Warren: Rising Rates May Send Buyers To Rural Markets
MAY 17, 2022…..So many people are fighting for the precious few homes for sale in Massachusetts that the intense competition in April propelled the median sale prices of both single-family houses and condos to new record heights, real estate market watchers at The Warren Group said Tuesday.
“The median single-family home price of $560,000 marked a new all-time high for Massachusetts,” Tim Warren, CEO of The Warren Group, said. “Under normal conditions, this would be a reason to celebrate, but only if you currently own a home and you’re looking to sell and don’t need to buy a new home. With such limited inventory — not only across Massachusetts, but also across the country — finding that next place to live will prove to be challenging.”
There were 3,862 single-family home sales in Massachusetts last month, a 14.8 percent drop from April 2021. The median sale price increased 9.8 percent from the $510,000 mark established in April 2021 to its new all-time high, the Warren Group said.
April sales were about equal to sales in April 2020, at the very beginning of the pandemic, but the median price since then has soared 30 percent from $430,000 to $560,000, The Warren Group said.
The 13,580 single-family home sales in Massachusetts so far this year represent an 11.1 percent decline compared to the first four months of 2021 and the year-to-date median sale price of $510,000 is up 9.7 percent from the same period in 2021 and up 26.9 percent from the same period in 2020.
Potential buyers in search of a condo did not fare much better last month. The 2,149 condo sales in April 2022 marked a 15.2 percent decrease from April 2021. Meanwhile, the median sale price “took off like a rocket in April,” Warren said, shooting up 11.6 percent on a year-over-year basis to $530,000.
“As the spring and summer housing markets continue to heat up, it will be interesting to see where prices go from here,” he said.
Among Massachusetts’ 14 counties, Nantucket leads the way with an April median sale price of $1.627 million and was the only county to post a drop in median price from last April (down about 20 percent from last year’s mark of $2.025 million). There have only been 40 homes sold on Nantucket so far this year (with a median price of $2.223 million) compared to the 70 sold at this point last year.
Martha’s Vineyard is close behind as Dukes County last month reported a median sale price of $1.325 million, up almost 33 percent from $1 million last April. Like Nantucket, year-to-date sales on the Vineyard are down markedly — there have been 61 homes sold in Dukes County this year ($1.1 million median price) compared to 109 at this point last year.
Plymouth County most closely mirrors the statewide picture. April sales there dropped more sharply from April 2021 than the average (down 21 percent versus the statewide average of down 15 percent) but the median price in Plymouth County ($530,000) was closest to the statewide number of $560,000 and Plymouth’s 12.5 percent growth was similar to the statewide 9.8 percent figure.
Only two counties — Hampshire and Franklin — saw sales increase from April 2021 to April 2022 and only Hampshire County is ahead of its 2021 pace four months into 2022 (though Franklin County is within a handful of sales of its 2021 mark).
“Meanwhile, as interest rates continue to increase, buyers will continue to expand their searches to more rural communities — adding even more competition in markets that have historically been more affordable,” Warren said.