Greater Boston’s housing market kept chugging upward to start the year. But there’s still not much to buy out there.
Single-family home prices ticked up 2.7 percent in January, compared with the same month last year, hitting a median of $605,000, according to data out Wednesday from the Greater Boston Association of Realtors. Condominium prices climbed at a similar pace, 2.2 percent, to $577,500. Both were record highs for the month.
The number of sales surged, thanks to a wave of new listings in the fall and the fairly mild winter, though January remains a relatively slow month in the market. But new listings fell 13 percent compared with January 2019, and the overall number of homes on the market continues to slump.
With the busier spring market nearing, that could cause prices to rev up even faster, especially if interest rates remain low and the job market remains strong, said GBAR president Jason Gell, an agent with Keller Williams Realty Chestnut Hill in Newton.
“There is a tremendous need for more inventory as we head into the peak home-buying months,” Gell said. “With inventory so low, today’s buyers are often competing against many others for a limited supply of properties on the market, and that’s putting a lot of upward pressure on prices.”
It’s the same dynamic that has played out in Boston’s housing market for several years, with demand steadily outpacing supply and the competition to buy fierce.
Bidding wars and super-quick sales have eased a bit, particularly at the upper end of the market, as prices have climbed out of reach for many would-be buyers. But the market remains tilted in favor of sellers, with about a two months supply of homes for sale at the current pace, far below the six months that real estate agents consider the barometer of a “balanced” market.
That deep and persistent imbalance between supply and demand has sparked a broad coalition of support for legislation to allow more construction, particularly in suburban towns that ring Boston. Governor Charlie Baker has been pushing hard for a bill that would make it easier for towns to loosen their zoning to enable denser development, but progress on Beacon Hill has been slow. Other measures being discussed include mandating multifamily housing near MBTA stations and making it harder for neighbors to sue to stop development.
However it happens, the region needs more places for people to live if it hopes to remain a place middle-class families can afford to call home, Gell said.
“The best way to control price growth is to increase supply,” he said. “The economic health of the region and our ability to keep home prices and rents affordable demand it.”