Boston condos for sale prices have been on the rise for the last decade, leading many housing market analysts to conclude that first-time homebuyers are being shut out of the market due to affordability concerns. But the Boston real estate for sale market has changed in the last few months.
From National Association of Realtors
Mr. Yun. economist for NAR states:
Record-low mortgage rates are likely to remain in place for the rest of 2020 and will be the key factor driving housing demand as state economies steadily reopen, Still, more listings and increased home construction will be needed to tame price growth.
Boston Real Estate and First Time Home Buyers
One positive sign? First-time buyers don’t seem to be deterred by COVID-19 concerns. If anything, the data shows that demographics is slowly but surely entering the market, perhaps realizing that this might be their opportunity. First-time homebuyers were responsible for 36% of sales in April, up from 34% last month, and 32% in April 2019.
Is there a decline in Boston Condos?
Yet another trend that seems to be emerging from the coronavirus fallout is declining interest in condominiums. Existing condominium and co-op sales in April were down 26.4% from March, and 31.6% year over year.
More from the National Association of Realtors
“There appears to be a shift in preference for single-family homes over condominium dwellings,” Yun said. “This trend could be long-lasting as remote work and larger housing needs will become widely prevalent even after we emerge from this pandemic.”
So, what does this all mean?
First-time home buyers have not disappeared from the market as many analysts had believed. Buying a home is very much a part of the American Dream for younger generations, just like it had been for their parents and grandparents.
This also means that rising prices have COVID -19 hasn’t scared buyers away from the market. Many first-time buyers are making sacrifices to save their down payment and make their dream a reality.
Boston Real Estate for Sale and the Bottom Line
If you are one of the many Beacon Hill apartment renters who are scrolling through listings on your laptop every night dreaming of buying your own piece of Boston real estate, to call your own, there are opportunities in every market to make that dream a reality!
- The percentage of respondents who said it is a good time to buy a home decreased from 53% to 47%.
- Consumers with incomes between $50,000 and $100,000 were particularly pessimistic.
- Competition for housing does not appear to be letting up at all.
It is tough to be a homebuyer today. The supply of homes for sale is at a record low, homebuilders are slow to step up and prices are rising at the fastest pace in nearly two decades.
No wonder sentiment among homebuyers fell to the lowest level in the 10-year history of Fannie Mae’s monthly Home Purchase Sentiment Index.
The percentage of respondents who said it is a good time to buy a home decreased from 53% to 47%, while the percentage who said it is a bad time to buy increased from 40% to 48%.
Respondents to the survey largely cited high prices and tight supply as the chief reasons for their pessimism, according to Doug Duncan, senior vice president, and chief economist at Fannie Mae.
“The decrease in homebuying sentiment likely indicates that some consumers, potentially flush with savings – perhaps boosted in part by stimulus payments – may be attempting, but failing, to buy a home due to heightened competition for relatively few listed homes,” Duncan said.
Competition for housing does not appear to be letting up at all. In fact, competition is hitting record levels.
In another record, 48% of homes sold for more than their list price, up 20 percentage points from the same period a year earlier.
Home prices are up more than 11% from a year ago, due to high competition that is resulting in bidding wars. Low mortgage rates are no longer helping much, because they helped to fuel those high prices. Prices are also rising for new construction, as builder costs are soaring.
“Right now we are seeing a substantial increase in home prices, which could be a precursor to more widespread inflation throughout the economy,” said Daryl Fairweather, chief economist at Redfin. “Lumber prices are surging, which has driven up prices of new homes and indirectly drives up prices of existing homes.”
Fairweather also notes that as states lift their Covid pandemic restrictions, there could be price increases in other sectors, from food to gasoline. That would cut into a homebuyer’s budget and might ease competition for housing.
“A more balanced market could encourage more move-up homeowners to finally sell because they won’t be so fearful about being able to find and compete for a home to buy,” she added
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