The Lamacchia Monthly Housing Report highlights home sale statistics, average sales prices, the number of homes listed and pending as well as price changes for single-families, condos, and multi-family homes in Massachusetts. For New Hampshire it presents home sale statistics and average sales prices. These factors, when compared year over year, are all indicators for predicting future trends in the market.
Highlights
- Mortgage rates have reached their highest level in over 13 years – hovering around 6% for the last couple of weeks. Anthony explains how this and other factors are contributing to the cooling down of the real estate market on Boston 25 with Gene Lavanchy.
- The FED increased rates to slow the economy and inflation down and bring the economy back under control from the pandemic-era stimulus that artificially kept the economy, especially the real estate market, running hot.
- With inflation on the rise, not only is the consumer’s mortgage payment increasing, but so is the cost of their other debt obligations and overall, their disposable income now affords them less.
Therefore, with buying power reduced, the market will see fewer buyers (i.e., lessening of demand). As a result, buyers will be awarded some reprieve from the intense competition on homes they have known over the last few years. Anthony explains the good side of these rate increases in a video here.- Important to note, this lessening in demand does not translate to ‘cheaper’ housing. Home prices are still predicted to continue appreciating as the year continues. Even though inventory is starting to rise at a faster rate, we are still seeing historically low inventory and homes listed are down year over year. Prices would only start to come down if inventory (i.e., supply), increased significantly.
- Nationally we have seen an increase in household income, meaning that people still have more money to spend on housing than they did previously. This did and still contributes to the bidding wars we have seen in the market over the past several months
- Buyers, we predict that rates will continue to increase, and each increase further diminishes your buying power. There IS a cost to waiting, so locking in a rate now and taking advantage of this market will ultimately be beneficial. Make sure to get reapproved at new rates and have a conversation with your lender to ensure you are informed and prepared in this market. Sellers, be cognizant of the approval dates from potential buyers.
- Sellers, the market has changed, but there is not a crash on the horizon. Lessening of buyer demand will impact how your home is sold, but that does not diminish the equity and value that your home has grown over the last three years. It will still be a lucrative endeavor for you to list your home. In this market, pricing your home right will be essential to creating competition to get it sold quickly and for the best price for this market.
Massachusetts Home Sales Down 8%
Sales are down 8 percent year over year with May 2022 at 7,941 over 8,630 last May. Sales are down across all categories.
- Single families: 5,139 (2021) | 4,788 (2022)
- Condominiums: 2,723 (2021) | 2,414 (2022)
- Multi-families: 768 (2021) | 739 (2022)
Average prices have continued their rise with another year over year increase of 10.8%, now at $635,641. Prices increased in every category.
- Single families: $643,632 (2021) | $716,867 (2022)
- Condominiums: $434,136 (2021) | $495,410 (2022)
- Multi-families: $631,083 (2021) | $671,764 (2022)
Homes Listed for Sale
There were 2.7% more listings this year compared to last May 2021, but these listings may be sitting on market for longer given the lessening of demand we are seeing in the market which will impact pending sales next month.
- 2022: 10,181
- 2021: 9,914
- 2020: 9,096
Pending Home Sales:
The number of homes placed under contract is down by 6.9% when compared to May 2021. This indicates that sales next month may also be down, especially now with rates on the rise, as contracts accepted is correlated to future closed sales.
- 2022: 9,455
- 2021: 10,161
- 2020: 8,458
Price Changes
Price changes increased by 26.9% year over year. Increased rates have diminished buyer affordability, causing a big downshift in demand which means sellers need to be pricing right if they expect to sell in this cooled off market. If you are a seller who hasn’t been able to sell within a few weeks and it is being marketed properly, the price is the first thing to consider adjusting.
- 2022: 731
- 2021: 576
- 2020: 563
New Hampshire Home Sales Down 6.3%
Highlights
- With mortgage rates hovering around 6%, there is no denying that the real estate market has changed. Now, buyers and sellers have to readjust their perspective and come into the summer prepared to take advantage of this cooling market.
- Increased mortgage rates will lessen buyer demand and bring calm to a previously frenzied market, but it does not translate to cheaper housing. Even though inventory levels are starting to pick up, they are still too low to cause significant decrease in home prices. Listings are also down year over year. These factors will keep prices high for the time being despite a lessening of buyer demand with increased rates.
- Sellers, you have grown equity over the last three years, so selling your home in this market can still be lucrative! Note, in this changed market, it is imperative that you are pricing your home competitively to ensure your home doesn’t get stuck on the market.
Single family and condo home sales have decreased, but multi-family home sales have increased when compared to May 2021.
- Single families: 1,341 (2021) | 1,230 (2022)
- Condominiums: 443 (2021) | 429 (2022)
- Multi-families: 112 (2021) | 118 (2022)
Prices overall have continued to increase, now up 10% to $492,858 compared to May 2021. Prices increased in every category.
- Single families: $488,483 (2021) | $532,119 (2022)
- Condominiums: $327,090 (2021) | $390,152 (2022)
- Multi-families: $441,993 (2021) | $457,009 (2022)
The market is adjusting to a pre-COVID market without stimulus without artificially low mortgage rates and stimulus. We expect it to be busy summer, but not quite as busy as the last two summers.
Data provided by Warren Group & MLS PIN for MA, and by NEREN for NH then compared to the prior year.