In May 2024, the median sales price for single-family homes in Greater Boston reached a staggering $950,000, marking a significant 5.6% increase from the previous year. This surge comes amidst a national housing shortage that has left the United States short of approximately 4.5 million homes, according to Zillow. The local market mirrors this trend, exacerbated by low inventory levels and high mortgage rates hovering around 7%.

Strong Demand and Increased Prices

The Greater Boston Association of Realtors (GBAR) reported that the majority of single-family homes sold in May fetched 104.2% of their original list price, underscoring robust buyer demand. This demand has been fueled by favorable mortgage rate fluctuations earlier in the year, which prompted many buyers to enter the market. Despite the competitive environment, the market saw a 9.3% increase in single-family home sales compared to the previous year.

Condo Market Trends

While single-family homes experienced significant price increases, the condo market in Greater Boston showed mixed results. Although year-over-year sales dipped slightly, there was a notable 19% increase in monthly sales. The median sales price for condos settled at $715,000, with a cost per square foot decreasing by 4.7% year-over-year to $606. This segment remains attractive to first-time buyers despite challenges posed by higher interest rates.

Regional Variations and Market Dynamics

Expanding beyond Boston proper, Metro Boston—encompassing cities like Cambridge, Brookline, and Somerville—saw single-family home prices surpass the $1 million mark, climbing nearly 16% year-over-year to $1,100,000. This region also recorded a 13% increase in closed sales, indicating robust activity despite the high prices.

The real estate market dynamics indicate a seller’s advantage but with signs of buyer influence emerging. Jared Wilk, GBAR President, noted that while sellers initially set aggressive prices, some properties required adjustments to attract offers. This adjustment reflects a delicate balance between supply and demand dynamics in the current market.

Market Outlook and Future Projections

Looking ahead, experts anticipate continued price stability in the Greater Boston housing market, buoyed by sustained buyer demand and constrained inventory levels. While recent months have shown a slight softening in mortgage rates, the overall trend remains one of high prices and competitive bidding environments.

In conclusion, the Greater Boston housing market continues to set new price records, driven by strong buyer demand and limited housing supply. As market conditions evolve, prospective buyers and sellers alike must navigate a landscape shaped by fluctuating mortgage rates and competitive bidding scenarios.

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