The Massachusetts housing market is cooling. The Massachusetts Association of REALTORS® (MAR) has released its housing report which shows that the housing market in Massachusetts has seen a significant decrease in new listings and closed sales in March 2023. New listings were down by 22.7 percent for single-family homes and 24.8 percent for condominium properties. Similarly, closed sales decreased by 16.2 percent for single-family homes and 19.8 percent for condominium properties.
Despite the decrease in new listings and closed sales, the median sales price has increased for both single-family homes and condominium properties. The median sales price for single-family homes has gone up by 2.7 percent to $565,000, while for condominium properties, it has increased by 7.3 percent to $515,000. However, the months supply of inventory remained flat for single-family units but increased by 7.1 percent for condominium units.
One of the reasons for the limited inventory is the mortgage interest rates, which almost hit 7% before falling again in recent weeks. Higher rates have continued to put downward pressure on sales prices. Additionally, there were just 2.6 months' supply of existing homes at the beginning of March, which is far below the 4 – 6 months' supply of a balanced market.
It is essential to note that the nationwide shortage of inventory has impacted the monthly sales in Massachusetts. The current sales pace might have been even higher if there was more inventory available. The increase in median sales price despite the decrease in new listings and closed sales indicates a competitive market.
These stats show that the Massachusetts housing market is experiencing a decline in new listings and closed sales, but the median sales price has gone up. The current market trend is influenced by the limited inventory and higher mortgage interest rates, which are putting downward pressure on sales prices.
Massachusetts Housing Market Forecast 2023-2024
Will Massachusetts home prices rise or drop? As per the Massachusetts Housing Market Forecast for 2023-2024, home prices are expected to decline slightly in the coming months. The typical value of homes in Massachusetts was $558,313, and it has gone up by 3.2% over the last twelve months. However, Zillow predicts that the Boston MSA region will experience a decline of 0.7% in home prices by March 2024. In contrast, the Worcester MSA region is forecasted to witness a rise of 0.4% in home prices by the end of March 2024.
The median sale to list ratio in February 2023 was 0.997, indicating that most homes sold were sold at or near their list price. About 37.7% of the homes sold were sold above their list price, while 49.4% were sold below their list price. The median days to pending sale was 11, which is an indication that homes are selling quickly.
While there may be some decline in home prices, it is important to note that the Massachusetts housing market remains strong. The limited inventory nationwide has led to suppressed inventory levels in Massachusetts as well, with just 2.6 months' supply of existing homes available at the beginning of March. The higher mortgage interest rates have also impacted the housing market, putting downward pressure on sales prices.
Overall, the Massachusetts Housing Market Forecast for 2023-2024 suggests a mixed outlook for home prices in the coming months. It is advisable for home buyers and sellers to stay up to date with the latest market trends and work with a knowledgeable real estate professional to make informed decisions.
Indicators That Can Impact The Housing Market in Massachusetts
The Massachusetts housing market is influenced by various factors, including the state's economic performance, population growth, and unemployment rate. These indicators can impact the demand for housing and influence housing market trends and forecasts.
The economy of Massachusetts is thriving, with high-tech research and development and the service sector being the primary contributors. The state's GDP has been growing at an annualized rate of 2.5% over the past five years, with a GDP growth rate of 2.3% from 2021. However, experts forecast a bright economic outlook for the state in 2022.
Population growth in Massachusetts is another crucial factor that influences the housing market. From 2010 to 2020, the state's population grew by 7.4%, representing the fastest percentage growth since the 1960s. This growth has increased the demand for housing in the state, resulting in higher home prices.
The unemployment rate in Massachusetts is currently 3.5%, lower than the long-term average of 5.55%. This low unemployment rate can positively impact the demand for housing as more people can afford to buy homes. However, higher interest rates can affect the demand for housing, leading to a decline in the number of homebuyers.
The Massachusetts housing market is expected to experience growth in 2023-2024, with home values projected to increase. However, the rate of growth might be lower than in previous years, as shown by Zillow's forecast for the region. Nevertheless, the state's robust economy, population growth, and low unemployment rate are positive indicators that can impact the housing market positively.