Demand For Housing Remains Strong In Greater Boston, Pushing Prices Higher And Inventory Lower In January

BOSTON, Feb. 24, 2015 /PRNewswire/ -- Near record low mortgage rates, an improving job market, and pent-up demand among millennials helped to spur activity in the local housing market this January, according to data issued today by the Greater Boston Association of REALTORS® (GBAR).  Sales of detached single-family homes increased on an annual basis 0.3 percent (or 2 units) to 617 homes closed, the second highest January sales total in the past eight years and tenth best on record.  Additionally, pending sales (i.e. homes put under contract) rose for a fifth consecutive month, climbing 26.7 percent over year ago levels to 670 homes placed under agreement, the largest annual percentage gain since September 2012.

"We certainly aren't lacking for buyers," said GBAR President David McCarthy, president and broker of Keller-Williams Boston Metro.  "The challenge in many towns is an insufficient supply of listings to meet demand." 

Indeed, inventory of homes for sale fell for a thirty-fifth consecutive month in January to their lowest level in more than a decade, declining 15.6 percent on an annual basis and nearly 30 percent from January 2013 to just over 1,700 homes across 57 communities in the GBAR jurisdiction.  

This imbalance between supply-and-demand is putting upward pressure on home prices.  The median selling price for single-family homes rose on an annual basis by 8.4 percent, from $455,000 in January 2014 to $493,000 this January, a new all-time record high price for the month.  The median selling price for detached single-family homes has now risen in 27 of the past 28 months across Greater Boston.

"With all the snow on the ground it may not seem like an ideal time to buy, but competition for properties is lighter now than it will be this spring and with prices and mortgage rates forecasted to be higher later this year, it's a good time for those who are ready and able to do so," observed McCarthy.

Similar to the single-family market, condominium sales were also historically strong in January, reaching their tenth highest total on record for the month.  However, the overall pace of activity decreased from year ago levels largely due to a scarcity of listings.  On an annual basis, condo sales in Greater Boston declined 18.5 percent, or 100 units, from last January to 440 units closed in January 2015.  It's the third consecutive month, and eighth time in the past nine months, sales of condominiums have fallen on an annual basis.   

The slower sales pace did not hurt selling prices though.  The median selling price for condominiums  increased on an annual basis for a third consecutive month, and twenty-second time in the past 23 months, climbing 9.9 percent over the past year from $413,750 in January 2014 to a new all-time high monthly median price of $454,750 this January.  This tops the previous record high monthly median price of $449,000 set in June 2014.

"Demand for condos is strong across all price ranges.  They're a lifestyle choice that has never been more popular or valuable to own than today," noted McCarthy.  From entry-level buyers looking to convert from renting to home ownership and suburban empty-nesters looking to downsize, to young professionals, dual-income households, and overseas investors seeking an upscale, urban lifestyle for themselves or their college-aged children, condos hold wide appeal, he explained.     

In January, the number of condominium listings on the market in Greater Boston declined for a forty-second consecutive month, decreasing 27.6 percent on an annual basis and by almost 40 percent since January 2013.   As of January 31, just 991 condos were for sale in the 57 communities comprising the GBAR jurisdiction.

Not surprisingly, with limited inventory to sell, the number of units placed under agreement, like sales, fell during the past month, declining 7 percent on an annual basis to 560 condos put under contract in January 2015.

SOURCE Greater Boston Association of REALTORS(R)