by Erin Ailworth, Globe Staff
Tight inventory continues to push costs higher for Massachusetts buyers
The Massachusetts housing market continued to boom in October, as home sales and median prices jumped by double-digit rates from the same period last year, according to a report Tuesday by a Boston real estate tracking firm.
Single-family home sales rose 18.5 percent last month, while the median price increased nearly 10 percent, to $313,050 — the highest price for October since 2007, according to Warren Group. It was the fourth consecutive month that sales increased by 10 percent or more from the previous year.
“The pace of the housing market has surpassed expectations this year,” said Warren Group CEO Timothy M. Warren Jr. “The past four months have really been booming.”
If the trend continues, Warren said, home prices by next year could return to their prerecession peak of $355,000, reached in 2005. The median price for homes sold for the first 10 months of this year was $324,900.
A widely followed survey of metropolitan real estate markets, the S&P/Case-Shiller Home Price Indices, also found Boston area values on the rise. The index, which tracks repeat sales, showed that Boston area prices rose for the third consecutive month in September, gaining 7.5 percent from a year earlier.
Warren said the surging housing market is driven in large part by pent-up demand from Massachusetts residents who put off buying homes in the years following the housing bust and economic downturn. With the economy recovering and consumer confidence improving, buyers are now making their move.
That strong demand coincides with a tight supply of homes on the market. The result: rapidly rising prices. The inventory of single-family homes for sale this October decreased by nearly 20 percent from the same period last year, according the Massachusetts Association of Realtors.
The realtors group, which tracks a slightly smaller universe of sales than Warren Group, reported similar statistics Tuesday. Home sales rose 12.2 percent from a year earlier, and prices jumped 12.3 percent year-over-year to $320,000.
“If sellers continue to sit this market out and inventory continues to shrink, we’re going to see fewer qualified buyers able to keep up with increasing prices,” Kimberly Allard-Mocia, president of the realtors association, said in a statement. “Full recovery is close, but now it is up to the sellers to make it happen.”
Warren and Barry Bluestone, director of the Dukakis Center for Urban and Regional Policy at Northeastern University, said they expect housing inventory to increase this spring, as buyers continue to bid above asking prices for months and potential sellers realize they can recoup their investments— and more.
“We’re going to see a significant amount of single-family homes for sale, which will tend to moderate price increases,” Bluestone said. But for now, he added, “This is becoming a very good time to sell.”