I know that President Trump thinks this “virus thing” will subside by Easter, and I hope he’s right. But my gut is telling me the Boston real estate market will NOT have a Easter Resurrection. Don’t misunderstand me, I really do hope Pres. Trump prophecy is correct, but I must confess I don’t have much faith that the Boston real estate market is really going to be rising from the dead by Easter. Ok, enough with the puns. Here’s what I think.
I stongly believe, construction companies and workers are taking all the necessary precautions to minimize the risks of catching and spreading the coronavirus’ Mayor Walsh, gas taken steps to shut downtown Boston high rise condo construction projects, this will help minimize the illness. But even so, if workers were to get sick, it could cause a shortage of labor, depending on the extent, this could slow down residential high rise condo construction severely in the Boston housing market.
If the coronavirus continues to spread, there could be problems with acquiring building materials. This is despite the fact that the ultra-low interest rates do make these materials much cheaper and reduce the costs of residential construction significantly.
Another issue is that banks are already holding financing for some constrcution high rise condo projects as they wait to see where the current situation leads.
To sum up, the general forecast is that, if the situation continues on this path, the Boston Area’s housing crisis could worsen. However, if we adhere to the social distancing order in effective and people remain at home in isolation, it’s more than likely that in around two months’ time, banks will begin to write loans again and construction will continue as planned, helping to ease the housing shortage as we move forward in 2020.
As a Boston real estate broker, I predict that there will be a drop in Boston real estate sales, an increase in days on market, and a 90% chance flattening and a 50/50 chance of a drop in home prices. In addition, I think that some Boston condo buyers will sit out of the market for now but there are still active listings, it is likely that, during this time, the Boston real estate market will fall into a buyer’s market. I haven’t used the phrase a buyers market in years. However, I do think, that if it shoud occur it will be short-lived, in other words, one year at the most.
If you’re hoping to cash in on the low mortgage rates and take advantage of the soon-to-be buyer’s Boston condo market, my advice, would be move fast (not yet, but perhaps after Easter). Because once we reach the apex of this virus, the economy will at slowly pick up speed and then take off like a rocket, when that happens the pent up demand will be in full force, interest rates will rise sharply and bidding wars will occur again.
The Boston real estate market is solid investment, this virus shall pass.
One my past Beacon Hill condo buyers called in a panic the other day about how he was afraid that the condo he purchased may drop in value. He went on a 15 minute rampage. I just told him I’m reminded of a quote I recently heard:
And he said to them, “Why are you afraid, O you of little faith?