With July stats for the Greater Boston real estate market just released, 2012 continues to be a year of recovery and, in many ways, a year of growth. As we saw in June, the market for both condos and single family homes in Boston is up year-0ver-year for both the number of sales and median prices.

Here are some of the highlights:

Boston Single Family Home Market

• Sales were up 24% with 1281 single family homes sold last month which is the busiest July in 8 years, and marks 13 consecutive months of year-over-year sales growth
• The median selling price increased 2.2% from last July 2011 (and 2% above last month, June 2012) to $510,000 – as you can see above, it’s the highest monthly median price since July 2007
• Pending sales in July were up on an annual basis for the 15th consecutive month, paving the way for a strong fall market, and high likelihood that 2012 will end up as the strongest year since 2007 (you’ll remember that as the last year before the financial world as we know it ended)
• Inventory of homes declined to 4058 homes on market, a 5 month low, and equivalent to 3.2 months of supply – an extremely tight market. Sellers, where are you?

Boston Condo Market

• In July 2012, there were 1,025 condo sales – up 20% from July 2011
• Median sale prices were up 6.4% over July 2011, though down 3.2% from June (but as you can see above, June 2012 had the highest recorded median price ever)
• Condos are averaging 71 days on market, the lowest level in 6 years
• The percentage increase in year-over-year pending sales has slowed slightly from previous months, but it still rose 11% over July 2011
•  There are only 2825 condos for sale on the market, a paltry 2.8 month supply of inventory

A Deeper Dive

The market looks vibrant, right?

It does, but it pays to dive a little deeper (as always).

Sales of both single family homes and condos declined month-over-month from June 2012 to July 2012.  That being said, over the past 10 years, 80% of the time July sales are lower than June sales and can be attributed mostly to a typical seasonal slowdown in the summer.  But could a portion of it also be attributed to current market factors.  The demand seems to still be there in strong force, but limited supply is still putting the breaks on the market to some degree which is showing up in the slowing pending sales increases.

But it just makes too much sense right now to buy. With rents increasing and mortgage rates near 3.5%, buying is looking increasing more attractive especially given the recent home price recovery and appreciation (even over a shorter time horizon for ownership period).  The demand will remain strong.  Will the supply finally catch up to meet it?  It better or the market will slow somewhat. There are just not enough homes on the market in Boston.

Advice for Buyers and Sellers

Sellers would be well advised to get their home on market soon to capture this current advantage of extremely low inventory before more homes come on market.  Know what the value of your home is right now to make a proper selling decision.  There’s currently some pricing power in the market for sellers that probably won’t be there if more homes come on market.

Buyers would be advised to keep looking and be ready to act when the right home comes on market. Having the confidence to act fast can help save money when there’s such low inventory. Timing can make a big difference.  You just need to be cautious and watch the fundamentals to avoid overpaying in the case of multiple offers.  Your home will come.  Stay confident and be ready to buy to take advantage of recovering prices and historically low mortgage rates.

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