In July, Greater Boston experienced a significant rebound in single-family home sales compared to a year ago. Lower mortgage rates, more available listings and a decline in home prices from June’s record highs lured buyers back into the market, according to the Greater Boston Association of Realtors® (GBAR) July Housing Market Report.
Despite the recovery in single-family home sales, activity in the condominium market remained relatively unchanged compared to the previous year.
However, buyers took advantage of their increased purchasing power, resulting in a slight increase in median sales prices year-over-year in both the single-family home and condominium markets.
Single-family home sales increased 14.7% year over year in July to 1,226 homes sold, compared to 1,069 homes sold in July 2023, marking the largest increase in single-family home sales volume for the month since 2021. Sales also improved month over month, increasing 0.3% from June.
Condo sales saw a decline last month, falling 1.2% to 934 units sold compared to 945 last July. This is the lowest level for lowest condo sales in July since 2011. Condo sales also declined month-over-month, falling 2.8% from June.
Jared Wilk, president of GBAR and a broker with COMPASS in Wellesley, said there’s no denying that sales activity continues to lag behind historical norms, but noted that “last month was the busiest we’ve had in over a year in terms of processing home and condo sales.”
“Buyers have a wider selection of homes to choose from than they did last summer, and with mortgage rates lower than they were in the spring, the market has become increasingly attractive to prospective buyers,” Wilk said. “In addition, prices have come down somewhat since their peak last month, suggesting buyers have more room to negotiate, and that is giving many new optimism as we approach the fall market.”
In both the single-family home and condominium markets, median sales prices increased slightly year-over-year in July. However, these prices declined from the record highs reached in June.
The median single-family home price set a new monthly record in July, rising 1.6% to $925,000 from $910,000 in July 2023. It was the 13th consecutive month that the median single-family home price increased year-over-year. However, GBAR stressed that last month’s increase was the smallest percentage gain during that period. Month-over-month, the median home price fell 3.6% in July from its June peak of $960,000.
The median condo sales price remained nearly unchanged last month (from $738,000 a year ago), increasing 0.3% to $740,000, still marking a new high for the month. The report noted that July was only the fourth month this year that condo prices rose on an annual basis. Month-over-month, condo prices fell 1.3% from their peak of $750,000 in June.
“Although buyer demand has been dampened by higher interest rates, it continues to exceed the supply of homes for sale. This imbalance maintains upward pressure on sales prices and allows prices to continue to rise,” Wilk said.
There are signs that prices may have peaked for now, as median selling prices fell in July from the record highs reached in June.
Wilk said what we are experiencing now is not a “price correction, but rather a price decline.”
“With the peak selling season behind us, there are fewer bidding wars, more offers below asking price and homes taking longer to sell,” Wilk said. “As a result, sellers have become more flexible, and some are agreeing to discounts in order to sell.”
Last month, the majority of properties sold at or above full asking price. Single-family homes typically sold for 103.1% of their original list price, while condos brought in 100.1% of their original sales price.
Although sellers still have the upper hand, Wilk warned homeowners not to overprice their homes because it could shrink the pool of potential buyers.
“In today’s higher interest rate environment, many buyers are either unable or unwilling to overextend themselves financially,” Wilk said. “They are choosing to be more cautious and act in less of a hurry. As a result, sellers who overprice their property run the risk of having to make price adjustments and other concessions and watch their home take longer to sell than they would like.”
“Those who can adjust their expectations and price their property in line with other properties currently for sale will have the most success in this market.”
Despite limited supply, the number of homes and condos for sale in July has steadily increased compared to the previous year.
The number of active listings for single-family homes increased in July, up 30% year-over-year, while the number of active listings for condominiums increased 19%.
“If we get the normal annual influx of new listings that occurs around Labor Day and the Fed keeps its promise to lower interest rates, it is almost certain that more buyers will soon return to the market and give us an active fall season,” Wilk said.
