Last week we shared that an ongoing issue across the nation is a shortage of homes for sale. Has that changed? What’s going on this week? Read on!
TL;DR: Housing inventory is slowly increasing but is still below last year’s levels. Prices are NOT falling in the Boston and Bay Area markets, and houses are selling faster than they have in the past. In short: Get pre-approved, and don’t wait on the house you love!
Housing inventory is increasing
Last week we shared that inventory was low across the nation, but especially in the Boston area and San Francisco Bay Area. For the month of May, the national new listings decline was 19.9% year over year. In April, the drop in new listings nationally was closer to 44% year over year.
According to May 2020 housing data released by Realtor.com, the U.S. housing market probably reached its lowest point inventory-wise in mid-April. The biggest declines in inventory were in Philadelphia, New Jersey, Providence, and Baltimore. The May decline in inventory for Boston year over year was 32%, while the Bay Area saw a 24% year over year decrease in inventory.
This week, we have seen a slight increase (~5% week over week) in the number of properties for sale in Massachusetts.
Last week’s inventory count (single family and condos): 10,600
This week’s inventory count (single family and condos): 11,129
Why is this important? The number of properties on the market help dictate the prices. When there are fewer than 10 properties to choose from, for example, the pool of buyers is bidding on those properties, which means multiple offers and a possible bidding war. So – YAY for more inventory!
Properties are spending short periods of time on the market in Boston & Bay Area
Properties under agreement in the last week: 2,024 (vs. 1,701 the week prior)
Properties marked “contingent” in the last week: 2,594 (vs. 2,444 the week prior)
Why does this matter? Because inventory is slightly higher but still selling fast, which tells us that there are still a lot of buyers out there looking for a house. For example, in Jamaica Plain last week, the average days to offer (from the first day the property was listed) was 15. If you look to the northern suburbs like Melrose and Malden, the average days to offer is 12, skewed by one property, with the median being just 5 days.
Nationally, houses are selling more slowly than last year, with the national average of days on market for May at 71 days (15 days fewer than last year in May).
Will we see a downturn in the market?
If we had a crystal ball, we would guess that prices will actually RISE this summer.
Why? As a sense of normalcy returns and people return to their daily routines, they will be more confident in the housing market. For the month of May, prices in both the Boston area and San Francisco Bay Area were up about 5% month over month.
If you’re looking for more information related to a specific price range or town, don’t hesitate to reach out – that’s why we’re here!