‘Single-family homes in Massachusetts have never been less affordable.’

In a July 20 analysis of existing-home sales, the National Association of Realtors reported that home sales in the country were down nearly 19% from a year ago.

Yet the monthly median sales price of $410,200 for not-new homes was the “second-highest amount ever,” NAR reported.

That record was set the year before, at $413,800.

Home prices may be cooling off nationally, but in Massachusetts, the demand is there — just not the inventory — and prices are still shattering records.

“Despite interest rates nearly double what they were this time last year, the Massachusetts single-family housing market broke another record in June,” said Cassidy Norton, associate publisher and media relations director of The Warren Group. “Last month, the median sale price of $612,250 marked a new all-time high for single-family homes. Just three years ago, single-family home sale
monthly median prices were consistently below $500,000 and interest rates were hovering around 3%.

“Single-family homes in Massachusetts have never been less affordable.”

It’s an unbroken cycle. With long-term mortgage rates in the high sixes and low inventory, sellers are sitting on the sidelines, reluctant to put their properties on the market for fear of not finding their next home at a reasonable price.

Indeed, sales are down 20.5% compared with last June and 24.3% this year, according to The Warren Group. The Massachusetts Association of Realtors (MAR) reported on July 20 that the number of new listings was down 33.2% year over year for single-family homes and 28.7% for condominiums.

Single-family homes

Sales of single-family homes were down year over year in nearly every county:

Condominiums

In the Massachusetts condo market, sales were down 14.2% last month compared with June 2022 and have slipped more than 23% so far this year, according to The Warren Group. Meanwhile, the median sales price hit a record high of $545,000 in June, a year-over-year increase of 1.9%.

“Historically, condos have been a more affordable alternative to single-family homes, but that’s no longer necessarily the case,” Norton said.

“Inventory continues to hamper any year-over-year growth, despite the monthly growth we have seen in sales,” David McCarthy, 2023 president of MAR and a realtor at Keller Williams, said in a news release. “With many existing homeowners having favorable interest rates, there isn’t as much incentive to sell as there has been in prior years. New-build projects in the state will hopefully provide some much-needed inventory.” 

It’s all about purchasing power — and the lack of it, according to Alison Socha, president of the Greater Boston Association of Realtors and an agent with Leading Edge Real Estate in Melrose.

“Buyers have increasingly come to accept the reality of higher mortgage rates, but the reduced purchasing power they’re experiencing as a result of today’s elevated selling prices and financing costs, along with the small number of properties available to buy, has slowed the home search process and dissuaded some from entering the market altogether,” Socha said in a July 18 news release.

Greater Boston

Focusing on the Greater Boston market (all 139 communities within Interstate 495), The Warren Group found a 2% jump in the median sales price to $765,000 for a single-family home and a 2.4% increase for condos to $635,000. Sales were down 16.5% year over year for condos and 23.3% for single-family homes.

Arlington saw half the single-family home sales it did in June 2022, while in Quincy — named one of the best places in the country for first-time home buyers’ quality of life — sales were down more than 30%, and home prices climbed 2.9%.

But the condo market in the “City of Presidents” tells a different story: Sales are down only 6.4% year over year, and the median sales price in Quincy of $525,950 reflects an increase of 33.2% since June 2022.

The same study that hailed Quincy as a great place for buying a starter home also slammed all of New England on affordability.

We know. We know.