Boston condos for sale: The big question should I buy now?
If you’ve been thinking about buying a Boston condo for sale, you likely have one question on the top of your mind: should I buy right now, or should I wait? While no one can answer that question for you, here’s some information that could help you make your decision.
Each quarter, Pulsenomics surveys a national panel of over 100 economists, real estate experts, and investment and market strategists to compile projections for the future of home price appreciation. The output is the Home Price Expectation Survey. In the latest release, it forecasts home prices will continue appreciating over the next five years (see graph below):
As the graph shows, the rate of appreciation will moderate over the next few years as the market shifts away from the unsustainable pace it saw during the pandemic. After this year, experts project home price appreciation will continue, but at levels that are more typical for the market. As Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), says:
“People should not anticipate another double-digit price appreciation. Those days are over. . . . We may return to more normal price appreciation of 4%, 5% a year.”
For you, that ongoing appreciation should give you peace of mind your investment in homeownership is worthwhile because you’re buying an asset that’s projected to grow in value in the years ahead.
To give you an idea of how this could impact your net worth, here’s how a typical home could grow in value over the next few years using the expert price appreciation projections from the Pulsenomics survey mentioned above (see graph below):
As the graph conveys, even at a more typical pace of appreciation, you still stand to make significant equity gains as your home grows in value. That’s what’s at stake if you delay your plans.
If you’re ready to become a homeowner, know that buying today can set you up for long-term success as your asset’s value (and your own net worth) is projected to grow with the ongoing home price appreciation. Let’s connect to begin your homebuying process today.
In this video, the quest is asked should you Buy Now or Wait? Inflation is out of control, Interest rates are rising along with a decline in buyer demand? Should you buy now or wait for a housing crash? In this video, the host discuss the changes that we are currently seeing in the housing market and what you need to consider as a home buyer in order to help you make the best decisions when buying a house or condo in a changing market.
Updated: Boston Real Estate Blog 2022
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These are not easy questions to answer. The simple answer it depends. Let me explain
- While Boston condo valuations have been all over the map, they will more than likely return towards the middle range of their historical levels.
- Currently, downtown Boston real estate is quite expensive.
- But unusually low rates are keeping monthly payments at reasonable levels, and should those low rates persist, it’s possible they could prop up valuations indefinitely. But lets face it a Seller’s market never dies of old age.
- It’s also possible that due to unique economic factors, valuations could settle at a different equilibrium level than they have historically. But this would likely be subtle and somewhat risky to bank on.
So where does that leave a potential buyer? It depends on the situation, and whether one is more concerned with future changes in monthly payments or prices.
If one is buying a Boston high rise condo to keep for the long haul, and financing the purchase with a fixed mortgage, then the main priority is probably to lock in a reasonable long-term monthly payment. In this case, it may well make sense to buy. Monthly payments are lower than the historical average even despite high ac-acquisition prices.
If on the other hand a buyer isn’t planning to keep a Boston Seaport condo for long, then it makes sense to be more concerned with what prices will be when the time comes to sell. While it’s possible that valuations could remain elevated, current price levels suggest more downside than upside. However, this will become less of an issue as time marches on and incomes and rents have a chance to catch up with prices. (To put some very rough numbers on it: 5 years feels risky; 10 years a lot less so).
Every situation is different, but the rough rule of thumb is:
- If monthly payments are the primary concern, it may make sense to buy.
- If future price changes are the primary concern, it may be best to hold off until valuations are a bit more reasonable.
The good news here is that there isn’t a lot of pressure to do either one. There have been times where it was crazy to buy Beacon Hill condos for sale, and times where it was crazy not to. This is neither of those times. Either choice is reasonable, depending on circumstances, so you can do what best fits your own circumstances and lifestyle.