For only the fourth time since The Warren Group began its current method of data collection in 1987 – and for the second consecutive month – the median price of a condominium in Massachusetts exceeded that of a single-family home.
That’s right – this has only happened four times in history, and half of those times were in the last two months. Three is a trend; it if it happens again in April, we’re going to have to stop writing editorials about what we’ll have to assume is the new normal.
The median price of a condo was $389,000 last month, $35,000 higher than the median price of a single-family home at $354,000, according to analysis from The Warren Group, publisher of Banker & Tradesman.
March’s condo median was 20 percent higher than the same month in 2017, while the median single-family sale price increased 5.4 percent. For the year (so far), the single-family median still exceeds that of condos by almost $13,000.
Of course, these median sale prices are calculated on a statewide basis, and there are far more single-family homes than there are condos in the Bay State. Single-families exist in a wide range of geographies and economic climates, while the condos tend to be clustered in and around cities – particularly Greater Boston. As a result, the city’s condo market, and all of its new luxury units, has an outsize effect on the statewide median price, like the wave of March closings at The Fallon Companies’ 50 Liberty on Fan Pier.
As inventory remains at record low levels, most of the new housing coming online is condos – and luxury ones at that – not single-families. Theoretically more stock means reduced prices, even if most of the new stock is expensive, but not in inventory-starved Greater Boston; the median price of a condo in Suffolk County was $620,350 in March and has increased for six consecutive months.
But while Boston may think of itself as the Hub of the Universe, or at the very least of Massachusetts, it can’t take all the credit; median condo prices were also up by double digit percentages in Barnstable, Berkshire, Plymouth and Worcester counties in March.
There’s a lot of demographic details in Massachusetts’ housing market, from the Millennial desire for city living to the location of job hubs to the tragic state of our infrastructure.
None of these details are news to B&T readers, nor it is the picture they paint of housing prices gone insane and a population struggling to keep up. Financing a home purchase is increasingly difficult for first-time buyers, who are an important economic driver in the housing market, not only in Boston but across the country. Inventory continues to drop across the state and the country, pushing prices ever higher, and it doesn’t look like we’re anywhere close to the peak.
The rollercoaster of residential real estate is still climbing, and the drop is going to be breathtaking.
