Massachusetts housing market: Everything you need to know
Massachusetts offers many compelling reasons to make it your home, from the history and charm of Beantown (otherwise known as Boston) to the top-notch schools and universities throughout the state. Not to mention some of the nation’s leading medical institutions and a plentiful job market. It’s no wonder the state’s population increased every year from 2010 to 2020.
But the Bay State’s pricey cost of living, including steep home prices, can be daunting. In Boston in particular, the median home price as of May 2023 was about $800,000, according to Redfin data — that’s double the nationwide median. If you’re considering buying or selling a home here, learn more about the Massachusetts housing market before making any big decisions.
Massachusetts housing market overview
The Massachusetts market is a bit of a mixed bag at the moment. Like many other parts of the country, steep mortgage interest rates appear to be cooling things down, at least by some measures. May 2023 data from the Massachusetts Association of Realtors (MAR), for instance, shows home sales and inventory are both lower than the same month last year. In fact, May of this year had the lowest number of single-family homes and condos for sale of any May in MAR’s reporting history.
On the other hand, housing prices are not taking a nosedive. They remained steady year-over-year, with the statewide median actually showing a slight increase for both single-family homes and condos. But remember, all real estate is local — meaning the exact market conditions will vary from city to city.
Massachusetts housing trends and stats
- The median sale price for single-family homes statewide in May 2023 was $616,450, according to MAR data.
- That’s a very slight uptick from $615,000 one year ago, and it’s well above the nationwide median home price of $396,100.
- Just 3,319 homes sold this May, down from 4,270 one year earlier.
- Data from Redfin shows that in May, the typical Massachusetts home spent 18 days on the market, which is only one day longer than one year ago.
- May’s sale-to-list ratio was 102.8 percent, per Redfin, meaning most homes that sold went for about 2.8 percent over list price.
- Closing costs in Massachusetts amount to about 1.3 percent of the purchase price, according to figures from CoreLogic’s ClosingCorp. On a median-priced $616,450 home, that’s around $8,000.
Should you buy or sell in the Massachusetts housing market?
If you’re a home seller
Even though the housing market is cooling somewhat, it’s not all bad news for Massachusetts sellers. The shortage of available inventory means it’s a seller’s market. The number of homes on the market in May was the lowest it’s been since MAR began collecting data back in 2004. This means more competition for the few homes that are available.
In addition, according to MAR data, median sale prices increased in all four regions of the state in April, ranging from an uptick of 0.8 percent in the southeast to a high of 5.3 percent in the west.
Still, it’s important to remember that many would-be buyers are staying on the sidelines at the moment thanks to high mortgage rates. Amid this backdrop, sellers must be careful how they price their homes. Make sure you have a solid idea of what your house is worth in today’s market before you list it for sale.
If you’re a home buyer
With inventory low and both prices and mortgage rates high, being a Massachusetts homebuyer can be challenging. There’s at least one factor working in buyer’s favor, however: 21.3 percent of sellers had to drop their prices to close a deal in May, per Redfin. So if you find a home you like, you have some bargaining power.
One way to strengthen your position as a buyer is to get preapproved for a mortgage. This helps provide a clear picture of what your shopping budget will be, and it also shows sellers that your offer should be taken seriously.
Another is to look into homebuyer assistance programs that can help you cover closing costs and a down payment. There are many Massachusetts programs that can help, especially if you’re a first-time buyer.
As you figure out your home purchase budget, be sure to consider the local cost of living. Anywhere in the Bay State, but especially in the Boston area, daily necessities are not likely to be cheap. Bankrate’s cost of living calculator can help you nail down what you can expect to spend.
Massachusetts housing market predictions
With talk of a potential recession looming large all over the United States, there’s plenty of speculation about whether the housing market will crash, in Massachusetts and elsewhere. Happily, according to experts, a housing crash does not appear to be in the cards.
While the market may indeed continue to slow and experience a course correction, a crash is unlikely in an environment where inventory is especially scarce. Housing market predictions for 2023 suggest that prices may fall, but not to the significant degree they did during the Great Recession.
Find a Massachusetts real estate agent
Navigating the Massachusetts real estate market can be far less stressful with the help of a local pro. If you’re selling, a real estate agent can help you price your home appropriately amid the current market conditions. And if you’re buying, the insights of a knowledgeable local agent can be invaluable, especially when there’s so much competition.
If you need help finding an agent, ask friends, family and coworkers for recommendations. If they’ve had a good experience with a particular Realtor, chances are you will too. Interview at least two or three candidates before signing a contract, though. It’s important to find someone who you can communicate with easily and who understands your goals.
FAQs
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Technically, yes. Home prices are high here, and inventory is extremely scarce, which gives sellers the edge. However, as is the case all over the country, high mortgage rates are keeping many would-be buyers on the sidelines at the moment.
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No — they are actually rising, but only slightly. As of May 2023, median home prices in Massachusetts are up 1.8 percent since May of last year, according to Redfin data.
