If you are feeling like there are just not enough houses on the market this spring, you are not imagining things. A recent article on Realtor.com outlined the problem. In short:
From 2009 (the slump) to today new construction of single-family homes, condos, and apartment units totaled 5.6 million. Over the same period, roughly 1.7 million housing units were deemed uninhabitable or obsolete and were demolished. That is a net of 3.9 million houses.
In that same time period, the population grew by 17.3 million. Given the average household size is 2.5 persons, a total of 6.9 million new housing units would be needed – a shortage of 3 million homes. So no surprise that home ownership is down 3.7% since 2009.
Add to that the fact that incomes have grown at slow pace – 2% over the past year. While home prices have risen by 6% in the same time period.
To give a more local perspective, below are some local comparisons from 2009 to today:
- The median price of a single-family home in Newton grew from $939,000 to $2,124,999.
- The median price of a condo in Boston grew from $419,900 to $829,000.
- The median price of a condo in Cambridge grew from $489,500 to $668,000
- The median price of a condo in Somerville grew from $364,450 to $709,950
The problem has been exacerbated by the fact that retired adults are moving back into the city. Everyone want to live in walkable neighborhoods. Typically, these retired baby boomers have the money (in cash) to buy up properties that would normally be bought by young families working in the city making the battle for these limited properties more frenzied.
That is not to say that prices are up everywhere. Home values follow the jobs. The farther you are from the Boston/Cambridge mecca of job opportunities, the less likely it is that prices have risen. For example:
- The median price of a single-family home in Worcester is exactly the same at $214,900, while condo prices are down.
- The median price of a single family in a majority of towns outside the Greater Boston area are up about 5% in that same time period from 2009 to today. – from cities such as Lowell to suburban towns like Boxboro, Georgetown, Foxboro, etc. While that is great for people looking to buy in these towns, it means the possibility of selling in one of these towns and moving closer to the city is drifting off farther into the distance.