The Greater Boston housing market may finally be hitting a ceiling.
The number of homes sold in the region fell in August for the first time in a year, according to figures from the Greater Boston Association of Realtors, while prices for single-family homes grew at their slowest clip in six months. Both are signs, real estate experts say, that buyers may be pressing pause.
“It feels like we’ve been in a nonstop sprint for much of the past year, but the market is now getting a chance to catch its breath,” said association president Dino Confalone, an agent at Gibson Sotheby’s International Realty in Cambridge. “There’s been a bit of softening in demand over the past 8-to-10 weeks as some buyers have opted to take a break from the market due to affordability issues or to pursue summertime activities.”
To be clear, the market is still brutal for buyers.
The median price for a single-family home in the 64 communities the association tracks hit $780,000, a record for August and 22 percent higher than August 2019, before the COVID-19 pandemic sent homebuyers into hyperdrive. Condominium prices also reached a record of $639,000, up 12 percent from two years ago.
Inventory, too, continues to scuff along at rock bottom, with so few single-family homes on the market that they would all sell in less than a month at the current pace. Real estate experts say a “normal” market has six months of inventory.
But the market for homes is showing its limits. Some renters who hoped to buy this summer have opted instead to wait until next year, renewing apartment leases instead, Confalone said. Other prospective buyers are backing away from the bidding wars that characterized last fall and this spring, as cooped-up buyers sprang for more space at seemingly any cost. That’s evidenced by the fact that prices barely budged from July to August.
“As the pool of buyers has shrunk over the past few months, so too has the competition,” Confalone said. “Many buyers are also choosing to be more cautious to avoid overextending themselves financially. As a result, we’re seeing fewer multiple offer situations and bidding wars, and that’s helping to slow the acceleration in home prices.”
Where this all goes is unclear, though it appears more homes are hitting the market in September. Active listings climbed 25 percent in the first two weeks of the month, the association said, while pending sales — units under contract but not yet closed — remain down. That could give buyers a bit more leverage as the fall market picks up speed.
If anything, Confalone said, it’s sellers who need to be careful, mindful that the furious run-up in prices since the pandemic hit may be losing steam.
“Today’s home buyers are well-versed on the market and not looking for a fixer-upper,” he said. “Most have seen dozens of properties and can easily recognize one that’s overpriced.”