Tour of 171 Marsh St., Belmont, former home of Gov. Mitt Romney
Tour of 171 Marsh St., Belmont, former home of 2012 presidential candidate and Massachusetts’s 70th governor, Mitt Romney.
Joanna K. Tzouvelis, wickedlocal.com
- The median price for a single-family home in Massachusetts rose to $575,000 in February, a 4.9% increase from the previous year.
- Experts attribute the rising prices to a persistent lack of inventory in the Massachusetts housing market.
- Despite mortgage rates stabilizing, buyer demand remains strong, indicating a continued seller’s market.
Single-family home sales in Massachusetts rose slightly in February, when compared to last year — but so have prices.
According to The Warren Group, a Peabody-based provider of real estate data, the median price for a single-family home sold last month in Massachusetts was $575,000 in February, up 4.9% from the February 2024 median of $548,250.
“This is certainly a byproduct of the persistent lack of inventory,” Colleen Barry, CEO of Gibson Sotheby’s International Realty, told Wicked Local. “There continues to be competition for each well-priced property, particularly in the entry and move-up categories.”
The Warren Group also reported 2,136 single-family home sales last month in Massachusetts, up 4.2% from the February 2024 total of 2,050.
“While other parts of the country have seen some price stagnation, we continue to see increases,” Barry said. “This is largely due to the lack of inventory — our area is desirable, and we don’t have the kind of new housing starts needed to ease the lack of inventory. And sellers are not seeing enough viable options to make their next move. It is a logjam of sorts.”
Do current mortgage rates represent a ‘new normal’?
Each agent has his or her own unique experiences “on the street,” and they vary from community to community, added Norman D. Hodson of Keller Williams Realty.
“The common sentiment seems to be that the fall 2024 market through year end was rather unremarkable,” he said. “Perhaps the 2024 buyers hoped for one final big drop in interest rates, or the November 2024 election season was simply too exhausting to deal with and focus on anything else.”
Hodson said buyers have likely accepted current interest rates as “the new normal,” and may not want to wait for any additional significant drop in rates. According to Zillow, the average 30-year fixed mortgage rate is 6.47%, with the 15-year fixed rate at 5.86%. Two months earlier, those figures were 7.04% and 6.27%, respectively.
“We’re already seeing some pre-spring positive energy from buyers,” Hodson added. “While inventory may not have made a dramatic jump in the number of new listings yet, some 2024 ‘leftover’ inventory is getting absorbed.”
Real estate pros expect strong demand for spring market
February’s Warren Group report is consistent with a trend seen for the past year, with each month reporting higher median sale prices and volumes compared to the previous year, said Stewart Young of LandVest/Christie’s International Real Estate.
“At the end of February, we are seeing a typical midwinter slowdown compared to Q4 2024 but with increases compared to this time last year,” he said. “For the spring, we expect continued improvement in inventories and strong demand resulting in more choice for buyers — but still a seller’s market.”
There’s no denying that due to high demand and low inventory, this is a new high-water mark, said Pauline Bennett, a regional president at Coldwell Banker Realty.
“It’s a step in the right direction,” she said of The Warren Group’s February report. “Demand is still outpacing supply. Getting the (mortgage) rates into the sixes really spurred on activity in Q4 and keeping them in the sixes is key to keeping momentum.”
Real estate professionals are optimistic about the usually busy spring market.
“We expect to continue to see prices increase — not at the levels we saw during the pandemic, but somewhere in the 5% range,” Barry said. “Of course, if mortgage rates hit the fives, we expect to see more inventory, as homeowners see less of a delta between their new mortgage rate and the existing low rates from several years ago.”
Bennett believes the coming months will be “robust.”
“Seasonality has returned, and we expect lots of sellers who have been waiting for some spring days to enter the market and enjoy the strong buyer demand,” she said.
