The Massachusetts housing market rocketed back in 2013 with packed open houses, bidding wars, and ever-rising prices, and analysts predict that a shortage of properties could make house hunting even more competitive next year.
“I think it’s been a banner year for real estate,” said Sam Schneiderman, president of the Massachusetts Association of Buyer Agents. “We knew that the market was tight. We never realized it was going to produce this kind of frenzy.”
For example, a three-family home in Brighton that Schneiderman listed in mid-December got 10 offers in 48 hours — before any of the prospective buyers had even looked at the property.
Pent-up demand, more confidence in the economy, and rising interest rates propelled buyers into the market.
After a slow start to 2013, sales picked up in May and then kept thumping the previous year’s numbers by double digits until late in the season.
Homes were available for shorter and shorter periods of time, and some buyers paid cash or were willing to waive standard contingencies, such as home inspections.
A total of 45,979 single-family homes were sold through November, a 6 percent increase from 2012, according to data released Monday by the Warren Group, which tracks Massachusetts home sales.
Prices shot up even higher. Through the first 11 months of the year, the median price of a single-family home was $322,000, an 11 percent increase over the previous year’s $290,000.
The Massachusetts condominium market shared in the hot streak, with sales increasing by almost 6 percent, to 18,683 from 17,655 a year earlier.
The median price for a condo rose through November by almost 7 percent from the previous year to $295,900.
While 2013 might have felt at times like the boom years that preceded the housing crash, sales and prices were still below the 2005 peaks. That year, more than 60,500 single-family homes sold in Massachusetts for a median price of $355,000.
Still, prices are likely to keep increasing until the supply of homes on the market rebounds, analysts said.
A low inventory of homes has made the ones on the market even more alluring and further pushed up prices, said Kimberly Allard-Moccia, the 2013 president of the Massachusetts Association of Realtors.
“It’s a double-edged sword,” Allard-Moccia said. “We’re at a point where we really need homeowners who have been thinking of selling to make the decision to do it.”
At the end of November, 18,428 homes were for sale in Massachusetts, according to the real estate association, down from 31,000 at the same time in 2010.
As a result, sales are starting to slow while prices are rising, Allard-Moccia said.
In November, sales dropped by 2 percent from the previous year to 3,903. However, prices rose by 4 percent to $307,000 for the month. It was the first decline in sales since April and could signal that the prices are starting to pinch consumers, said Timothy M. Warren Jr., the chief executive of Warren Group.
“I think the market is sorting itself out,” Warren said.
Price increases of 10 percent or higher aren’t sustainable, because workers aren’t getting those kinds of raises, Warren said.
“Real estate prices have to be reflective of income,” he said.
Recent reports have raised concerns that rising home prices could outstrip incomes and create an affordability crisis, distancing working-class, moderate-income families from home ownership.
Rental housing is also becoming much more expensive. According to a Harvard University study release earlier this month, Massachusetts has the sixth-highest median rent in the nation, at $1,000 a month. Additionally, one in four renters must spend half their income on housing.
An increase in the housing inventory should help to ease some of these pressures and make homes more affordable, Warren said.
As prices rise, homeowners may feel more comfortable putting their homes up for sale and moving, knowing they will get the prices they want, Warren said.
Still, the days of getting a bargain deal on a house have probably vanished, Schneiderman said. “It’s a whole different ballgame.”