Massachusetts Housing Market Update
It is impossible to read or watch any financial news without seeing something about the real estate market. The real estate market has been on a rocket ride for over a year that few experts predicted. Many thought the pandemic would be a nail in the coffin of the housing market and that we would see a real estate crash comparable to 2008. Thankfully that did not happen. Instead, the housing market has gone through the roof and homeowners have seen the value of their homes grow substantially. Thanks to historically low mortgage rates, many others were able to stop renting and become homeowners themselves at affordable deals. These are national trends and apply to almost every market in the United States. However, not all markets are created equal. So, what is going on in the Massachusetts housing Market? The team at Streamline Realty has everything you need to know.
Current State of the Massachusetts Housing Market
If you have thought about buying a house or selling a house, then you have noticed that the Massachusetts housing market is following national trends. Massachusetts is experiencing the ultimate sellers market where home sellers have all the leverage because of high demand and a small number of homes for sale. Demand is so high that bidding wars are popping up on nearly every property and home buyers are going to extreme lengths to win them. What are home buyers willing to do to win a bidding war?
For starters, they are making offers that far exceed the asking price of the home and they are doing it on the same day the home goes on the market. Competition to buy a house is so fierce that some homes are selling the exact same day that they are listed as for sale. While selling a home in a single day is an extreme, the average time to sell a house has decreased. In May, the average number of days a house is on the market before it is sold is only 29.
According to the Greater Boston Association of Realtors, 1161 detached homes sold in May. This is an increase of 29.9% compared to May 2020. Detached homes are not the only ones being hotly pursued by buyers. Condo sales have also increased dramatically from last year’s numbers.
Demand to buy a house is clearly exceeding inventory and as a result, prices are increasing dramatically. In May, the average sales price for a home in Massachusetts was an eye-popping $761,000. This is a 14% increase from May 2020’s average of $667,500.
Will the Massachusetts Real Estate Market Continue This Way?
The answer is both yes and no. On one hand, demand to buy a home will remain sky high as long as mortgage rates remain where they are. Even if they increase slightly, they are still far below the numbers of recent years, which means they are still a bargain. However, there is a chance that the inventory of homes available for sale might increase, which will give home buyers more opportunities. Nationally, the number of homes for sale increased 6.7% during the first week of June compared to the first week of May. Homeowners are now getting comfortable with the idea of selling their homes and realize the large profits that are available to them. Selling now allows them to get far more than they originally paid for their home while selling their home as quickly as possible. Time will tell if Massachusetts follows this national trend.
Final Thoughts
The national housing market and the Massachusetts housing market is red hot with no indication that it is slowing down. If Massachusetts follows national trends and more homeowners decide to sell their homes, then home buyers will start to see a more favorable climate. However, home buyers should not expect home prices to tumble. There will still be significant demand to buy a home and even large increases in inventory will not be able to meet it. Instead, home buyers can expect prices to level out. If this pans out, it is welcome news for home buyers. For home sellers it means that the best time to act is right now. Selling your home right now takes advantage of demand that is through the roof and supply that is in the basement. There might not be a better time than right now to get a large price while getting your house on and off the market quickly.
