New year, fresh start? Not the case for Greater Boston’s housing market.
The market continued to decline in January by just about every measure, according to new figures out Tuesday from the Greater Boston Association of Realtors, including the region’s home values, which have remained stubbornly high.
The median-priced single-family home here sold for $707,250 last month, a 2.4 percent decline from the same time last year, when the median selling price was $725,000. Month-over-month, that figure dropped 4.4 percent from $740,000 in December.
“With the doubling of mortgage rates last year, we saw a significant drop in buyers’ purchasing power as well as a steady decline in competing offers for properties, and that’s resulted in some softening in home values,” said GBAR President Alison Socha, an agent with Leading Edge Real Estate in Melrose.
And while prices have ticked up and down somewhat irregularly, the number of home sales continued an eight-month downslide in January, as would-be buyers balked at higher interest rates and sticker prices that are still some of the highest in the nation. The housing market usually dips in the winter, but economists agree that the current market conditions are more than just a seasonal decline.
The 500 homes sold last month was the lowest January total since 2009, marking a 33.8 percent decline from the 755 sales in January 2022 and a 44.8 percent month-over-month decline from December, when 905 homes were sold. Condominium sales declined too, falling more than 24 percent from the 728 units sold in January 2022 to 553 last month.
The median selling price for condominiums did tick up, though, to $685,000 compared to $586,367 in January 2022, as buyers from the single-family market cut their losses and turned to what they could still afford.
“The reality is buyers can’t afford as much home as they could 12 months ago, so many are either unable or unwilling to get involved in bidding wars,” said Socha. “Sellers also have begun to adjust their asking prices to align more closely with current listings rather than trying to top what their neighbor’s property sold for, and that’s allowed prices to level out.”
Typically, declining single-family home prices would be good news for buyers, but mortgage rates have essentially canceled out any affordability gained from those declines.
The national average rate on a 30-year-fixed rate mortgage currently sits at 6.32 percent, up significantly from rates this time last year, according to Freddie Mac. That means a monthly payment on the median-priced house in Greater Boston is still around $1,000 higher than it was on the same-priced house a year ago.
Still, spring is typically when the market begins to churn again, and both prices and home sales are likely to increase. There are already some signs that buyers are tepidly returning to the market — requests for showings and foot traffic at open houses are on the upswing — and sellers may be soon to follow, said Socha.