Greater Boston Home Sales Plummet in September 2024
FAQs About 2024 Changes to Buying a Home | Massachusetts Housing Affordability Improves in September | News Nuggets
The number of homes sold in Greater Boston plunged in September compared to August, the Greater Boston Association of Realtors (GBAR) reported on October 22, 2024.
Home buyers purchased 744 single-family homes in September in the 64 cities and towns that comprise GBAR's jurisdiction, a 30 percent month-over-month drop from 1,063 sales in August. Sales declined slightly more than 1 percent compared to September 2023.
Through September, 7,629 single-family homes sold, a nearly 3 percent increase compared to the first nine months of 2023 when 7,430 transactions closed.
Condominium sales were also weak, falling 24 percent in September compared to August, a decline of almost 200 units. Home buyers purchased 630 condos in September compared to 829 in August. Sales were down nearly 11 percent compared to September 2023's 705 units closed.
Through the first three quarters of 2024, condo sales dipped 4 percent to 6,638 sales from 6,921 during the same nine-month period in 2023.
While home sales through September have remained steady compared to the first nine months last year, the month-over-month decline was dramatic.
There were 157 multi-family homes – defined as two-to-five-family homes – sold in September, a 4 percent decrease from 163 properties sold in September 2023.
Sales Declines Haven't Impacted Home Prices
Home prices have remained firm despite the dramatic month-over-month decline in single-family and condominium sales, rising year over year during the first nine months of 2024.
The September median price of a single-family home in Greater Boston was $850,000, down more than 7 percent from August ($917,500) and flat from September 2023 ($849,500).
Despite the weakness in September, the median house price is $906,000 through September, up 6 percent from $853,063 during the first three quarters of 2023.
GBAR divides its 64 municipalities into regions. Its "Central Middlesex Region," which includes Acton, Bedford, Boxborough, Concord, Hudson, Lexington, Lincoln, Maynard, Stow, Sudbury, Wayland, and Weston, had the highest median sales price for a single-family home at $1,050,000. Â
The median condo price was $673,500 in September, a nearly 2 percent decrease from $685,000 in September 2023 and a 4 percent decrease from August ($703,000).
Condominium prices barely maintained their yearly gain, up only 2 percent during the first nine months to $720,000 compared to the same period in 2023 ($705,000).
GBAR's "Metro Boston Region," which includes Arlington, Belmont, Boston, Brookline, Cambridge, Chelsea, Dedham, Everett, Milton, Newton, Revere, Somerville, Waltham, Watertown, and Winthrop, had the highest median condo price, at $735,250.  Â
Falling Sales Lead to Rising Inventory
Greater Boston home buyers had many more homes to choose from in September compared to August and September 2023.
At the end of September, the supply reached 1,759 houses, 40 percent more than the 1,255 available at the end of August. Compared to September 2023, single-family inventory was up 23 percent.
In September, 2,290 condominiums were on the market, more than 23 percent more than in September 2023. Compared to August, condo inventory rose about 36 percent.
FAQs About 2024 Changes to Buying a Home
Since August 17, 2024, the real estate landscape has undergone significant transformations affecting home buyers buying their first home or next home.
From what the National Association of Realtors (NAR) calls "practice changes" around buyer agency agreements to a renewed focus on transparency in commissions, the changes, in theory, empower home buyers with more clarity and control during their home-buying journey. Whether navigating the real estate market for the first time or returning for a new purchase, understanding these developments can help you make informed decisions about working with a real estate professional. Â
What is a Buyer Agency Agreement?
A buyer agency agreement is a legally binding contract between a homebuyer and a real estate buyer agent. The agreement outlines the agent's responsibilities, the services they will provide, and their compensation. A properly drafted buyer agency agreement should provide clarity and transparency, ensuring both parties understand the terms of their relationship. It also will give you a stronger sense of control over your relationship with your agent and the home-buying process.
Why are Buyer Agency Agreements Now Required?
Recent real estate industry changes from a settlement between the NAR and class-action plaintiff attorneys have mandated written buyer agency agreements. While no law in Massachusetts requires such contracts, most real estate professionals currently comply to avoid legal liability. Â
When Do I Need to Sign a Buyer Agency Agreement?
In most cases, you'll need to sign a buyer agency agreement before you begin touring homes with your agent, whether in person or virtually. You don't need to sign a contract if you're simply attending an open house or asking general questions about an agent's services.
What are the Key Elements of a Buyer Agency Agreement?
The critical elements of a buyer agency agreement include the buyer agent's responsibilities, the specific services they'll provide, the duration of their representation, and the terms of their compensation. The agreement must clearly state how you will pay the agent, e.g., a flat fee, a percentage of the sale, or an hourly rate. Compensation cannot be open-ended or a range.
Are Buyer Agency Agreements negotiable?
Buyer agency agreements are negotiable between you and any real estate buyer agent you wish to engage. That's not new. You can discuss modifying various aspects of the agreement with your buyer agent to suit your needs, including the specific services you require, the length of the contract, and compensation. What is new? The agreement must have language emphasizing that real estate commissions are negotiable and not fixed by law.
Do I Have to Pay My Real Estate Buyer Agent Out of Pocket?
While the buyer agency agreement outlines your responsibility for paying your buyer agent, you can negotiate with the seller to pay your agent's commission. Your Contract to Purchase Real Estate – often called an offer – usually will include terms that require the seller to pay your agent. You also can ask the seller for a buyer credit or seller concession, reducing your out-of-pocket expenses and freeing up cash. In many situations, sellers are willing to cover the buyer agent's commission. After all, what matters to a seller is the net price they'll receive for their home and other reasonable terms.
How Will I Know If the Seller Will Pay My Agent's Commission?
The answer to this question is tricky. There were settlements in more than one federal court case. Most real estate brokerages and multiple listing services (MLS) presently follow the practice changes expressed in the NAR settlement. The multiple listing service in Greater Boston is MLS Property Information Network, Inc. (MLS PIN), which settled a different federal case. While MLS Property Information Network, Inc. allows brokerages to display a cooperating commission, most brokerages will not make an offer to pay the buyer agent commission on an MLS listing. These brokerages have agreed to the terms of the NAR settlement and must communicate the offer of a buyer agent commission off the MLS if the seller chooses to do so. It sounds complicated. It's not. There may be more work and less efficiency, but a competent buyer agent will navigate the process and provide you with the information you need to know.  Â
Can I Change or Exit a Buyer Agency Agreement?
Yes, you and your agent can mutually agree to modify the agreement at any point. Many agreements include clauses that outline conditions for exiting the contract. It's crucial to carefully review these conditions with your agent before signing the agreement. Consider requesting an agreement that allows cancellation with written notice.
Massachusetts Housing Affordability Improves in September
Buying a home is still extremely expensive in Massachusetts, but affordability did improve in September.
The Massachusetts Association of Realtors (MAR) has a housing affordability index. The index measures affordability across the state.
For example, an index of 105 means the median household income is 105 percent of what is necessary to qualify for the median-priced home under prevailing interest rates. A higher number represents greater affordability.
Unfortunately, the index is not anywhere near 105. The index improved to 52 in September, up from 48 in August, 45 in July, and 43 in June.
Declining mortgage interest rates played a role in improved affordability, but recent rate increases (see below) may turn affordability in the other direction in October.Â
News Nuggets
Mortgage Applications Decline: Mortgage applications for purchasing a home declined 5 percent for the week ending October 18, 2024, while refinance applications dropped 8 percent, the Mortgage Bankers Association reported on October 23, 2024. The dip shouldn't surprise anyone, given mortgage interest rates are about 1 percent higher than just five or six weeks ago. Massachusetts home buyers were locking in 30-year, fixed-rate mortgages at around 5.875 percent. Despite the recent bad news on rates, today's interest rates are about 1.25 percent lower than a year ago. Â
Safest Cities: WalletHub, a personal finance company, looked at 182 American cities across 41 "safety" indicators, including hate crime, assaults, traffic fatalities, natural disaster risk, and uninsured population. Warwick, RI, ranked third, and Nashua, NH, finished 15th. Boston placed 33rd, and Worcester finished 45th. Manchester, NH, ranked 60th, and Providence finished 64th. Warwick had the second-fewest assaults per capita, with Nashua ranking fourth fewest. Regarding the lowest percentage of uninsured residents, Boston placed fourth, and Worcester tied for fifth.