Back again for another hyper-local housing market update, because the national market trends don’t alway match the Boston market trends. All data below is for what we’re calling “Greater Boston” (Boston, Brookline, Cambridge and Somerville), condos & single family homes, pulled from MLSPin.
One other thing to consider while reading through - October sales data is for homes officially closed out, meaning they likely went under contract in mid August to late September. Sold market data tends to trail real time by about 45 days.
So let’s dive in, and I will do my best to keep this as simple as possible!
There is a lot of fear out there that home prices are crashing. This is clearly not the case (at the moment) here in Greater Boston. The median sale price is up 4.5%, YoY for October. And yes, there was a blip in September where YoY prices seemed to have fallen flat, but they clearly have recovered. And averaging out the last 3 months compared to the same period in 2021, sold prices are up 3.2%. While it might feel far off from double-digit year-over-year price jumps that we saw over the last couple of years, remember, that type of market was simply not sustainable, nor normal. Gradual increases like this are.
One more thing that I want to make a quick note of - look at the pricing pattern for the last 3 months compared to 2019, it’s quite similar… and we will see this again in some more charts below.
You are probably reading plenty of headlines saying things like “Homes sales have dropped significantly!” A common misconception about that line is when they say home sales they mean the literal number of homes that are selling, not home prices. And those national headlines are true, there is no question about that. In October we saw 437 homes sell, compared to 704 back in August. The drop from August to September & October was big. Where else did we see a similar pattern? Fall of 2019. Did everyone say the housing market was going to crash in the fall of 2019? No.
Home prices are holding steady but we’re seeing less activity in the market.
The average time it takes to get an offer accepted on the homes that ARE selling is growing (although still not as long as this time of the year in 2019). The days of one week on the market and then sold are behind us. So if you are a seller considering selling your home, just keep in mind it will take a bit longer than what you’ve been reading about the last year. And if you’re a buyer, don’t be afraid of those homes that have been sitting for a month, that’s becoming the norm!
The chart above is showing two different data points. The lines are showing where the homes sold in relation to the final asking price, and the bars are showing where the homes sold in relation to their original asking price (meaning, before any price drops). I like showing this because it can sow how effective price drops can be and how pricing is so so important in today’s market.
The homes that are selling are getting offers right around their final asking price, once the price finally makes sense. There is not this wave of homes selling at 10% - 20% off their asking price. However, you can see that coming into October, many homeowners had to adjust to this new, slower market, and not get as aggressive with their pricing and make some drops to get an offer on their home (see the 2 charts below).
The amount of price reductions we’re seeing on homes in the market is actually quite normal. Both the fall of 2019 and 2020 saw more price reductions happening. However, we’re currently seeing the largest drops in price. To me this shows me that sellers/agents who priced their homes based off of spring prices may have gotten a bit ahead of themselves and have had to make some serious adjustments as the market slows down a bit. You can’t get crazy about your pricing in this market if you want to sell.
In summary, fewer homes are selling going into the fall, but pricing is holding strong and still heading in a positive direction. But if you need to sell your home, don’t get too aggressive with your price, pricing it right will make all the difference right now.
See you in December.