Massachusetts Home Buyer Guide

Despite the number of Massachusetts home buyers scrambling to purchase a home before interest rates increase further, the state's lack of real estate inventory, combined with price increases, has finally slowed down the pace of single-family home sales. 

Massachusetts single-family home sales declined 2 percent in November, the first time year-over-year homes sales decreased since April 2013, The Warren Group, publisher of Banker & Tradesman, reported December 30, 2013.

A total of 3,902 single-family homes sold in November, down from 3,983 in November 2012. November marked the first time that home sales posted a decline since April. November also had the fewest number of home sales recorded for any month since April. Despite the slow November, single-family home sales increased more than 6 percent through the first 11 months of 2013. A total of 45,979 sales have been recorded through November in Massachusetts, up from 43,222 during the same 11-month period in 2012.

The median price of single-family homes rose 4 percent to $307,000 in November, up from $295,000 in November 2012. November was the 14th consecutive month of year-over-year increases in the median price for single-family homes. The median price for homes sold January through November was $322,000, up 11 percent from $290,000 in the prior year.

Combined with the lack of inventory, increasing prices are reducing affordability in Massachusetts; therefore, home sales are being impacted. 

With single-family homes less affordable than just six months ago, condominium sales in Massachusetts have continued to be strong. In November, condo sales rose 7 percent from November 2012. A total of 1,609 condos sold in November, up from 1,503 in November 2012. Through November 2013, condo sales were up nearly 6 percent, increasing to 18,683 from 17,655 during the same 11-month period last year.

The median condo price in November jumped more than 6 percent. The median selling price was $299,900, up from $282,000 the prior November. The median price of condos in the Bay State through November 2013 was $295,900, up almost 7 percent from $277,025 during the first 11 months of 2012.

Lack of Massachusetts Real Estate Inventory Pushes Prices Higher

The inventory of single-family homes as of November 30, 2013 decreased 20.6 percent from November 2012 (18,428 listings in 2013 from 23,213 listings in 2012), the Massachusetts Association of Realtors reported December 30, 2013. The number of single-family listings translated into 4.3 months of supply in November 2013, down from 5.9 months of supply in November 2012 and down from 5.2 months in October 2013. November marked the 21st straight month of single-family inventory decreases in Massachusetts.

The inventory picture may be improving going forward for Massachusetts home buyers. The number of new listings added to the market of single-family homes in November increased 7.9 percent over the same time last year (3,954 new listings in 2013 from 3,663 in 2012).

The inventory of condominiums on the market declined 27.7 percent in November compared to November 2012 (4,925 listings in 2013 from 6,813 listings in 2012). The number of condo listings translated into just 2.8 months of supply, down from 4.4 months in November 2012 and down from 3.5 months in October 2013.

The number of new listings added to the condominium market in November increased 3.5 percent from November 2012 (1,375 new listings in 2013 from 1,328 listings in 2012).

Detached single-family homes stayed on the market an average of 94 days in November 2013 compared to an average of 119 days in November 2012. Condos stayed on the market an average of 77 days, down from an average of 110 days in November 2012. On a month-to-month basis, days on market for single-family homes were up two days from October 2013 while condos were down from 78 days.

Data for days on the market can be misleading and confusing for home buyers. Once a home seller accepts an offer from a home buyer, the property typically remains on the market as “contingent” until all contingencies, such as home inspection, loan commitment, etc. pass before it is taken off the market and the status changes to “under agreement”. Days on the market continues to accumulate until all the contingencies have passed and the property status is changed to under agreement. So while a property may be on the market for several weeks after the seller and buyer have agreed to a price, the home isn't really available and in most cases will not be shown to other prospective home buyers.