This may be the reason why Massachusetts' housing market is cooling off
PEABODY — The residential real estate market has cooled both locally and statewide after being confronted with high prices and rising mortgage rates, according to a new report from The Warren Group.
Sales of both single-family homes and condominiums declined dramatically last month, according to the provider of real estate and transaction data.
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There were 5,266 single-family homes sold in Massachusetts during July, down 17.4% from the same month a year earlier, when there were 6,374 transactions.
Meanwhile, the median price for a single-family home sold in the state last month was $585,000, up 8.3% from the July 2021 median of $540,000. Last month's figure represents an all-time high for July.
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In a statement, Warren Group CEO Tim Warren pointed to higher mortgage rates and home prices, while noting that wages “are not keeping pace with inflation that is now running at 8.5%."
Plus, "homebuyers face a very low inventory of homes for sale," he said. "All of this leads us to a cooler real estate market."
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Many MetroWest communities experienced year-over-year declines in single-family home sales last month, including Framingham (68, down from 79); Natick (28, down from 36); Franklin (27, down from 53); Marlborough (31, down from 33); and Bellingham (16, down from 21).
Warren added that the trend has been in place for "many consecutive months," noting that as prices continue to reach new highs, the total number of sales declines on a year-over-year basis.
"Evidence in the cooling is seen in prices," he said. "They are rising at a slower rate, gaining just 9% so far this year after gaining 14% last year.”
The median sales price for a single-family home sold in Framingham this year is $614,000, up 6% from a year ago at this time ($579,200). It's up 9.4% in Marlborough (from $480,000 to $525,000), but a bit more in Milford (14.6%, from $440,500 to $505,000) and Natick (14.7%, from $736,500 to $845,000).
Through the first seven months of this year, there have been 29,819 single-family home sales in Massachusetts, an 11.8% decline from the first seven months of 2021. Meanwhile, the year-to-date median price is $553,000, up 9%.
Sales of condominiums have dropped more sharply so far this year. They're down 24.5% statewide through July 31 (from 2,916 last year to 2,201 this year). But their median sales price has risen 10.9%, year over year, to $521,000.
“The median condo price has now been above $500,000 for four consecutive months, and $521,000 marked a new all-time high for the month of July,” Warren said. “The median condo price is up 10.9% in July, outpacing the 8.3% gain in the single-family median price."
Through July 31, there have been 14,465 condo sales statewide, down 13.9% from the first seven months of 2021. Their median sales price this year is exactly $500,000, up 8.7%.
This article originally appeared on MetroWest Daily News: Mass. home sales decline in July as higher prices, rates take toll
