Last spring, the housing market in Brookline was in hyperdrive. Bidding wars were common and buyers often waived inspection and finance contingencies, local brokers recall. Homes routinely sold for above asking price.
This year’s Brookline market has cooled somewhat, particularly for condominiums, but low inventory and high mortgage rates mean buyers continue to face difficult conditions and the average price for single-family houses continues to rise.
One fact has not changed: Brookline is still expensive and out of reach for many, with homes going for well above the Massachusetts six-month average of $720,150 for single-family houses and $669,139 for condominiums, according to Multiple Listing Service data.
The average single-family home in Brookline for the six-month period ending May 7 of this year was $2.876 million, and homes went at just around asking price on average.
That’s up from the same period in 2022, when the average single-family house in Brookline sold for $2.655 million, and 3% above asking price.
Condo market eases up
Condominiums, on the other hand, have dropped from selling for an average of $1.135 million to $1.121 million, and are now typically selling for less than asking price.
This spells a little more wiggle room for buyers, according to brokers.
“The condo market has slowed down,” said Ruth Malkin, a real estate agent and vice president of Compass Real Estate. “Sellers have to negotiate on the price.”
It’s not quite what Malkin would call a buyer’s market, but it is a “much more even market for buyers and sellers than it has been in recent years,” she said.
The newfound wiggle room, however, often butts up against the impact of rising interest rates.
‘With the mortgage rates what they are, somebody taking out a loan for a million dollars was paying $4,800 for mortgage payments about a year and a half ago,” said Malkin. “Now for the same $1 million loan, they’re looking at $6,300. That’s a huge jump.”
This is happening without equivalent movement in housing prices. “Buyers may have a bit more negotiation power,” Malkin said, “but it still doesn’t cover the difference in mortgage.”
Low inventory remains
Only 39 single-family homes and 63 condominiums were on the Brookline market earlier this month, up from last year’s record low but low nonetheless.
Realtors cite a myriad of causes for the low inventory, including little new building, the reluctance of residents to leave their homes, and rental dynamics.
“Brookline is a community where you’ve got a lot of people who own property that they can rent out, and rental rates are significant,” said David McCarthy, president of the Massachusetts Association of Realtors. “So they’re not looking to sell.”
Rising interest rates affect both inventory and affordability, leading potential sellers to hesitate to put their homes on the market.
That reluctance can be true both for residents looking to move up, or to downsize.
Susan Rothstein, a real estate agent with Hammond Residential, gave the theoretical example of a couple who wants to sell their house in Brookline for a condo in Boston.
“They’re having a lot of difficulty giving up their low interest rates and those low payments and taking on a five or a six or a seven percent interest rate,” Rothstein said. “So it becomes a vicious cycle where there isn’t enough inventory, and then people that are ready to sell can’t find something suitable for them to move into.”
Buy or build?
Marie McKiernan, an attorney who owns a three-bedroom home near Washington Square with her husband and three children, is facing a decision about whether to build an addition or buy a bigger house to make room for a family that has grown in the 4 years they’ve owned their home.
“We find ourselves in a position where we’d like some more space. So we’re in a conundrum: do we buy or do we build?” McKiernean said. “We’ve seen several houses, but there’s really only been one house that I think covered everything we would want. And that was just exorbitant.”
Low inventory and high interest rates might force their hand, she said. She and her husband have looked at homes in Newton, but they find it hard to imagine leaving Brookline.
“It’s a really nice community to be a part of,” McKiernan said. “And I think our sense of community is growing.”
So for now, McKiernan said, she and her husband are waiting for a construction quote–and keeping an eye on lumber futures.