The Lamacchia Housing Report presents overall home sale statistics and highlights the average sale prices for single families, condominiums, and multi-family homes in Massachusetts and New Hampshire for May 2021 compared to May 2020. It also looks at other metrics in Massachusetts like Homes Listed for Sale, Homes Pending, and Price Adjustments made to active listings, as they are often the best indicators for predicting future trends in the market. This month’s report will be unlike years past due to the lingering effects of COVID and the massive amount of home sellers that didn’t list last year, and so 2019 will be discussed to compare this month to a market not impacted by a pandemic.
Massachusetts Home Sales Up 49.3%
There were 8,630 sales in May 2021 over 5,780 in May 2020 which is a 49.3% increase in total sales year over year. Singles are up 29.2%, condos are up 94.8%, and multi’s are up 90.1%. It’s important to also look at what the comparison would be over 2019, which was a market unaffected by the pandemic. May 2021 sales are down over May 2019 by 4.4%, as total sales in 2019 came to 9,025.
Average prices increased over May 2020 by 18.5% now at $573,616 from $484,267. Single-families are up 24.1%, condo prices increased by 12.6% and multifamily prices increased by 8.1%. Low inventory and high demand caused this jump in prices, as you can see in the chart below. It’s possible that with more sellers placing homes on the market, and with fewer buyers competing for homes that prices will plateau over the summer, or at the very least increase at a less rapid rate.
The log jam for the buying and selling process halted the real estate market this time last year which is why this year seems like the increases are so high. The shutdown caused 2020 numbers to artificially decline, thereby making 2021 seem very elevated but it’s really just playing catch up.
Homes Listed For Sale:
There was a 9.5% increase year over year for the number of homes listed. 9,959 homes were listed in 2021 compared to 9,091 in May 2020. Last May was still struggling to catch up and this May we are seeing some lingering want-to-be sellers hesitating to list, though that is letting up slightly as the Summer begins.
To this point, single families, which took the hardest hit over the past year in terms of inventory, are up 0.6% over last year for listings but are down 34.1% versus 2019. Similarly, single family pending sales are up 7% over 2020 but decreased 11.8% when compared to 2019.
Homes Placed Under Agreement (Pending Home Sales):
Pending sales over May 2020 are up by 20.8% but only up by 2.7% over 2019. Those buyers who waited or who couldn’t find the house they wanted due to sellers not listing during the pandemic are finally securing those homes they’ve been searching for. The more sellers list, the more pending sales will increase due to the massive amount of buyers still out there. With pending sales up, closed sales will again likely be up next month.
Price changes are up 3.4% this year over May of 2020, with 583 adjustments compared to 564 last May. Not a significant year-over-year change, but when you compare this past May to May of 2019 when there were 1,254 price changes, there’s a 53.5% decrease. May is typically the time when sellers realized they priced a little too high and need to bring it down a bit to attract more buyers.
This typically happens around May- sellers are familiar with what people were selling for over the winter and so they think they can price based on the winter market. The winter market sees a lot of buyer competition, which drives prices up, but the summer market is more of a buyer’s market. It’s a great time to buy, as buyers have more selection, but sellers need to know that they need to price accordingly. This May isn’t typical because the market is bouncing back from the pandemic and many sellers can still sell without having to drop their price.
New Hampshire Home Sales Up 14.5%
New Hampshire sales increased by 14.5%, now at 1,877 over 1,639 in May 2020. Single family sales increased by 6.8% year over year, condos increased by 29.2% and multi-families increased by 98.2%.
Average prices are up by 30.8%, now at $447,011 from $341,700 in May 2020. Prices increased in all three categories, up for singles by 52%, 17.6% for condos, and up by 31.3% for multi families.
The same theories apply for New Hampshire as Massachusetts, in that this month’s year over year comparison shows the impact of the pandemic on sales and prices as the shutdown caused the market to decline this time last year and now we are starting to see signs that this year is catching up.
As the summer progresses, “want-to-be sellers” will start listing more and more so buyers will have more selection, and will hopefully not have to compete as much to secure a home.
Buyers will need to be advised that there’s nothing wrong with the house if others aren’t lining up out the door to see it, or if the home takes longer than 48 hours to accept one of many offers. This is a good sign that the market is becoming a little more balanced and buyers should take advantage of it.
Sellers will also benefit from not overpricing their home, despite talks of what neighbors sold for and how generally, prices are increasing overall. The better-priced homes always sell faster and for more money than homes that are overpriced and sit for too long on the market. The market is trying to catch up to where it would have been had COVID not put a massive wrench in the works, but it’s not quite there yet.
Data provided by Warren Group & MLSPin for MA, and by NEREN for NH then compared to the prior year.