The Massachusetts housing market is on a wild ride.
Four years post-pandemic, we’re far from normal, with record-high prices and low inventory reshaping the landscape for buyers and sellers alike.
Navigating this market is challenging, but knowledge is power.
We’ll break down the numbers, trends, and strategies you need to thrive in today’s real estate scene, from Boston’s bustling streets to Springfield’s up-and-coming neighborhoods.
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Key Notes
- The average home price has increased by 6.9% to a record $679,100.
- There is still a housing shortage in MA but supply has increased by 12.8% – indicating a possible stabilization to the market in the near future.
- High interest rates and foreclosure activity negatively affect the market, but increased employment across the state is positive.
- The market is predicted to move towards a more balanced version by 2025 as interest rates are forecast to drop, inventory to continue rising, and prices to remain high.
The Real Estate Market in Massachusetts - Right Now
After the first half of the year, the current property market can be summed up in one word – unprecedented.
Historical market trends for post-covid years were already characterized by low supply, low number of sales and high costs, but real estate prices in Massachusetts have reached a different level altogether.
So what are the numbers?
The average home price in Massachusetts was $679,100 in June – 6.9% higher than the previous year. This is an all-time high, with each month in 2024 setting a new record as we go along.
Is There (Still) a Housing Shortage in Massachusetts?
Yes.
Housing prices in Massachusetts remain high due to persistent scarcity. While inventory across the state increased by 12.8% over the past year, it still sits at only 2 months’ supply—notably low compared to a balanced market’s 6 months.
For sellers, high prices and low inventory may seem promising—your house is the equivalent of a golden ticket. However, listing and selling at a high price is easier said than done.
The proof is in the pudding: Redfin reports that the average number of homes sold in Massachusetts was down by 9.93% compared to last year.
The Massachusetts housing market is conclusively a seller’s market, dominated by:
- Low supply
- High selling prices
- Potential difficulties finding buyers for high-value properties in challenging economic times
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Economic Factors Influencing the Market
The flow of money in an area, or lack thereof, directly equates to more or less property transactions. So the state of the economy at any given time has the biggest impact on the housing market at that time.
In 2024, the Massachusetts economic landscape looks like this:
- Mortgage rates: 30-year fixed rates hover around 7%, unlikely to drop below 6% soon.
- Foreclosures: Up 46% in the first half of 2024, reflecting financial strain and declining home sales.
- Employment: Net gain of 40,200 jobs from June 2023 to June 2024, indicating a turn for the better in the near future where residents’ finances are concerned.
Local Housing Market Insights
Massachusetts offers a diverse real estate market, with each region presenting unique attractions and challenges for both buyers and sellers.
Four areas, in particular, have become notable for their appeal in the housing industry:
Barnstable Town
In the scenic Cape Cod area, Barnstable Town combines historical charm with coastal tranquility. It attracts buyers seeking vacation homes, retirement properties, or permanent residences.
The town’s appeal includes maritime activities, a lively arts community, and conservation efforts, offering a peaceful yet vibrant environment.
Boston
Boston is a standout in the Massachusetts real estate market, known for its historical significance and modern vitality. Its rich academic and cultural landscape, combined with economic strength, sustains high housing demand.
Boston’s neighborhoods offer diverse options, from luxury apartments to classic brownstones. The city’s community life, parks, and waterfront areas keep it attractive for homeowners and investors.
Worcester
Massachusetts’ second-largest city, Worcester, has evolved into a hub of culture, education, and innovation. The real estate market benefits from educational institutions, a robust healthcare industry, and a revitalized downtown.
With a mix of historic and modern living spaces, Worcester’s cultural and recreational amenities make it a desirable urban-suburban destination.
Springfield
Dubbed the “City of Firsts” for its innovative spirit, Springfield has transformed its housing market. Its affordability and significant investments in infrastructure make it appealing for residential and commercial ventures.
Its strategic location offers excellent connectivity to major Northeastern cities, supported by a growing economy in healthcare, education, and manufacturing – fueling strong housing demand.
Massachusetts Home Prices By Town
As mentioned before, selling prices across Massachusetts have consistently skyrocketed recently, but which areas in particular?
| Town | County | Increase in Average Selling Price (June 2023 - June 2024) |
|---|---|---|
| Harwich | Barnstable Town | 80.1% |
| Hopkinton | Middlesex / Boston | 50.5% |
| Marblehead | Essex | 44.3% |
| Newburyport | Essex / Boston | 41.3% |
| Leominster | Worcester | 31.7% |
| Sandwich | Barnstable Town | 30.4% |
| Fall River | Bristol | 27.5% |
| Franklin | Norfolk | 27.3% |
Source: Redfin
Massachusetts Housing Market Predictions
Price Trends
Real estate prices in Massachusetts show no indication of slowing down, and a further (albeit minor) increase in average selling prices is expected for the rest of 2024.
Forecasts suggest that the increase will not be as substantial as in recent years—due to the slight improvement in housing supply creating more competition on the market—but nevertheless, the MA market is on the road to reaching a $700,000 median selling price.
Inventory Levels
Housing supply may have increased by over 12% in the past year, but the Massachusetts housing industry must acknowledge that inventory is a long game.
There is still some way to go before the market even comes close to a balanced housing supply of 6 months—it is currently stuck at 2 months’ supply, with no indication of breaking 3 by the end of the year.
Inventory will increase when homeowners feel more financially comfortable in selling their homes and moving on and up. This will only take place if 30-year mortgage rates finally begin to drop – which the Federal Reserve plans to decrease by 2% by 2025.
Buyer Demographics
Millennials are starting to flex their muscles in the market, and their preferences are making a big impact on real estate trends, especially in states like Massachusetts, where there are growing numbers of job opportunities.
This generation of buyer – some of whom are entering a financially stable phase of their lives and looking to purchase property – is definitely steering the direction of demand and shaping what we can expect, particularly in urban real estate.
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Impact of Technology
Some of the most notable technological impacts on the housing market are:
Virtual Tours
Virtual tours are revolutionizing the housing market by offering potential buyers an immersive way to explore properties from anywhere. This technology allows for detailed, 360-degree views of homes, making it easier for people to narrow down their choices without the need for multiple in-person visits.
Virtual tours make the buying process more efficient and accessible, attracting a broader audience and speeding up decision-making. Real estate agents also benefit, as they can showcase properties to a larger, more diverse clientele, ultimately driving quicker sales.
AI Enhanced Operations
Artificial Intelligence is being used, particularly by iBuyers, to make data-driven decisions and predict property values, while tech-savvy sellers use AI through chatbots and virtual assistants to streamline their website experience.
Buyers or sellers can also use AI to do smart property searches and some models are now even capable of offering you property management assistance.
Modern Tech Enabling Secure Transactions
The use of blockchain technology is now seen more frequently in ordinary property transactions, such as home sales, in order to reduce fraud and ensure secure and transparent payments.
Smart contracts are also being implemented across the board, automating and regulating various aspects of real estate transactions.
Tokenization is another advancement aimed at boosting data security. It involves using a non-sensitive placeholder as a token for processing and storage during a transaction, while the original data source—such as credit card numbers or personal identities—is stored securely, preventing leaks, misuse, or unauthorized access in the future.
Frequently Asked Questions
Is the Housing Market Slowing Down in Massachusetts?
While continued increases in selling prices and decreases in number of sales over the past year are concerning statistics, the 12.8% increase in housing supply is the most crucial factor, as it will eventually have the effect of balancing out the market more fairly, making houses more affordable and causing sales to increase.
However, if inventory begins to decrease again, the housing market will do more than slow down, and it will be headed for a crash. High prices, low sales and low supply are unsustainable.
How Much is a House in Massachusetts in 2024?
Prices vary by location, but median selling prices are:
- All Home Types: $679,100
- Single Family Homes: $703,100
- Townhouses: $590,400
- Condos: $610,500
Mainstream urban areas like Boston have an average selling price of over $800,00 while up-and-coming areas like Springfield have an average selling price of just $300,00.
Conclusion
The Massachusetts housing market in 2024 presents a complex landscape of challenges and opportunities.
With record-high prices and low inventory, sellers hold a strong position but may face difficulties finding buyers in challenging economic times. Buyers confront high prices, steep interest rates, and limited options. However, increasing inventory and job growth offer hope for a more balanced market in the future.
As the market evolves, staying informed on trends and economic developments is crucial for both buyers and sellers. Whether you’re looking to navigate this dynamic market or need to sell your home quickly, we’re here to help. Contact us today for a no-obligation cash offer on your home and experience a hassle-free selling process in these uncertain times.