9 min read Mar 12, 2024

Massachusetts Real Estate Market: Will it crash in 2023?

Massachusetts homes continued to sell at eye-popping prices last month. The median home sale price rose 6.9% year-over-year from $536,000 to $573,000 in January.

The number of homes sold on the market declined by 7.2% YoY from 3,694 to 3,427 homes, with only 2 months of supply. Does the scarcity of houses make Massachusetts a seller’s market? Let’s look at the facts.

Attleboro homes sold for a median sale price of $593,500 in January, up 144% year-over-year. Homes in Newton sold for a median sale price of $1,493,500, a 49.4% increase year-over-year. In fact, there were no markets in Massachusetts where prices declined year-over-year.

Interest rates are at record highs, with few home buyers. But the inventory is so low that 8.3% of homes sold above the list price!

  • If you are a home buyer: You can avoid bidding wars and avail seller concessions if you buy a home now. The 8.5% interest rate and mortgage payments are significant, but rates are unlikely to drop in the next few months. If they do, you can refi.
  • If you are a home seller: You can lock in Massachusetts’s high home prices. The scarcity of homes in NJ makes it a seller’s market. Homes listed on MLS sell faster and for 17.5% more than off-MLS homes. That could be thousands of dollars in additional proceeds if you sell via Houzeo.

The current Massachusetts real estate market statistics reflect the national trend of high demand and low supply. Despite the strong housing demand, home sales tanked. The property prices in Massachusetts have increased regardless.

So, How is the Real Estate Market in Massachusetts?

Sluggish! Home values in Massachusetts rose by 44.8% in the last 5 years.

But, home sales decreased by 7.2% in January 2024 YoY. Maybe due to the mortgage rate climbing to a two-decade high of nearly 8%! And the number of houses for sale in MA was 10,637 in the month, 3.8% less than in 2023. Massachusetts’s housing market is bearish.

The decrease in home sales can be attributed to not having enough properties in Bay State. The months of supply is 2 months, which makes MA a seller’s market. So, if you want to sell a Massachusetts property, now is the right time to list it on MLS.

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Massachusetts Real Estate Market Statistics

  • Average Home Prices: Massachusetts’s median home price is $573,000, up by 6.9% YoY. In 2024, the median sale price will keep increasing marginally due to MA’s tight inventory. The sale-to-list price ratio is at 99.9%.
  • Home Sales: As per January 2024 data, home sales decreased by 7.2% YoY! In January 2024, only 3,427 homes were sold, down from 3,694 in January 2023.
  • Average Rent Prices: Rental costs vary statewide. An average tenant in Bellingham pays $2,334, while the one living in Boston pays $3,926.
  • Median Days on Market: The median days on the market for homes for sale was 28 days, down 3 days YoY.
  • Pending Sales: The number of homes for sale declined by 3.8% YoY compared to 2023. Currently, there are 10,637 homes for sale in Massachusetts.
  • Months of Supply: The average month of supply is 2 months. MA’s demand can’t be satiated with the low supply. MA’s house scarcity is worse than the national housing market.

Massachusetts Housing Market Predictions 2024

Massachusettsans have survived the shockwaves of skyrocketing mortgage rates and rising home prices of 2023. Here’s what we predict for Massachusetts’s housing market:

  1. Home Sellers Will Return to the Market in 2024: Sellers who chose the sidelines in 2023 will come back. Especially those who can’t avoid new jobs or want to move to a cheap place. Whitney, the analyst who predicted the 2008 financial crisis accurately, has forecasted that baby boomers looking to downsize will also add up to 30 million housing units. Yowaza!
  2. Mortgage Interest Rates Will Stabilize by the 2nd Half of 2024: Mortgage rates hit 7.79% in October 2023, the highest level in 23 years. However, the rate dropped to 7.28% in January due to the softening labor market and slowing economy. Even the annual inflation rate went from 3.7% to 3.2%. We think the rates will remain above 6%, but they will stabilize in the second half.
  3. The Number of Home Buyers Will Rise: The historically high interest rates averted buyers in 2023. But mortgage demand rose after the interest rates lowered to 7.35% in November. The easing inflation and stabilizing rates will bring back house hunters.
  4. Home Prices Will Continue to Rise: Home prices rose steadily in the top metros across MA YoY, reaching $573K in January 2024. Experts predict home prices will continue to rise until the low supply-high demand dynamic changes.
  5. New Home Constructions Sales Will Increase: 12.3% of homes purchased in September were new homes, the highest since 2022. Home builders offered $30,000 worth of concessions to attract buyers in 2023. We think builders and sellers will compete for home shoppers in 2024.
  6. iBuyers Will Continue to Make Lowball Offers: iBuyers offered 104.1% of market value in 2021. They offered 86% in 2022 and around 70% in 2023. Opendoor and Offerpad have lost billions of dollars in 2023. As they struggle to survive, they will make lowball offers.
Bonus Prediction: Buyer Broker Commissions Will Be Negotiable!

In a shocking turn of events, the jury in Missouri awarded more than $5 billion in damages to the Sitzer-Burnett plaintiffs. This motivated nationwide home sellers to file grievances against NAR’s Cooperative Compensation Rule.

NAR’s Cooperative Compensation Rule or Participation Rule states that listing brokers must offer competitive compensation to buyer agents if they want to list properties on a NAR-affiliated MLS.

Sitzer/Burnett v. NAR

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Lawsuits like Moehrl, Gibson, Batton, Nosalek, and Batton 2 challenge the Participation Rule. They accuse NAR and other top real estate companies of colluding and conspiring to keep agent commissions high.

If the jury also finds the defendants guilty in these cases, buyer agent compensation may change. Buyer agents may become obsolete by 2025! Phew.

While buyer agents are unlikely to be obsolete in 2024, they may be open to negotiating commissions. That’s probably how they will still have some skin in the game.

When Will the Housing Market Crash in Massachusetts?

A housing market crash in Massachusetts is unlikely.

Massachusetts boasts a vibrant economy with the cost of living slightly above the national average. Despite this, its robust economy, driven by technology, healthcare, and education sectors, continues to attract businesses and individuals.

The median home prices have steadily increased in cities like Boston and Cambridge. For example, Boston’s median sale price increased by 25% YoY, reaching approximately $700,000 in 2024. On the other hand, more affordable options can be found in cities like Springfield, with a median sale price of around $230,000.

Massachusetts offers a diverse job market, with unemployment rates around 3.5%. Major industries include biotechnology, finance, and tourism, providing ample opportunities for career growth.

Massachusetts is rich in history and culture, offering many activities for residents and visitors. The state provides various entertainment options, from exploring historical sites in Boston to enjoying outdoor adventures in Cape Cod.

2024: Is it a Buyer’s or Seller’s Market?

2024 will be a terrific market for sellers. (And buyers, too!)

Home prices in Massachusetts are rising and will continue to rise till the supply-demand dynamic changes. The number of houses for sale in MA was only 10,637 in January 2024. There is very limited inventory to satiate the demand from house hunters. This also makes it the best time to sell a house in Massachusetts.

In fact, after the mortgage rate plummeted from a two-decade-high rate of 8% to 7.28% in January, new listings rose. This shows that those who refused to sell due to mortgage rate lock are finally acclimatizing to 7% rates. Come Spring 2024, more homeowners will follow suit and list properties on Massachusetts MLS.

As home listings in Massachusetts increase, home shoppers hugging the sidelines will also return. In fact, the recent uptick in mortgage applications shows that buyers are returning.

House hunters who could not find affordable homes in 2023 will also start shopping in 2024. The demand for Massachusetts houses will increase – and that’s why sellers may be able to dominate the market.

However, new builds will compete for attention from buyers. Home builders have persuaded buyers to buy new construction homes with mortgage buydowns worth $30K in 2023! Builders will continue offering concessions in 2024, and home sellers may have to wage wars against them.

Listings of new constructions, baby boomers looking to downsize, and desperate home sellers will flood the market in 2024. The properties for sale in Massachusetts will increase. So, whether you are looking for a condo in Newark or seeking to live in a co-op, you will find your dream home next spring.

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Disclaimer: This article is for informational purposes only. It does not constitute an offer, solicitation of an offer, or any advice or recommendation. Houzeo doesn’t provide any legal or financial advice. The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Houzeo Corp., its affiliates, or its employees. However, the author does not make any representation or warranty, express or implied, as to the information’s accuracy or completeness, nor does the author recommend that the attached information serve as the basis of any investment decision.

Frequently Asked Questions about Massachusetts Real Estate Market

When will the housing market crash in Massachusetts?

Not for the next few years. Massachusetts's housing market will not crash in 2024. Despite 2023's skyrocketing interest payments and soaring home prices, Massachusettsans have managed to keep the market afloat.

What are the real estate housing market 2024 predictions for Massachusetts?

2024 will be a stellar market for Massachusettsans. Here's our 2024 forecast for Massachusetts housing market are: (1) Home sellers will return to the market come Spring 2024. (2) Number of houses for sale will increase (3) Property prices in Massachusetts will increase marginally (4) Mortgage rates will stabilize in the latter half of 2024 (5) iBuyers will buy homes for lower than their fair market value. (6) Buyer agent commissions will be negotiable!

Are home prices dropping in Massachusetts?

No, the property prices in Massachusetts were up by 6.9% YOY in January 2024. However, you can still find some of the cheapest places to live in Massachusetts. With a 44.8% rise in the past five years, exploring budget-friendly cities is crucial amid the current scarcity of available properties in MA.

Is it a good time to buy a house in Massachusetts?

Yes! Currently, there are very few buyers in the market compared to the supply of homes in Massachusetts. The soaring interest rates has kept buyers at bay, so you can avoid bidding wars. As the mortgage rate stabilizes in 2024, more buyers will return, so we'd recommend you to buy a house now. If mortgage payments burn a hole in your pocket, you can always refinance.

» Best Time to Buy a House in Massachusetts: Find out the best time to buy a Massachusetts property & plan your finances accordingly.

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