single-family homes saw a 2% year-over-year increase, reaching $765,000.

For the first half of 2023, there were 18,706 single-family home sales throughout Massachusetts, indicating a decline of 24.3% compared to the first six months of 2022. However, the year-to-date median sale price of a single-family home increased 0.9% to $555,000 compared to the same period in 2022. Meanwhile, the Greater Boston area witnessed a 25.4% drop in single-family home sales this year, while maintaining a median sale price of $700,000.

The condo market in June followed a similar trend. Last month, there were 2,372 condo sales, representing a 14.2% decrease from June 2022. However, the statewide median sale price for condos increased by 1.9% year-over-year, reaching a new all-time high of $545,000. According to Norton, historically condos have been more affordable than single-family homes, but the dynamics have shifted.

In Greater Boston, there were 1,743 condo sales in June, a 16.5% decline compared to the same period in 2022. The median sale price for condos rose by 2.4% to $635,000. Across the state, there have been 9,432 condo sales thus far in 2023, indicating a 23.2% decrease compared to the first six months of 2022. The year-to-date median condo sale price is $510,000, reflecting a 2.2% increase from the same period in 2022. Specifically for Greater Boston, there have been 6,882 condo sales in 2023, marking a 23% decline from the same six months of 2022. However, the median sale price has risen 1.7% to $599,900.