August 2023 Real Estate Market Update
July treated the Single Family, Condo and Multi-Family Market… WELL! With one market that was WAYYY up!
Is this the good time before the storm?
If you are looking to hear about the Massachusetts Real Estate Market data for the month of July for Single Family Homes, Condos and Multi-Family properties… Then you are in the right place.
It’s important to know this information if you are in the market to buy or sell a home, going to be in the real estate market in the future or just want to know what is going on in regards to what is most likely your largest investment.
Let’s get down to business, but first…
Hi I am Jeff Chubb – A recovering Investment Banker turned Real Estate Agent that has sold more then a 1,000 homes and is one of the state’s top agents. If you have any questions about real estate, then I am here to help!
Let’s start with Single Families. Check out all the Quincy Homes For Sale!
In July of 2023, we saw 3,603 Single Family homes sell for an average sales price of $808 thousand dollars.
Let’s start with the sales comparison. In regards to sales, it’s pretty much more of the same. The July number of sales decreased by an amount of 21% from last year's 4,561 units sold in July of 2022. For the last 6 months, the average decrease in sales has been a decrease in sales of 22.7%.
I have said on more occasions then I can count that the difference in the number of sales should start to tighten up. I would have actually thought it would have started in the July data. I want to see what the sales data for August and September has before I pull back on this prediction.
Let’s talk about prices… Because that’s really what matters… And what people care about! If you are in the “market is going to tank” camp with housing prices crashing… Then July is not going to be a good month for you.
In July of 2023, home prices went up 5.10% year over year. This was actually the highest year over year appreciation rate that we have seen in 2023! With this 5.1% monthly year over year increase, then that means that home prices are now up 3.2% for the first 7 months of 2023.
This is some exciting news for Massachusetts homeowners. The real estate market continues to take some of the best punches that the economy can throw at it… And coming out looking pretty darn awesome.
July is just more of the same 2023 story… Sales are down and prices are up. Let’s dive into the numbers a little deeper…
So 3,603 Single Family Homes sold.. Again, it’s not the prettiest number… But it is the exact amount of sales that happened in July 2011! That is a first! But again, it’s more of the same with this year's sales levels being the equivalent to 2011.
This now makes for 25 consecutive months of year over year sales declines. Talk about an ugly chart! But this kind of shows why the sales levels decreasing doesn’t really matter… Because sales levels were going down starting in 2021 as well as 2022… And home prices went up… A lot!
As we have talked about before… The decrease in sales levels is not a number to be scared of. As long as sales and inventory levels work in tandem… Then home prices are going to be just fine.
Which brings us to the Single Family inventory levels.
Just another month of an inventory graph that looks the same as all the other graphs…
It’s another month of record low inventory. It’s another month where I have to say that Inventory levels have never been this low in July. Ever.
And a little more of the same is that with sales levels being at 2011 levels, then this means that inventory levels are 7 times below the amount of inventory that was on the market in July of 2011. At that time we had 25,181 Single Family homes on the market. Talk about an amazing time to be a buyer!
Provided this inventory imbalance continues, then home prices will continue to go up at sustainable levels. The 3% increase in home prices is a sustainable marketplace that is good for both buyers as well as sellers.
And when it comes to inventory… The trend continues. The inventory gap between levels this year compared to 2022 and 2021 continue to widen… And it’s starting to be by a considerable amount. In the beginning of August, there were 1,855 fewer homes on the market compared to inventory levels at the same time in 2022. That is a 34% decrease in just one year! And it’s a 20.6% decrease when compared to the levels in 2021… Which was previously the all time inventory low.
Our inventory peak is 4,012 units which was hit for just one week this year. Inventory has pulled back from this high with there being about 3,600 homes on the market in the beginning of August. It’s going to be interesting to see if inventory levels cross that 4 thousand mark again. It’s not looking like it’s going to be a favorable market for buyers on the inventory side come this Fall.
So sales were off by 21% while inventory levels were down by nearly 33% compared to last year and off by 20% from previous record low in 2021.
Demand continues to outstrip supply. But as we have talked about before… Supply is being limited for the exact same reason as demand… Interest rates! These market dynamics are not changing anytime soon. Housing prices aren’t going to go down anytime soon.
People are constantly fixated with the demand side of the curve. Yes, sales are down to 2011 levels… But that is only half the story. If you ever hear anyone talking about the health of the market and they only talk about sales levels without mentioning inventory levels… Then go invest your very valuable time somewhere else… Because they have no idea what they are talking about or are just trying to push a narrative.
As long as inventory levels stay this low, then there will be no housing price corrections. But be on the lookout for pockets where you see inventory go up… A lot. And very fast. This could be the story that we see on the Cape. I actually did a video on the Cape Cod Rental Crash which could result in a surge of inventory and falling prices. If the Cape interests you, then you should definitely take a look!
How about that pricing trend that we have talked so much about? What did the month of July have to say about that?
Well look at that… Another month of sales data following the trend that we see year in and year out. I asked last month if anyone wanted to take any bets where it was headed… Should we take some bets again?
Because the average price for a Single Family home is going down… For the rest of the year that is. In a couple months, get ready to hear all the fanatics out there screaming from the rooftop about how prices are down from their peak… But you are too smart to listen to those jokers that call themselves an expert… Because you know that the pullback in pricing is all part of a yearly trend.
So, onto the Condo market and then the Multi-Family market… But first, if you are liking hearing about the MA real estate market, then please consider subscribing… And can you do me a huge favor? Can you please hit that like button? It helps the YouTube algorithm which then pushes the video out to more people… And it just makes a huge difference for me.
For the month of July, we saw 1,607 condos close in Massachusetts for an average sales price of (add emphasis) $777k thousand dollars. THIS was a BIG number. A big big number. But we will get to that. Check out all the South End Condos For Sale
The sales for the condo market continued to follow the trendlines that we are used to seeing. Sales this month dipped from their seasonal high in June. In July we saw a HUGE plunge in sales… But the year over year decrease in sales has been getting better. In April, sales levels were off by 32% compared to April of 2022. In May they were down 21% while in June they were down 18%. And now in July, they were down by 15% when compared to July of 2022.
When we look at the comparison for July sales data in the condo world for the last dozen or so years… The 1,607 units wasn’t terrible. It handedly beats out July 2011, but falls a little short of the sales levels in 2012 when 1,773 units sold.
I am not disappointed with these sales levels. I also think the condo market would be less impacted by the handcuffing of people being locked into a lower rate. If you are those newly weds living in a one or two bedroom Boston Condo with your first kid on the way… Well then that condo is going to get small very quickly. Maybe you can hold out for a little longer, but most likely the suburbs will start screaming your name.
And here is more of the same… Inventory is a record low for the condo market as well. Inventory is currently 22.5% below the levels of available condos in July of 2022. While our sales levels are between 2011 and 2012 levels, inventory is currently 4 times lower than at that time!
So sales were down 15% while inventory was down 22.5%. In other words the market got worse for buyers.
Remember last month’s analysis when we talked about how the condo market year over year was down by .42%? Well July’s numbers made up for that! This month was a whopper of a month.
The average sales price of nearly $778 thousand dollars represents a 20.8% year over year increase in the average sales price. You heard that right, 20.8%!
Last month I said that I wasn’t ready to throw up a caution flag.. And this month makes me feel pretty darn good about not throwing up that caution flag. Year to date, prices for the condo market have increased in the state of Massachusetts by 5.4%. The appreciation rate for Massachusetts was 2.5% for the first 6 months… So in one month, the average appreciation rate in Massachusetts for Condos has more than doubled. July was a great month!
The Single Family market follows a trend beautifully. The condo market basically pokes a stick in the trends eye. This is the second month in a row that the condo market has given the single finger salute to the historical trend. What is going on here?!?
Check this graph out…
We will start with looking at the last three years. When you see it this way, it’s just crazy what July meant for the condo market. But let's take a look at a longer analysis and see if prices going up in July has ever happened again.
When looking at the graph, it is hard to see… But prices have actually gone up twice since 2017 for the month of July. They went up in 2018 and 2020, but the amount was much less… A measly $262 in 2018, but a much more respectable $21,573 in 2020!
So it’s happened before… But it's rare. And it’s never happened at this extreme before. Next month is going to be interesting. I have to imagine that home prices are going to go down next month. So the question becomes by how much?
And now for my very quick shameless plug. If you are thinking about buying or selling a home, then reach out to me today as I would be honored to help guide you through the process.
Now onto the Multi-Family market…
Last month it was the Multi-Family market that razzled and dazzled… As we talked about, the condo market took that glory. But the Multi market stepped up with a very respectable month.
In July of 2023 we saw 425 Multi-Family units sell for an average sales price of $790,000.
The 425 units sold is 29.9% below the activity that we saw in July of 2022. That is a marginal step back from last month's 28.2% yea r over year decrease, but is possibly showing some leveling out of the multi-family market.
The 425 units is nearly equivalent to the sales levels that we saw in July of 2011 when 449 Multi-Family homes sold.
We won’t call two months of data as the normalized market, but if next month is that way… Then I think we might be onto something.
Let’s take a deeper look at the inventory levels first, then let's jump into prices.
We currently have 673 multi-family properties on the market. This 673 units is up from last month when we had 612 properties on the market. This makes the inventory levels in July of this year an all time low year over year.
While sales levels are at the 2011 levels, inventory is 4.4 times below the inventory levels that we saw in July of 2011.
Meanwhile inventory levels are down by nearly 46% when compared to July of 2022.
In looking at the data and the trend, I kind of feel like the sales levels and prices of June stole a little bit of the thunder from July. June was such a good month and such a big outlier that it makes me think that this is why July was a little off. In other words, I am not worried about this month’s data.
But check this out.
For the month of July, the year over year sales data shows that prices jumped by 3.7%.
As we talked about last month, the June data was so good that it took prices for the year down by 2.4% in the first five months to up .3% in the first six months. With the July data, the average sales price for Multi-Families is up by .89%.
It looks like the Multi-Family market built on the gains from last month. The next five months are going to be interesting!
Want to talk about your personal real estate needs?
My info is in the description below. I always love to talk real estate.
Whether you are looking to buy in the next 9 or 90 days, then I would love to chat with you and find out about your real estate goals.
And if you are thinking about possibly selling, then we can help you traditionally or even offer you a cash offer on your house for a seamless and stress free sales price. No matter what your situation, we can help you get it done.
You can also visit YouTubeRealEstateAgent.com and fill in your info then I will reach out to you!
Questions or comments about the market data? Want to see all Boston Homes For Sale?
Drop me a line in the comments section below. You take the time to watch the video, so I will always take the time to answer.
So until next time.