The housing market is running full steam ahead,” says Selma Help, deputy chief economist at CoreLogic, which produces the S&P Case-Shiller CoreLogic Home Price Index. “Many observers are questioning where the train is heading and what the next stop will look like.
The Boston real estate market’s ever-rising prices stem from two key factors: Extremely low housing supply and unprecedented demand from buyers.
National Housing Supply
Currently, the U.S. has just a 3.6-month supply of homes — nearly the lowest point on record. When you throw in the pandemic-spurred clamor for housing, you have an ultra-competitive landscape marked by bidding wars, inflated offers and continuing price growth.
Boston Condo Buyers
No one really knows when Boston real estate prices may decrease, but if rates continue to increase as the economy improves and home prices continue to rise, buyers will be unable to afford homes on the market, forcing sellers to slowly lower their prices.
In addition, more inventory may be on its way, too, which should also help slow the speeding train.” (Note the word “slow,” not “stop.”)
There are early signs of increasing availability of for-sale homes and a squeeze on new buyers’ budgets due to high price tags and rising rates Given these factors, home price appreciation should ease in coming months but remain in high single digits in the Greater Boston area.
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