The number of condominiums for sale in Massachusetts has increased for five consecutive months after declining the previous 33 months, but the increased inventory hasn't stopped prices from rising, the Massachusetts Association of Realtors reported June 26, 2019.
The number of condominiums for sale jumped 6.8 percent to 4,727 in May compared to 4,425 units on the market in May 2018. The number of months supply of condo inventory increased from 2.4 months to 2.6 months. About six months of inventory is considered a balanced market between home buyers and home sellers, so, despite the recent spike in condominium stock, it is still a seller's market.
Although there has been a widespread increase in condo inventory, even in the Boston area, the number of months supply of inventory remains scant. For example, condominium inventory in Arlington, MA spiked 162.5 percent in May, but the number of months supply of inventory only rose to 1.1 months. A 50 percent increase in condo inventory in Melrose, MA only amounts to 1.2 months of supply. Waltham, MA experienced a 66.7 percent jump but only had 1.4 months supply of inventory in May.
One community just west of Boston is inching closer to a balanced condominium market between home buyers and home sellers. A 77.8 percent increase in condo inventory in Newton, MA has pushed the number of months supply of inventory past four months. Don't get too excited, though. Homebuyers in Newton paid on average 100.3 percent of the original list price for condominiums in May.
The median condo price statewide reached $413,000 in May, a 7 percent increase from $386,000 in May 2018 and an all-time high median price. The number of units sold in May also rose, increasing 2.4 percent from 2,116 in May 2018 to 2,167.
The median price of a single-family home increased 3.7 percent from $405,000 in May 2018 to $420,000 last May. Single-family house sales also were strong, rising more than 6 percent to 5,247 compared to 4,939 homes sold in May 2018.
Single-family inventory declined 8.6 percent in May compared to May 2018, and the number of months supply of inventory fell 9.4 percent to 2.9 months. The number of single-family homes on the market has decreased 87 times in the last 88 months on a year-over-year basis.
In addition to limited real estate inventory, mortgage interest rates fueled the Massachusetts spring real estate market. After rising above 5 percent in November 2018, mortgage interest rates began a months-long decline, and average U.S. interest rates have remained below 4 percent for several weeks.