The Massachusetts condo market looks to be in some trouble. Last month I had said that we needed to pull the caution flag out of the drawer. We can officially throw the caution flag for the condo market.
A couple questions. Do we go into condo depreciation? Will we actually see housing prices decrease in the condo market year over year? If this happens, will the condo sickness spread to the Single Family market? Is this a short term drop with a surge coming soon?
This month’s stats are a great look into what may be to come.
If you are looking to hear about the Massachusetts Real Estate Market data for Single Family Homes, Condos and Multi-Family properties… Then you are in the right place.
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Let’s start with Single Families
In May of 2024, we saw 3,293 Single Family homes sell for an average sales price of $841 thousand dollars.
Another month where we saw year over year sales up! That is now three months out of five where we have seen year over sales level increases.
The 3,293 Single Families that sold in May was 1.4% more than last year when we saw 3,248 homes sold.
Not a huge increase, but hey… Beggars can’t be choosers! But the takeaway from this continues to be that our sales levels in 2024 are about equal to what we saw in 2023.
We have seen sales up by 1.4% for the first 5 months of 2024.
But as we have said a million times before… The depressed sales really don’t matter. Because as we know, home values are tied to the inventory levels. Not sales levels.
The May year over year increase of 7.5% was a great showing. Yes, it was down from the 10.8% year over year gain that we saw in April. But 7.5% is pretty darn good!
Five months in the books… Boy, where the heck has this time gone. But five months down, we have seen home prices increase by 8.8%. The lower reading for June did push this number down as we had seen home prices up by 9.4% when looking at the first 4 months of 2024.
Either way, these are some pretty strong gains that Massachusetts homeowners should be pretty happy about.
Now onto the yearly sales comparison levels.
As we have already said, the 3,293 is a strong number and is more then May of 2023. Before May 2023, we would have to go back to May of 2011 to see another year that didn’t sell more than May of 2023 or 2024 when 3,085 Single Family homes were sold.
Home sales really aren’t great. There is no hiding that. But they also aren’t awful. Not to mention home prices for Single Family houses are up by nearly 9%... So I think that’s a pretty good win… For home sellers that is.
We had been talking about a 30 month streak of sales levels declines that came to an end in February before… So can we now talk about the streak of home sales increases?
Ha! Well now we have officially hit two months in a row where we have seen the rate of sales in Massachusetts for Single Family houses increase.
I really don’t see sales levels jumping higher unless interest rates were to fall by quite a bit. Like 5% range. Otherwise, I think these sales levels continue to plug along. I don’t see them going down any further.
Meanwhile there is a 47 consecutive month trend for price increases! That’s crazy!
So with the 4 year streak within striking distance, what should we be looking at? It’s the question as to whether the sickness in the condo market will spread to the Single Family market.
I would say the 4 year streak is a lock. But we really need to keep our eyes on the future data to see if there is a downward trend.
But I continue to say that prices are going to continue to go up. For one simple fact. It’s because of inflation. The rate of price increases may decrease, but they are going to continue to go up. It’s that simple. As long as the government is printing trillions of dollars, then home prices are going to continue to go up.
Any cautionary tales for the Single Family market are tied to the inventory levels.
Year over year, our inventory levels are up 34.3% for May. I think this trend of increasing inventory continues. The question now is how far will these inventory levels build and end up going?
A week or so ago, I laid out a prediction that the inventory levels would peak around 5,500 Single Family homes on the market in the state of Massachusetts.
We now have the highest inventory levels in the last 4 years. It’s still a great market to be a seller in, but there are some things that sellers should be cognizant of as we move forward.
The trend of higher inventory levels continued in May… And I think they are going to continue as we head into the summer as well.
We now have 773 more single family homes on the market at the end of May 2024 then we did at the end of May of 2023. And 625 more houses than May of 2022.
Buyers are taking it on the teeth, left and right. But this is an area of celebration.
Quick recap… So sales in the Single Family Quincy Homes For Sale market were up by 1.4% while inventory was up by 34.3% and the number of new listings were up 16.5% when compared to last year's numbers as there were 5,999 single family homes that were listed in May of 2024.
Home prices Continue to go up and historically speaking, I would put a sizeable bet that next month will be the pricing peak for Massachusetts Single Families in 2024.
Something that is interesting that I picked up when looking at this graph is that we saw a pricing pullback in May of 2023.
As I said earlier, home prices in Massachusetts are up 8.8% for the first 5 months in 2024.
We have the condo market and the Multi-Family market up next…But first, any chance you can do me a huge favor as it helps play with the youtube algorithm? Can you hit that like button? It just makes a huge difference to me as well as my channel.
For the month of May, we saw 1,581 condos close in Massachusetts for an average sales price of $702k thousand dollars.
Let’s start with the sales data...
Sales levels were down by 4.6% year over year. The 1,581 condos sold in Massachusetts for the month of May was compared to the 1,657 units that sold in May of 2023.
The year over year sales level decline ticked down a bit to 3.6% as there have been 5,955 condos sold in Massachusetts which is compared to the 6,178 in the same time period of 2023. This is down slightly as it is compared to the 3.7% that we reported in April.
Here you can see the year over year sales declines or increases. At this point for 2024 it has been every other month with one month down and then the next month up. I think this is what we are going to continue to see and what our new normal is. Nothing concerning.
This graph shows you that the sales levels were down, but it really isn’t awful. We are higher than the huge Covid downtick, but are still significantly higher than the May 2011 levels, but far short of the May 2012 levels.
The 1,581 units sold isn’t a bad number, but it’s important to note that this is by far the weakest market segment in the Massachusetts market.
Like the SIngle Family market, we have seen some big inventory level upticks in the Condo market. The 2,788 condos on the market in Massachusetts is 20.7% higher than the inventory levels in May of 2023.
This is some phenomenal news if you are a home buyer… Whether you are in the condo market or the Single Family market. We are closing in on the levels that we saw back in 2020 in the condo market.
And it’s the story on these inventory levels which makes the levels that we are seeing in prices and the rate of them increasing make sense.
The takeaway continues to be in the condo market that the inventory levels are starting to normalize. Figure this, the average number of units on the market in the last 10 years was 3,205 units in May.
Last month we crossed the 2020 inventory barrier. And this month we pretty much played peek a boo with the inventory levels that we saw then.
As May closed out, we had 398 more condos on the market compared to this time in 2023, 403 more when compared to 2022 and 79 more than 2021.
As a year over year comparison… Sales were down 4.6 percent, but the amount of new listings were up! In May we had 2,553 new listings that hit the market in May. This is compared to the 2,428 that hit the market in May of 2023. This means that the amount of new listings were up by 5.1% year over year.
Yes, home prices were up in May, but the trendline is what is a little concerning.
The average sales price of $702k was .28% higher than the average sales price in May of 2023 when it was $700 thousand dollars.
This is where you are really seeing the effects of additional inventory. Keep in mind that a 3% appreciation rate is what we consider a normalized rate and the rate that our economic betters shoot for.
And here is a good longer term look for year over year sales price increases and decreases. You can really see the disaster that the Covid shutdowns were to the condo market.
A picture is worth a million words, right? Well this picture really shows you a good visualization of that downward trendline.
Does the downward trend continue for the month of June and do we go into a year over year price decrease scenario. OR do we see a year over year bounce back next month. Keep in mind that we actually saw a decline in year over year prices in June of 2023.
So, will history repeat itself?
Year to date, condo prices in Massachusetts are up by 4%. We reported this number as 5.4% in April!
And now for my very quick shameless plug. If you are thinking about buying or selling a home, then reach out to me today as I would be honored to help guide you through the process.
Now onto the Multi-Family market…
Last month was a phenomenal month in the Multi-Family market. This month was a fantastic month. In May of 2024 we saw 454 Multi-Family units sell for an average sales price of $810k.
The size of the year over year increases has narrowed, but sales were still up!
The 454 units sold was a 6.8% increase in the year over year sales levels for May.
This means that year over year sales levels are now up 6.3%.
The 459 sales puts us above the sales levels of May 2023 and 2020 and is exactly the amount we saw in May of 2015.
Are the sales levels knock it out of the park type levels. No, but they are strong. Let’s take a look at the inventory levels.
There are currently 761 multi-family properties on the market. Inventory levels at the end of May of 2024 vs May of 2023 were up by 20%.
I think it’s safe to say that we are officially out of the 2023 inventory band. In other words I feel that I can officially say that inventory is higher for multi-family properties in Massachusetts for 2024.
And for the record… They are still really low. Second lowest in history to be exact.
We listed a lot more multi-family properties then we did in 2023. We listed 785 multi-family properties in May of 2024. This is compared to the 672 in May of 2023. In other words, there were 16.8% more new multi-family properties that came to the market this year over last year.
When you compare our inventory levels today to those of May of 2015, then today there are 2.7 times fewer Multi-Family properties on the market.
Make no bones about it… It was still a great month. It just doesn’t look as good due to the crazy month in April.
Prices were up year over year by 12.5% in May.
The May appreciation levels are right in line with 3 out of the 4 months prior. I guess a better way to say it is that the year over year appreciation rate in May was… Normal for 2024.
Multi-family properties pricing is now up by 14.1%. These are continued strong gains for multi-family property owners in Massachusetts.
Want to talk about your personal real estate needs?
Again, it’s Jeff Chubb. Whether you are looking to buy or sell a home in the next 9 or 90 days, then I would love to chat with you and find out about your real estate goals.
And if you know of anyone that is thinking about buying or selling a house, then I truly appreciate you passing along my information.
You can visit YouTubeRealEstateAgent.com or find all of my information in the description below!
https://www.boston2.com/blog/june-2024-massachusetts-real-estate-market-update/
Until next time.
#June #Massachusetts #Real #Estate #Market #Update
Jeffrey Chubb
2024-06-04 10:26:22
https://bostonrealestateinvestorsassociation.com/june-2024-massachusetts-real-estate-market-update/
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