Greater Boston’s housing market remained red-hot in October, with prices surging and the number of sales at record highs. All except for in one place: downtown.
The recent split between increased sales of single-family homes in the suburbs and declining sales of urban condominiums ― particularly high-end condos in the core of Boston ― became more marked as the fall housing market hit its peak. The widening gap highlighted the premium home buyers are putting on space during the COVID-19 pandemic, as opposed to wanting a relatively small perch in the heart of the city.
Figures released Monday by the Greater Boston Association of Realtors show sales of single-family homes in the region rose 37 percent in October compared with the same period last year, with the median price hitting $700,000, easily a record for the month and up 17 percent from October 2019.
Condo sales jumped, too, as did the median price ― a 4.6 percent increase to $575,000, also a record for the month.
The figures cover 64 communities across Middlesex, Norfolk, and Suffolk counties. But the association noted that within the City of Boston, which accounts for about one-third of the region’s condo market, sales were up just 1 percent and the median price fell 6.9 percent, to $642,500. The number of listings in Boston was up 51 percent compared with October of last year.
“It’s a strong sellers’ market everywhere except the downtown Boston condo market,” said Jason Gell, an agent with RE/MAX Unlimited in Brookline and president of the association. “It’s no longer location, location, location that generates top dollar, but rather the property’s price, condition, and location that are all factors.”
Those factors are powering huge demand for single-family homes, which coupled with tighter-than-usual supply is driving prices upward and sparking fierce competition. The average single-family home is on the market for less than a month, with many receiving multiple offers. Mortgage interest rates below 3 percent are also fueling demand and enabling buyers to up their offers.
“We’re having a tough time keeping up with buyer demand,” Gell said, “Especially in suburban single-family market where homes are going under contract from one to three weeks faster than a year ago and the inventory of properties for sale is becoming depleted.”
Indeed, the number of for-sale listings was down 31 percent compared with this time last year, though new listings of single-family homes climbed 7 percent.
Similar trends are playing out in housing markets across the country. Figures out Tuesday from the S&P CoreLogic Case-Shiller index found home prices climbed 7 percent nationwide in September, accelerating from 5.8 percent in August to their fastest annual pace in more than six years.
Among the nation’s 20 largest markets, price growth was fastest in Western cities such as Phoenix and Seattle, and slowest in New York and Chicago. At 7.7 percent, gains in Boston outpaced both the national average and the average of 20 biggest cities.
CoreLogic deputy chief economist Selma Hepp said she expects the market to remain strong in the months to come. Despite increasing COVID-19 infection rates and an economy that’s once again showing signs of weakness, there are still a lot of people looking to buy a house.
“While the exploding COVID-19 infection rates suggest weighty economic uncertainty remains, housing markets continue to receive positive tailwinds, including the largest cohort of millennials, age 28 to 30 (about 15 million), are coming closer to the typical, first-time, home-buying age,” Hepp said in a statement. “Additionally, mortgage rates are expected to remain at or below 3 percent into 2021. These two factors will bolster the home buying market and continue propping up home price growth.”