Massachusetts’ Housing Inventory Hit Hard by COVID-19
Posted By: Boston City Properties
The coronavirus pandemic has wreaked havoc on virtually all aspects of everyday life, and its effects on Massachusetts’ housing market are downright stark. In March 2020, which is when the pandemic really started ramping up across the United States, the commonwealth reported its lowest number of homes for sale since at least 2004. Indeed, the market was hit even harder than it was during the housing crisis and Great Recession of 2008. Not surprisingly, however, demand continues to be high – and there is little doubt that the market will continue to thrive despite the ongoing pandemic.
In March 2020, the number of single-family homes listed for sale in Massachusetts dropped by 32.9 percent versus that of March 2019. Likewise, the number of condos that were listed for sale across the commonwealth dropped by 27.8 percent versus the same month the previous year. This trend continued into April and May, but it does not appear that demand waned significantly during that time. In other words, despite COVID-19, people are still out there looking for homes to buy. The issue, however, is that many would-be home sellers are holding off for now due to the uncertain times.
Not surprisingly, home sales also dropped in the wake of the novel coronavirus. Sales of single-family homes across Massachusetts dropped by 1.1 percent in March 2020 versus the same period in 2019. Similarly, sales of condos across the commonwealth dropped by 2.7 percent in March 2020 versus March 2019. Again, however, these drops are more indicative of a lack of inventory than a lack of demand. As people become accustomed to the new post-COVID world, odds are good that many will become comfortable with listing their homes for sale again – and that should help to spur increased sale figures in the not-too-distant future.
Although home sale listings and actual sales all dropped in the wake of the COVID-19 pandemic, median prices continued to rise. In March, for example, the median sale price for a single-family home in Massachusetts was $416,000, which represents a year-over-year increase of 6.5 percent versus the same period in 2019. Condo prices rose even faster and more aggressively. In March 2020, the median sale price for a condo in MA was $428,500, which represents a year-over-year increase of 14.3 percent versus the previous year.
Indeed, if house hunters think that there are bargains to be had because of COVID-19, they are in for sticker shock. Of course, it makes sense that prices rose as they did given the severe lack of available inventory. Even before the onset of COVID-19, housing availability had been an ongoing issue across the commonwealth. With fewer people listing their homes for sale than usual – especially in the spring, which is traditionally a busy time for housing markets across the country – pickings have been slimmer than ever. In turn, sellers have been very well-positioned while buyers have had to make concession after concession.
As Massachusetts continues reopening, it will be interesting to see how the housing market responds. Construction projects across the commonwealth have been back in action for some time now, but it is unlikely that those efforts will have any type of impact on the housing market for a long time to come. The ongoing, long-term economic effects of the pandemic remain to be seen, and things like ongoing high levels of unemployment and questions regarding when and if schools can reopen in the fall will continue to impact the market. Stay tuned to Boston City Properties for ongoing information about the housing market in Boston and across Massachusetts.