Home sales in Massachusetts were up only slightly in 2021, compared with 2020, as the median home sale price raced past $500,000 for the first time.
The Warren Group on Tuesday morning released data pegging the median home sale price last year at $510,000, an increase of more than 14 percent from 2020. Sales in 2021 were up 0.8 percent over 2020.
"Last year was a wild ride for Massachusetts real estate, and not necessarily one I would want to be on if I were in the market for a new home," said Tim Warren, CEO of The Warren Group. He said demand for homes was high because of low unemployment, a "booming" economy, and the trend of remote work and "evaporating" commutes.
He added: "The year-end median sale price of $510,000 is a strong indicator that the lack of inventory is increasing competition, pushing prices up and stretching buyers' budgets thin. Higher mortgage interest rates may moderate the increases in home prices, but they will keep monthly mortgage payments sky-high. Demand remains high as buyers eagerly await the spring market for a wave of new homes coming to market. But many current homeowners are opting to stay put, which is compounding the inventory issue."
For December, home sales were down 13.4 percent compared with December 2020, but up 12.1 percent compared with the pre-coronavirus pandemic sales volume of December 2019. December's median sale price of an even $500,000 was up more than 9 percent from the December 2020 median of $457,500 and 25 percent above the December 2019 median of $398,750.
Condo sales shot up 17.7 percent in 2021, compared with 2020. The 2021 median condo sale price was $454,000, a 9.4 percent increase from 2020.
"The median full-year sale price of $454,000 marked an all-time high for condos, and as inventory in the single-family market continues to dwindle, this could yield even more competition in the condo market in 2022 as buyers look at condos as an alternative for single-family homes," Warren said.
For December, condo sales were down 15 percent from December 2020 but up 3.1 percent compared with December 2019. The median condo sale price in December was $438,500, up 15.5 percent over December 2019.
Warren speculated that the 2022 home sales market will be a "junior version" of 2021.
"Tight inventory and rising interest rates will keep the number of sales flat," he said. Median home sale prices "will continue to rise, probably a gain in single-digits" compared with 14 percent this year, he said.