If the March real estate market came in like a lion, it went out like a lamb … a lamb who just lost a nine-offer bidding war on an updated Colonial. Home sales and prices in Massachusetts both increased year over year in March, setting records once again, according to the Warren Group, a real estate analytics firm.
There were 3,849 single-family home sales in Massachusetts last month, marking a four-year high for the month of March, and a 2.5 percent increase over a year ago. The median price of a single-family home jumped 14.4 percent compared to March 2020, from $402,000 to $460,000, a new all-time high for the month.
The number of closed sales would no doubt be higher if there were more homes for sale, but inventory is at a record low for this time of year, according to the Massachusetts Association of Realtors. The number of single-family homes for sale was at its lowest point since at least 2004, when the association began reporting inventory data.
Adam Rosenbaum, a realtor with Century 21 Adams in Arlington, said the fierce competition for so few homes is taking a toll on both buyers and their agents. One of his buyers recently lost a bidding war in Melrose despite offering more than $200,000 over the asking price. “The market is more than just overheated — it’s a blast furnace, and in so many towns,” Rosenbaum said.
Another client, a couple competing against a dozen other offers for a house in Medford, was prepared to rent for another year if their fifth and final attempt at buying a single-family didn’t work out.
“We did a pre-inspection, so we were able to waive the inspection contingency,” Rosenbaum said. “And, of course, we offered 18 percent over asking.” This time, their offer won.
Bay State condo sales, meanwhile, took off in March, jumping 33 percent — from 1,699 condo sales in March 2020 to 2,260 last month. That’s the most condos sold in March since 2007. The median price of a Massachusetts condo didn’t climb nearly as much as that of a single-family, but it still set a new record for the month, increasing 2.7 percent to $440,500.
There could be any number of reasons behind the surge in condo sales, Warren Group chief executive Tim Warren said. Buyers frustrated by the fiercely competitive single-family market might be biting on comparatively lower condo prices. Or people may simply be experiencing a renewed attraction to urban living as walking to shops, restaurants, and vaccine appointments becomes more feasible.
“I think there’s some psychological benefit to people getting vaccinated and feeling that, by summer perhaps, they’ll be feeling less worried about coming into contact with people in close spaces — whether it’s in a condo building or on a city sidewalk,” Warren said. “Some of that is greater optimism about what the future will be, and some of it may be the pricing opportunities.”
In Suffolk County, which includes Boston, condo sales leapt an incredible 53.4 percent in March compared with a year ago. Year to date, sales of Suffolk County condos are up 20.6 percent over the first quarter of 2020, but the median price slipped 5.2 percent, from $674,950 in early 2020 to $640,000 in the first three months of 2021. (See county by county data here.)
The number of single family home sales in Barnstable County slid 9.6 percent in March, the first year-over-year drop in months. But the median price of a Cape Cod single-family continued to climb — up 27 percent year to date over the first three months of 2020.
“Probably the popularity and demand is still there,” Warren said. “[But] you can’t buy something that’s not for sale.”
In central Boston, including Back Bay, Beacon Hill, Downtown, the South End, and other neighborhoods, condo sales were up 12.6 percent year to date, but median prices slid 16.1 percent, falling from $1,061,250 in the first quarter of 2020 to $890,000 in 2021. First-quarter condo sales were up 40.3 percent in South Boston year over year, with the median price dropping 8.4 percent to $733,750. Charlestown saw a 137 percent jump in condo sales in the first quarter, with the median price remaining relatively flat at $740,000. And in East Boston, condo sales were up 49.3 percent three months into the year, and median prices climbed 4.8 percent in the first quarter, up to $597,500.
The condo market in Cambridge and Somerville more closely resembled Boston’s, with a dip in prices perhaps spurring sales activity. Year to date, the number of condo sales increased at least 22 percent in each city. But median condo prices were down 5.3 percent in Cambridge (to $765,000), and down 12.9 percent in Somerville (to $740,000), compared with the first quarter of 2020.
Year to date, the number of single-family homes sold in Medford have spiked 97 percent over the first quarter of 2020, and median prices were up 11.9 percent, from $642,500 to $719,000. Condo sales in Medford were up 73 percent in that time, with prices rising 9.7 percent, from $540,000 in early 2020 to $592,500 through March 2021. (See town by town data here.)
Nationwide, the median price of an existing home, which includes single families, condos, and townhouses, increase by a record-breaking 17.2 percent over March 2020, to $329,100, according to a separate release by the National Association of Realtors. While the number of existing homes sold increased 12.3 percent year over year, “the sales for March would have been measurably higher,” said NAR chief economist Lawrence Yun, “had there been more inventory.”
More homes for sale would also relieve some of the price pressure and multiple-offer situations frustrating buyers. But with the spring market in full swing, Warren is doubtful that any flood of inventory is forthcoming. “I don’t know if we’re going to see a lot more listings,” he said. “The spring market is here, but no realtor has told me that they’ve got 17 new listings and everybody’s happy. They’re all saying, ‘My buyers are going crazy.’”