Jun 23, 2015, 11:58 ET
BOSTON, June 23, 2015 /PRNewswire/ -- A shortage in the supply of homes and condos for sale, along with lingering effects from the long, snowy winter, impeded market activity last month as sales of single-family homes and condominiums fell to their lowest levels in four years during May, according to data from the Greater Boston Association of Realtors® (GBAR).
Sales of detached single-family homes declined nearly 11 percent on an annual basis from 1,206 homes closed last May to 1,074 in May 2015. It's the lowest May sales total since 2011 when 960 homes sold, and largest percentage drop in home sales on an annual basis since June 2011 when sales fell 13.3 percent. The decrease was more modest in the condo market, as sales slid 6.6 percent, from 999 condominiums sold in May 2014 to 933 this May. Last month was the tenth busiest May for condo sales on record, but also the seventh consecutive month sales have declined on an annual basis. The last time fewer condos sold in May was 2011 when 797 units closed.
"Our spring selling season began slower than normal this year, but it wasn't for a lack of buyers," said GBAR President David McCarthy, owner of Keller Williams Realty Boston Metro. "We continue to suffer from a shortage of listings, and that's frustrating both buyers and sellers because it puts upward pressure on prices and creates uncertainty among homeowners about selling since their ability to trade up or down is limited in such a competitive market."
Currently, listings for both single-family homes and condos are at their lowest point in over a dozen years. The inventory of single-family homes for sale in the GBAR jurisdiction declined 16 percent on an annual basis to less than 3,500 homes, and in the condo market the listings dropped 16.7 percent to about 1,700 units for sale.
Not surprisingly, with inventory tight home values are on the rise. The median selling price for detached single-family homes rose on an annual basis for an eighth consecutive month in May to a new record high for the month of $480,000. That's a 3.4 percent increase from the median price of $464,250 last May, and a gain of 2.1 percent from a median of $470,000 in April.
Additionally, the condominium median selling price improved for a seventh consecutive month, climbing 9.4 percent from $417,500 last May to a new record price for May of $456,900 this year. On a month-to-month basis, the median price also improved but by a more modest 4 percent from $499,250 in April.
Despite the sales downturn last month most market fundamentals remain strong, McCarthy contends, noting today's low mortgage rates, favorable demographics, and steady job growth in metropolitan Boston are fueling buyer demand. "There's a huge appetite to own real estate in Greater Boston right now. With home values having rebounded steadily in the past two and half years, we're seeing more renters, as well as current homeowners who've regained equity in their homes, now have the confidence and desire to enter the market," he said.
This optimism is backed up by the latest pending sales data which show the number of single-family homes placed under contract rose 16.6% over the past 12 months to a new all-time monthly record of 1,885 in May, while pending sales of condos increased nearly 20 percent in the past year to 1,351 in May 2015, the highest total for any month since June 2005 when 1,403 condos went under agreement.
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SOURCE Greater Boston Association of REALTORS(R)
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