Here’s How the Greater Boston Housing Market Fared in March 2023
Where have all the houses gone?
Photo via Getty Images/Feodora Chiosea
Spring is a season of change, but housing market reports show more of the same patterns playing out in Greater Boston real estate: more declining sales, more increasing prices, and more scarcity in an area with an already sparse inventory.
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According to the most recent monthly Massachusetts Association of Realtors (MAR) housing statistics report, home sale totals continued to decrease while sales prices rise. For March, new listings were down 22.7 percent for single-family homes and 24.8 percent for condos compared to 2022, while closed sales decreased by 16.2 percent for single-family homes and 19.8 percent for condos respectively. January and February showed similar drops.
The problem is there simply just aren’t homes out there for people to buy. “Potential sellers are saying they want to sell, but can’t—and they give one of three reasons: They can’t find anything to buy; they don’t want to get stuck putting home on market and then needing to buy (when it sells); and they don’t want to do mortgage at this rate,” David McCarthy, 2023 Massachusetts Association of Realtors (MAR) president and Keller Williams broker says. “We’re not building enough to keep up with demand and we haven’t been for many years.”
Mortgage rates also aren’t helping. Rates are higher than they were a year ago, causing many buyers to balk at the idea of buying a home they could’ve gotten cheaper a few months ago. But, points out that mortgage rates are still relatively low at between six and seven percent.
Stringent zoning laws and regulations are now catching up to us, McCarthy reasons, creating a dearth of available homes. There’s also a high demand for ‘starter homes’—relatively affordable, smaller options for people planning to start families—but instead the market is filled with multifamily housing or larger mansions, squeezing out many middle-class buyers looking for a single-family house on a small lot where they can raise a few kids. Homes that do fit these criteria are getting snatched up quickly, locking many would-be owners out of the process. “We need to build homes that are geared for middle America,” McCarthy says. “If we had more inventory, we’d continue to sell.”
One concern among people who currently own these types of homes is that more housing stock would send prices plummeting, but McCarthy says that given the current demand, that’s unlikely to happen. In fact, prices rose year over year this month, with the median single-family home increasing to 2.7 percent at $565,000 and condo prices going up 7.3 percent to a median $515,000.
As for summer? Expect more of the same decline, McCarthy says. Closed sale numbers will likely continue to fall until we reach whatever constitutes a new normal. “We’re not going to break even,” he adds. “We’re going to continue to decline.” So instead of seeing this as a downturn, take it as a sign of what (depressing) things are to come as you prepare for that new real-estate normal.
