According to the S&P/Case-Shiller Home Price Indices released on December 23rd, home prices in Boston were up by 4.4 percent when comparing October 2013 to October 2014 figures. As such, home prices in Boston are staying on track with the national average as well as the average of the 20 largest markets in the country. While the national average home price growth was 4.6 percent during this time period, growth within the 20 largest markets was 4.5 percent. The ten largest cities, which include Boston as well as New York, Washington, D.C., Chicago, Denver, Las Vegas, Los Angeles, San Diego, San Francisco and Miami, has an average growth rate of 4.4 percent.
Despite the fact that home price growth had previously been growing at a slow pace, many experts are predicting that growth with be much faster in 2015. While the cities of Miami and San Francisco experienced the most growth, with Miami seeing a 9.5 percent increase and San Francisco seeing a 9.1 percent increase, other major areas grew at a much slower rate than Boston. Cleveland, for example, only saw a 0.9 percent growth rate, while Chicago saw just 1.9 percent.
The housing price growth rate continued to be strong in Boston into November of last year as well. According to the Massachusetts Association of Realtors, the median price of a single-family home increased to $330,000 in November, which is up by another 4.4. percent when compared to October. The median price of condos in the city also increased by 1 percent to $302,000 when compared to last year at the same time. Altogether, the median price of single-family homes in Boston has increased in 25 of the past 26 months, while the median price of condos has increased in 17 out of the past 18 months.
The reason for the rising prices is largely due to a lack of inventory coupled with high demand. In November, the inventory of single-family homes was down to 19,068, which is a 13.2 percent decrease when compared to last year. The number of single-family homes listed for sale for the first time was also down by 9.7 percent. For condos, inventory was down by 23 percent and new listing were down by 3.3 percent.
Unfortunately, the lack of inventory has also lead to a decrease in sales. In November, single-family home sales were down by 6.7 percent when compared to the same time last year. Condo sales were down by 10.2 percent during this same time period. While it is normal for new listings to be down in November, these figures do not present an optimistic future for those who are interested in purchasing a home in Boston in the near future. One thing is clear, however: prices within the city are likely to continue to rise until more affordable housing options are constructed and put into place. Therefore, for those who are interested in making a move to the city, it is better to make a purchase now before the prices climb even further.