Low Supply Drives Bay State Sales Down Further

For four out of the last five months, single-family home sales have decreased in the Bay State. This, however, is seen by some as a simple problem in availability.

Timothy J. Warren Jr., CEO of the Warren Group, said, “The low inventory of single-family homes in the market is the primary cause of the decreasing sales activity. Motivated buyers, however, are eagerly bidding for the limited supply which accounts for the increasing sales prices. People want to buy homes before prices and interest rates rise further.”

According to the Warren Group, statewide sales dropped 7.8 percent to 2,749 in March, down from 2,980 from the previous year. Home sales in the first quarter were down overall 2.4 percent to 7,557 from 7,745 in last year's first quarter.

To back up Warren’s statement, the median price for single-family homes sold in March rose 8.6 percent to $315,000 from $290,000 a year earlier. It was the 18th consecutive month that home prices have increased year-over-year. The first-quarter median selling price was $305,000, a 7 percent increase from $285,000 in the first quarter of 2013.

Warren also sees condos as another option on the rise, saying, “As we see from the sales numbers, condos continue to be an attractive option for first-time home buyers or empty nesters. With a tight apartment market and rising rents, condominiums are hot right now.”

The median price for condos sold in March was $291,500, up more than 10.4 percent from $264,000 in March the previous year. The first-quarter median condo price was also up more than 15.7 percent to $290,000 from $250,500 during the prior year's first quarter.

In related news, purchase and non-purchase loans were down in March from the previous year.