Between lower foot traffic at open houses and a slight reduction in the number of bidding wars reported by a major brokerage, it looks like buyer demand has eased slightly in the Boston area.
Redfin reported that only 78.3 percent of offers written by its Greater Boston agents faced competition in May, down from 80.3 percent in April but up significantly from May 2020’s 67.2 percent.
“After months of surging prices and low inventory, some house hunters are moving to the sidelines – either because they’re priced out or burned out,” Redfin Chief Economist Daryl Fairweather said in a statement. “Americans are spending more of their money on things like travel and dining out now that pandemic restrictions are being lifted.”
The Greater Boston Association of Realtors also reported a downturn in open house foot traffic last month, with fewer buyers overall. The cause, said GBAR 2020 President Dino Confalone, is likely a combination of factors: some are opting to renew leases and wait for a less frenetic market, while others don’t want to get financially “overextended” in bidding wars.
“We expect sales to slow and the run up in prices to ease in the second half of the year, as the current level of activity isn’t sustainable long-term,” Confalone, a Gibson Sotheby’s International Realtor, said in a statement. “We’re already seeing homes with inflated values sitting longer and undergoing price adjustments. Properties should be fairly priced, in excellent condition, and have a desirable location to sell quickly, even in today’s seller’s market.”
Despite this slight cooling of buyers’ ardor, however, the May market in GBAR’s territory remained tighter than ever, with only 1.1 months’ supply of single-family inventory, down from 1.5 months in April. Only 1,272 active listings were to be found in the area, which roughly covers the area including and inside the Route 128 belt, plus many MetroWest towns. Homes moved at a brisk pace, taking on average only 19 days to go off-market in May, as in April.
And all five counties that make up the larger Greater Boston region saw double-digit percentage increases in their median single-family sale price in May according to The Warren Group, publisher of Banker & Tradesman:
- Suffolk County: Up 15 percent to $712,889
- Middlesex County: Up 16 percent to $695,000
- Norfolk County: Up 19 percent to $665,000
- Essex County: Up 25 percent to $600,000
- Plymouth County: Up 21 percent to $515,000
“[Statewide single-family] sales dipped almost 10 percent from May two years ago,” Warren Group CEO Tim Warren said in announcing the company’s May housing sales report. “I’ve been saying for quite a while that it’s only a matter of time before demand wouldn’t be able to keep up with supply, and this could be the first time we have a concrete data point indicating its coming to fruition. As inventory continues to dwindle, we’ll continue to see declining sales and inflated prices in the coming months.”
The condominium market was also very tight, but measurably healthier, with 1.6 months’ supply of inventory compared to 1.8 in April, from 2,146 active listings, down only 6.6 percent from last month. New listings hitting the market in May totaled 1,661, down from 2,086 in April. Transactions sped up slightly compared to April, with units taking 30 days to go off-market compared to 32 days last month.
Calmer waters could be on the horizon, Confalone said, with a new wave of listings hitting the market in the first two weeks of June that’s sent single-family and condo inventory up by 20 percent.
