The amount of real estate inventory in Massachusetts is limited. That's an understatement.
About six months of supply of homes is a balanced market between home buyers and home sellers. What does that mean? If homeowners did not list any more properties for sale, it would take six months for all the homes on the market to sell.
During the Great Recession, many cities and towns in the Greater Boston area had eight, nine, or more months of supply. It was a buyers market for sure.
Today, those same communities have less than two months of supply. Statewide, there was 1.8 months supply of single-family homes in March. The number of months of condominium inventory stood at 1.7 months in March.
Prospective homebuyers had far fewer homes to choose from in some Greater Boston cities and towns.
Malden, Massachusetts: Located in Middlesex County just north of Boston, Malden had 0.5 months supply of single-family inventory in March 2020. There were 0.7 months of condominium inventory.
Waltham, Massachusetts: Also located in Middlesex County and to the west of Boston, Waltham homebuyers had 0.6 months of single-family supply to choose from in March. There were 1.1 months of condos for sale.
East Bridgewater, Massachusetts: South of Boston in Plymouth County, East Bridgewater had only 0.4 months of houses on the market in March, along with 1.5 months of condominiums.
Braintree, Massachusetts: Less than 15 miles south of Boston in Norfolk County, Braintree had 0.9 months of single-family inventory and 0.5 months of condos available in March.
Milford, Massachusetts: Located in Worcester County and about 40 miles southwest of Boston, Milford had 0.8 months of houses for sale in March. There were 0.4 months of condominiums.
Salem, Massachusetts: About 15 miles northeast from Boston in Essex County, Salem had 0.9 months of single-family supply and 0.8 months supply of condos in March.
Haverhill, Massachusetts: Also located in Essex County, Haverhill is about 40 miles north of Boston. There were 0.8 months of single-family inventory, and homebuyers had 0.6 months of condominiums to choose from in March.
Melrose, Massachusetts: North of Boston in Middlesex County, Melrose had 0.9 months of houses and only 0.2 months of condos for sale in March.
There are other cities and towns with less than a month of supply of inventory. Why does it matter? If you are buying a home, market activity and data are essential to you making informed decisions.
Many home buyers and home sellers (and many real estate professionals too) look at the real estate market and see what suits their wants and needs. That's a mistake. The data doesn't lie.
The statistics around real estate inventory in the Greater Boston area today provide a clear indication of the direction of home prices in the next six months or so. Even if demand were to fall off a cliff, and that isn't the case right now, prospective homebuyers still will not see declining prices this year in most cities and towns around Boston. Prices increases are more likely in the short term.
What happens over the next 12 to 18 months is harder to predict. COVID-19 will play a pivotal role. So will unemployment figures.
Of course, home price increases and decreases don't happen evenly across the state. Some places have three or four times the inventory of the eight communities listed above. It is possible communities with three or four months of inventory today could shift into "buyer market" territory sooner than others.
You can track your local real estate market with an MLS account from a buyer agent. Ask your real estate agent for community-specific market reports. There are opportunities in every market for homebuyers who invest the time to learn and work with dedicated professionals.