Jim Morrison – Boston.com Correspondent
July 19, 2022 3:43 p.m.
If Greater Boston’s frenzied residential real estate market was like a big pot of boiling water, messing up the stove, in June that pot was just boiling — still piping hot, but a little more controlled.
According The Warren Groupa real estate analysis company. The median selling price of a condo in the state rose 10.2% year over year to $539,000. This is the third month in a row that it has been at or above $500,000.
But “this is the first time the median price of a single-family home in Massachusetts has exceeded the $600,000 mark,” Warren Group CEO Tim Warren wrote in a press release. “Keep in mind that only 14 months ago the midpoint price of $500,000 was first breached. I doubt we’ve seen the end of it. Pundits continue to speculate that with the recent rising interest rates, prices may plateau in the near future, but I’m not sure we’re at the tipping point yet. Price increases are moderating this year, but they are far from stagnant. There are so many buyers and not enough houses for everyone.
Mortgage interest rates are down slightly from last month. The national average for a 30-year fixed rate mortgage was 5.51% last week, and the average for a 5/1 variable rate mortgage was 4.35%. based on Freddie Mac.
mortgage broker Shant Banosien of Guaranteed Rate said that if the Federal Reserve raises the target federal funds rate by 0.75%, or even 1%, as some investors expect, it could actually be good news for homebuyers.
“If the Federal Reserve raises rates by 0.75% next week, as they have indicated, we will see rates stay pretty much where they are, because that is what everyone expects. and it’s already priced into today’s rates,” Banosian said. said. “If they go out and raise rates by 1%, I think you might even see mortgage rates go down a bit.”
He said one of the reasons mortgage interest rates are high is that some investors believe the Federal Reserve is not doing enough to control inflation. A full 1% increase will tell investors that they take inflation very seriously.
Here in Massachusetts, sales are slowing down a bit. The number of single-family home sales in the first half of the year fell 10.5% from the same period last year, according to data from the Warren Group. Condo sales fell 11.6%.
As expensive as housing is throughout the state, it is much more so in Greater Boston, where the the median sale price of a single-family home was a record $900,000 in June, up 10.9% year-over-year, according to the Association of Greater Boston Realtors. The median sale price of a condominium was $700,000, up 9.4%.
These prices have risen so much, so quickly, that some buyers have looked elsewhere. A recent report by Redfin said the Boston metro area has the sixth highest net population outflow in the country, with rising real estate prices prompting potential buyers to seek out more affordable locations like Portland, Maine.
“We have a lot of people moving out of town because of the change in work environment and high prices,” said Melvin A. Vieira Jr. president of the Greater Boston Association of Realtors. “But this does not affect our pool of buyers. We still don’t have enough inventory. Interest rates are up, inventories are up, sales are down, prices are up, some companies are laying off, but many more are hiring. We see many anomalies in the market. Not all signs point in the same direction. We are in uncharted territory.
Anthony Lamacchia, Broker/Owner of Lamacchia Building, said it’s too early to tell if the changes in the market will match trends, as the summer months are generally slower. He said he will know a lot more about how this is all going to play out when the fall data comes out.
“We’re going to see some market easing,” he said. “It’s usually in the fall that these things really set in. I don’t think it will be a 2008 scenario with prices dropping 30-40%.
“When we measure 2022 as a whole, prices will still be up from 2021 because they have risen so much in the first six months. higher than last year.
More from The Warren Group:
View home sales data community by community.
View home sales data by county.
And listings of recent home sales in Boston, Cambridge and North, South and West Boston.