PEABODY — There’s no relief in sight for buyers as record prices are putting the American Dream of homeownership on hold, according to new data from The Warren Group, the Peabody real-estate tracker.
While single-family home sales in most North Shore communities slumped through July, prices continued to skyrocket.
In Lynn, home sales fell by 3 percent for the first seven months of the year. Analysts say a combination of factors, including too few homes for sale, and out of sight prices in Boston’s downtown neighborhoods, and once-affordable places like Somerville, Chelsea and Everett, have sent buyers north seeking alternatives.
As sales dipped in Lynn, the median price of a single-family home rose by nearly 8 percent to $366,000, up from $340,000 for the same period last year. In July, the median hit $377,000, the highest recorded price in the city since The Warren Group began keeping records more than 30 years ago.
Home prices in Lynn hit bottom in 1995 when a median priced single-family home was $92,000. Since then, home values have soared by nearly 300 percent.
“These prices defy logic and none of it makes sense,” said Beth Connor Doran, a broker with Connor Real Estate in Lynn. “But for out of town buyers, our prices are much more affordable. Buyers can’t find anything in or near Boston for under $400,000.”
The result, she said, is lots of disappointed potential buyers.
“One of my clients bid on eight homes before her offer was accepted,” Doran said. “Lots of people are getting discouraged because they’re competing with so many other bidders.”
Lynn was not the only city to see home prices soar as sales slipped.
In Lynnfield, the number of single-family home sales has declined by 24 percent since January. During that period, prices rose by 2 percent, putting the median price at $690,000.
Nahant home sales have fallen by 42 percent this year compared to 2017 as median prices climbed to $565,000, a 21 percent hike.
It was the same story in Peabody where sales dipped by 9 percent since January as prices rose 2 percent to $441,000.
In Swampscott, sales have slipped by 15 percent while prices rose to $580,000, a 1 percent increase over a year ago.
The outliers were Marblehead and Saugus. In Marblehead, the median price increased by 1 percent to $700,000 as sales rose by 6 percent.
Saugus sales grew by 10 percent while the median price for a single-family home surged by 6 percent to $455,000.
Daniel and Barbara Peterson, co-broker-owners of E.W. Peterson & Son Real Estate in Saugus, said construction of a $160 million middle and high school, low property taxes, and buyers priced out of places like Boston, Chelsea and Everett are driving Saugus sales and prices up.
Brokers say the lack of homes for sale is the cause for dwindling sales. The Massachusetts Association of Realtors reported there were 13,783 single-family homes listed in the Bay State in July, the most recent data available, that’s down 16 percent from a year ago when there were 16,385 houses on the market.
But buyer’s agents say the reason for the drop in sales has more to do with prices.
“Inventory is low, but home prices are entirely too expensive, and we’ve been saying that for a while, normal middle income people can’t afford to buy a home,” said Craig Singer, an agent at Buyers Brokers Only in Danvers. “The other factor is the economy is not as strong as people say it is.”
What’s happening with the North Shore’s residential market is reflected statewide. Through July, there have been 32,643 single-family home sales in Massachusetts, a nearly 2 percent decrease from the first seven months of 2018. As sales fell, the median sales price grew to $400,000, up 4 percent from a year ago.
“This is the third straight month of prices being over $400,000 for single-family homes,” said Anne Meczywor, president of the Massachusetts Association of Realtors, in a statement. “While they might moderate a little in the fall, we have to get used to this being our new normal … until we can increase supply.”