Massachusetts is far from alone with its exploding home prices. S&P Dow Jones Indices reported Tuesday morning that its U.S national home price index gained 16.6 percent in May, following a 14.8 percent gain in April.
"A month ago, I described April's performance as 'truly extraordinary,' and this month I find myself running out of superlatives," Craig Lazzara, managing director at S&P DJI, said. "The 16.6 percent gain is the highest reading in more than 30 years of S&P CoreLogic Case-Shiller data. As was the case last month, five cities — Charlotte, Cleveland, Dallas, Denver, and Seattle — joined the National Composite in recording their all-time highest 12-month gains."
The latest data, Lazzara said, is "consistent with the hypothesis" that the housing market is being driven in part by buyers moving from urban apartments to suburban homes as part of a collective reaction to the COVID-19 pandemic. "This demand surge may simply represent an acceleration of purchases that would have occurred anyway over the next several years," he said. "Alternatively, there may have been a secular change in locational preferences, leading to a permanent shift in the demand curve for housing. More time and data will be required to analyze this question."
Locally, the Warren Group reported last week that the median single-family home sale price in Massachusetts set a new record for June, at $555,000. The June median home sale price was up from $440,000 in June 2020 and $429,000 in June 2019. The surging prices did not keep buyers away. There were 6,959 single-family home sales in Massachusetts in June, the Warren Group said, compared to 5,038 in June 2020 and 6,530 in June 2019.
"June's closed sales show just how extraordinary 2021 is turning out to be," said Warren Group CEO Tim Warren. "High buyer demand, record low interest rates, and dwindling inventory won't be changing any time soon, and median sale prices will likely continue to break records this summer and fall."
Year-to-date median home sale prices remain below $300,000 in three counties: Berkshire ($265,000), Franklin ($257,000), and Hampden ($249,000).