A friend sent me an email to find out what I thought about the Boston real estate market.
Here is my response, slightly edited.
Anything you say to me will be held in strict confidence.
Regarding the Boston real estate market, we have had it pretty good, compared to the national real estate market.
Prices in the city of Boston have stayed pretty much constant. In fact, there have even have been a slight increase in prices (on average, at least).
My expectation is that Boston will be able to stay this strong over the coming year. I think the national economy will get better, provided we don’t have a resurgence of Covid-19, that it will have an effect on us, here. Otherwise, I think our unemployment rate will improve as reported yesterday, I think people will be a little bit scared about social and the health situations.
Going forward, I wouldn’t bank on any appreciation except at the rate of inflation. So, 3% per year? Not bad, really.
There are two reasons I believe our prices have remained high. A good economy. And, restricted supply.
We will see some nice developments completed over the next 18 months especially in the Seaport District.
If you are looking in the suburbs, I think you’ll find prices will remain high, as well. Towns have gotten so restrictive on new growth. And due to COVID-19 more and more young couples, especially with kids are now moving to the burbs
If you are going to buy some time in the next year, I think you should be okay. It’d be better to wait six months, in my opinion. I think we need three-to-six months of stability before we know what’s going to happen next. I think most buyers feel the same way. Banks are tightening up with mortgage requirements. Sales volume has dropped due to lack of new downtown Boston real estate listings
As stated, Inventory in the city is not very high. I think some sellers are waiting to see what happens before they sell. Most sellers still have a lot of equity built up, so it’s not as if they are holding out because they need to sell. I guess they are wondering – if I sell, where the hell am I going to move? Everything else for sale is still expensive. So, unless they’re moving out of Boston, their choices are still restricted. In the old days, you’d move up to a better home and bank some money on your sale at the same time. Not possible, any longer.
Even with the new construction, I don’t think we’ll have a glut of inventory. There will be some projects that have it harder than others. In fact, some projects have already been canceled outright. This is good and bad. The bad is, we could use the new inventory to drive prices down. The good is, it will restrict supply and allow sellers to sell at high prices.
I know, it sucks trying to buy when it’s expensive, but great when you are selling, right?
So, to sum it up, again, I think we’re in a “stable” market considering all that’s going on in the world. I don’t think prices will go down, and I do think prices will go up once we get through this crisis.
In Boston, it’s all about location. If you buy anywhere in the Back Bay / Beacon Hill / South End, you should do fine. Existing units in brownstones should remain in demand. However, I would take a long hard look at properties under construction – I would be nervous buying in a project under construction where they can’t guarantee how many units are under agreement. Even then, the developer might pull out and never finish, or lose his financing, etc.
Once you get closer to searching, I would be happy to give you my opinions on the new projects, if you should decide to go that route.
In the meantime, read my blog every day. It’s very useful and interesting. It gets thousands of readers, hopefully, some are Boston condo buyers. I try to provide my readers with news they can use, in an unbiased way, sometimes (although some people think I’m a sleazy Realtor, of course).
All the best.
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