First, as a Boston real estate broker, I wish to express my deepest sympathies for anyone who is or has a love one inflicted by the virus. Second, for your safety and others, please follow the guidelines as outlined by the CDC and encourage everyone you know to do the same.
A Healthy Boston Real Estate Market vs. Coronavirus
I’ve always believe that the Boston real estate for sale market is fundamentally determined by a simple formula: How many willing and able buyers are there vs. how many downtown condos are for sale? I believe this is and will always be the determining factor of the marketplace.
The Coronavirus in regards to the downtown Boston real estate market, has thrown a monkey wrench into my theory. Due to the coronavirus there will be less available inventory, fewer downtown condos coming on the market, there will also be less Boston condo buyers in the market.
Chief Economist Lawrence Yun of the NAR, National Association of Realtors, stated:
The coronavirus is leading to fewer homebuyers searching in the marketplace, as well as some listings being delayed. In the latest flash survey, 11% of REALTORS® indicated a reduction in buyer traffic and 7% are reporting lower seller traffic when asked directly about the coronavirus impact on the market … But the survey is implying in the short-term at least that home sales will be chopped by around 10%, compared to what would have been the case, due to the spread of coronavirus.
What is the most powerful factor in the downtown Boston real estate market? As stated, how many buyers vs. how many sellers, the Coronavirus will reduce both. Based on the current trajectory, one can conclude that transactions in 2020 will be less than previously projected, but if a seller wants to sell, they will likely be successful in finding a buyer due less competition with other sellers coupled with historic low interest rates, and if a buyer wants to buy, they will likely obtain pleasing mortgage rates and will still find a reasonable number of downtown Boston condos to choose from.
The Need to Sell a downtown condos vs. Coronavirus
The reasons for selling a downtown Boston condo, are still in place. The main reasons include: a growing family, death, divorce, loss of employment, followed closely by job relocation. In other words, all of the most fundamental elements to place Boston real estate for sale will not change because of this virus. Sure, the Coronavirus may slowdown the process, but it is unlikely to stop sellers in the above mentioned situations. As my father once told me Most home sellers, even in calm times, are forced sellers.
The Need to Buy a condo in Boston vs. Coronavirus
There are so many reasons to buy a home in Boston in 2020. First off, it is less expensive right now to pay a mortgage than it is to pay rent on a Beacon Hill apartment. I could see a home buyer desiring to move from a crowded Midtown apartment high rise complex into a Beacon Hill condo. Also, the way mortgage interest rates are going, owning a home is only going to get more and more affordable compared to renting.
Boston Real Estate Market so far in 2020
The Boston housing market in Jan. and Feb. of 2020 was very strong, stronger than most had foretasted. We saw an increase of inventory and an even great increase of buyers to purchase. All signs pointed to a Boston real estate market surpassing expectations in 2020 and the first potential signs that the Boston housing market would (soon) end its cooling off session. Of course it is too early to give accurate numbers on the Boston real estate market in March, but what I can tell you from a “boots on the ground” perspective is that we are still seeing strong home buyer traffic at every level of the industry, from starter to luxury homes.
Will the Boston Housing Market Crash in 2020?
We have a very strong local economy to bolster our real estate market. While COVID-19 will likely lead to less home sales in 2020, unless the entire economy of the U.S. is ruined, the local Boston real estate market has nothing but strong economic fundamentals to back it up
As I stated in one of my previous blog posts in regards to the cornonavirus:
The silver lining is….. I literally thought the days of 3.5% interest rates were moments of the past. But now there is a whole new opportunity. And regardless of what happens, just buy and hold.
Boston Real Estate for Sale