Here’s How the Greater Boston Housing Market Fared in February 2023
High interest rates and low inventory have made for a slow start to the year.
The spring equinox is around the corner and temperatures will soon be warming. But will the housing market heat up with it? While home sale prices remain high, inventory remain low, causing the number of sales to keep going down. The Massachusetts Association of Realtors released its February housing report where numbers show little relief for those hoping for a better market this year.
Massachusetts: February 2023 by the Numbers
Median price, single-family homes: $520,000
Percent change from Feb. 2022: 4%
Median price, condos: $465,ooo
Percent change from Feb. 2o22: 2.3%
Number of single-family home sales, Feb. 2023: 1,899
Number of single-family home sales, Feb. 2022: 2,322
Number of condo sales, Feb. 2023: 877
Number of condo sales, Feb. 2022: 1,096
Source: Massachusetts Association of Realtors
The good news: While home prices have gone up from last winter, they have remained relatively the same since January 2023, with the median condo price even falling by $32,000. Sure, there are still homes getting multiple offers, but the pricing insanity has died down, says David McCarthy, 2023 Massachusetts Association of Realtors (MAR) president and Keller Williams broker.
However, the bad news is that the number of sales have dipped pretty drastically year-over-year as the Federal Reserve continues to raise interest rates. MAR points to this for the reason behind the decline, with fewer buyers scrambling to buy when interest rates are between 4 and 5 percent (when they could’ve had a nearly zero percent interest rate last March).
While closed sales are low, what’s more concerning, McCarthy says, is the lack of inventory, which is reaching historic lows each month. MAR reports that in February, there were 2,520 new single-family home listings and 1,472 new condo listings, down slightly from last month. But this represents a 21.8 percent and 23 percent decrease, respectively, from last year (and last year’s numbers weren’t that great either).
What gives? For starters, interest rates aren’t helping matters. “So many homeowners got locked into mortgage rates at 3 percent in the last number of years because they refinanced or bought,” McCarthy adds. “Why would they sell now?”
On top of this, more and more Realtors are hearing from people approaching retirement—the ones most likely to be selling their homes—that it’s simply too expensive to make their next move. Normally a lot of market inventory is freed up by people looking to downsize, McCarthy says, with many opting to become “snow birds” and split their time between Massachusetts and Florida. Now many people in this demographic can’t afford a home in the Sunshine State, thanks to rapidly rising real estate down there, so they’re opting to stay put and remain close to family.
“It’s more expensive in Florida,” McCarthy says. “You may or not be able to afford both homes. That’s the rub some people are experiencing, and they don’t want to move away from family…It’s almost as if there’s been a shift in the mindset.”
This doesn’t mean there isn’t hope for those who still want to break into the market. An open mind and a great real estate agent will get you far, McCarthy advises. Don’t have your sights set on one town in particular, and watch market trends: You may still be able to find a deal in unexpected places.