Are home prices dropping in Massachusetts? No way. Prices still going up, up, up

While fewer homes are being sold on the South Shore and across the state, the amount of money sellers are getting for their homes continues to rise, according to data from The Warren Group.

The rate of median sale price increases has slowed considerably compared to recent years when mortgage interest rates were lower. The median price increase for the South Shore between 2020 and 2021 averaged 16%, whereas between 2022 and 2023 (through August), it averaged 5%.

The overall sales of single-family homes in all of Massachusetts was down nearly 25% from 2022 to this year, but the median sale price was up just a tick at 3%.

And because interest rates have increased – the average is just under 8% – longtime homeowners or those who bought homes at the height of the COVID-19 pandemic are less likely to sell, said Cassidy Norton, associate publisher and media relations director for the Peabody-based real estate data group.

This in turn shrinks the availability of homes on the market, driving up prices along with inflation.

Both Norton and Michelle Cox, president-elect of South Shore Realtors, noted how difficult the market is for first-time homebuyers.

More: Is it still possible to buy a starter home on the South Shore? Experts say yes, but for a price

“Unless you’re moving away or want to downsize, it’s like, ‘Why do it now?’” Cox said.

Sales of single-family homes on the South Shore through August were down between 2% and 37%, depending on the municipality, compared to Warren Group data from the same time frame last year.

In a little more than half of those cities, the median sale price was up year over year, between less than 1% and 34%.

Even with four months left to go in the year, most South Shore communities have higher single-family home median sale prices through August of this year compared to all of 2022. The highest prices were in Cohasset and Duxbury.

The median price among the 54 home sales through August in Cohasset hit $1.56 million, a nearly 28% increase from 2022, when 92 homes were sold.

In Duxbury, which just surpassed the million-dollar threshold this year at $1.2 million among 82 homes sold, there was a 32% median sale increase in comparison with 2022, when 162 home sales occurred.

A handful of municipalities in the area have seen a less than 5% decrease in median sale price this year compared to last year. Those include Hingham at the higher end at $1.2 million and Hanson at the lower end at $470,000.

Condominium sales tell a slightly different story.

What was once viewed as a more affordable property-owning option to homebuying, condo median sale prices in some South Shore communities meet or exceed single-family prices.

More: Shore Shore Chamber: Rising interest rates, banks putting pressure on real estate market

While the majority of South Shore communities saw an increase in median condo sale prices, a few have had a double-digit decrease in prices through August compared to all of last year. Kingston had as much as a 25% slump in condo median sale prices at $288,300 and Scituate's prices were down nearly 12% at $669,900.

Pembroke and Quincy, on the other hand, have seen steep rises in condo median sale prices, at 34%, or $549,000, and 19%, or $510,000, respectively.

Norton said she expects that the trend of fewer home sales will last “quite a while.”

It’s a situation that “can’t be solved unless mortgage rates go down, or people learn to live with the new reality,” she said.

Hannah Morse covers growth and development for The Patriot Ledger. Contact her at hmorse@patriotledger.com.

This article originally appeared on The Patriot Ledger: Will home prices drop in 2023 Massachusetts?