Governor Baker has begun lifting bans in certain business, just recently golf courses an more bans are expected to be lifted by May 18th. Hopefully, real estate services will of buying or selling a home should begin to move closer to normal, subject to social distancing and other precautions. A discussion of Boston guidelines for dealing with the coronavirus health crisis is beyond the scope of this blog post. I will limit this discussion to factors affecting the real estate market and going forward.
It is likely that even after restrictions on Boston real estate showings are relaxed there will be a reluctance on the part of some to interact with others. This will affect all businesses and commercial activities, including Boston condos for sale. There is really no way to know how deep or lasting this reluctance will be. I would prefer to focus on more measurable predictors of activity.
One very measurable indicator is mortgage interest rates. As of May 9, 2020, mortgage rates continued to fall on a month-over-month basis to an average of 3.52% for a 30-year fixed rate mortgage. Mortgage rate trends are expected to remain at nearly historical lows into the foreseeable future. Of course, that makes the purchase of a downtown Boston condo or investment property more affordable. It can even make the purchase of a home financially preferable to renting a Beacon Hill apartment because monthly housing expense can be lower to the owner than the renter; and the possibility of building equity in the home over time provides a very real and attractive incentive to purchase a Boston high rise condo.
Another predictor of market activity is the supply of available Seaport, Midtown and Beacon Hill condos in the context of buyer demand. It is no secret that the residential real estate market immediately preceding the COVID-19 crisis was a “seller’s market,” characterized by low inventory and a relatively large number of buyers competing for the limited inventory. This often resulted in multiple offers on downtown Boston real estate for sale. I have seen no reliable data to indicate a real shift in that market dynamic as the downtown Boston real estate market re-opens to normal activity.
One uncertain factor, If some Boston real estate buyers are at first reluctant to meet with downtown real estate brokers to view homes of interest, there may actually be less buyers competing for the limited inventory of Boston condos for sale —at least in the early stages of re-opening. Listings that might have promptly received multiple offers in February might therefore receive fewer offers due to the reluctance of some buyers to “put themselves at risk” by viewing properties for sale. This might give a somewhat short-lived advantage to those prospective home buyers who are willing to engage in market activity early on.
Housing and home ownership are fundamental pillars to Boston’s economy, and there is little expectation at this point that this will change. The short-term economic downturn caused by the coronavirus pandemic was not the result of weaknesses in the Boston condo market—it was the result of the shut downs caused by the pandemic.
As long as the overall economy begins to move again—and displaced workers are able to get back to work and therefore support their previous goal of Boston condo ownership—the real estate market should return to normal in relatively short order.
Let me end this blog post with this:
I’m just a dreamer
I dream my life away
I’m just a dreamer
Who dreams of better days – Ozzy Osbourne