Massachusetts Home Buyers Priced Out of the Market [OPINION]
The average price for a single-family home in Massachusetts is a record $509,000 – that according to the Warren Group, which closely monitors this stuff for the industry. As a result, the sale of single-family homes was down 10.4 percent last month from September of 2020, but still 14.7 percent higher than in September of 2019.
Warren Group CEO Tim Warren said the $509,000 price is 7.4 percent higher than the average $474,000 price tag for September 2020 and up 27.8 percent from September 2019's median price of $400,000.
A caller to my program with knowledge of the real estate industry said the current sale price probably represents an average monthly mortgage payment of at least $2,500. He estimated that could equal more than two-thirds of a mortgage holder's monthly income.
The caller said that lending institutes and even home building trade groups are buying up new single-family homes as a hedge in the event that the current real estate bubble bursts, which he believes will happen sooner rather than later.
Tim Warren told the State House News Service the single biggest reason for the slide is that the typical price of a home in Massachusetts has climbed "too high too fast."
"There are not many people who are still looking for a home who can afford what homes cost these days," he said.
"The median price of a single-family home is up almost 18 percent so far this year, and that's on top of an 11 percent gain last year. And prices have risen every year for the last ten years, Warren said. "Homes are just too expensive for most people."
The Warren Group reported condo prices have also skyrocketed. The average condo price increased by 6.7 percent in September to $445,000. It's the 14th consecutive month with a median sale price above $400,000.
My caller said the bubble is about to burst, and when it does, it will rival the real estate bust of 2008 when millions of folks lost significant value in their investment or their property altogether.
Barry Richard is the host of The Barry Richard Show on 1420 WBSM New Bedford. He can be heard weekdays from noon to 3 p.m. Contact him at firstname.lastname@example.org and follow him on Twitter @BarryJRichard58. The opinions expressed in this commentary are solely those of the author.