Boston Seaport condo market is healthy, little risk of bubble

Are we in a Boston condo for sale housing bubble? It’s a question I’m often asked with Boston downtown condo prices rising and a brisk housing market continuing here in Bosotn. And more importantly, if we are in a bubble, when is it going to pop? The short answer is ‘no,’ we’re not in a bubble. A while ago, I ran across a very interesting report regarding the housing market published by CoreLogic. The article discusses exactly how ‘risk’ of a bubble is measured in the housing market and using their risk factors, I can again say that ‘no’ we are not likely in a Boston condo bubble here in the Boston condo market. And in fact, the article says that the majority of markets in the U.S. are healthy and have relatively low risk. But how do they know?

First – The Boston economy

The analysts look at home prices (such as Boston Seaport District) and whether the trend of prices is long-term sustainable by the local economy, specifically household incomes. The vast majority of citizens budget a big chunk of their monthly income for housing costs – whether they’re renting or own – so as incomes go up, there’s room for housing appreciation as well. However, risk can increase if this balance between incomes and housing costs gets way out of whack. Fortunately in Boston our incomes and job growth are steadily increasing. This is good news for those thinking of buying in the new Boston Seaport District.

Second – Rent vs Owning a Boston condo

Risk is determined by the relationship between the appreciation of home prices and costs to rent. If home prices and rents vary too widely, then you’ll know a correction is on the horizon, because a large difference between the two is not sustainable for the long term. Think of it this way, if home prices increase so greatly that more people would prefer to rent then eventually home prices will have to come down to satisfy what the market demands – more affordable homes.

Third – Boston condo flipping

The CoreLogic analysts look at the number of homes being flipped. If there’s a higher than normal rate of flipping and speculative investment it can falsely inflate housing prices and increase the risk of a bubble.

Fourth, Boston condo mortgage fraud

They also look at mortgage fraud numbers and an unusually high number of mortgage fraud can also signal higher risk for a bubble.

Conclusion

So, as far as the Boston Seaport condo market goes, our risk is low now by all of these measures. In fact, I’m seeing our market tapering off from the frenzied buying season of the past and as I talk to investors they tell me our economy is in good shape with incomes rising and job growth continuing.

If you have been considering selling your Boston Seaport condo, keep in mind that Spring is a great time to list. Please contact me today to find out what your Boston downtown condo is worth and we can talk strategy. I’d love to help you sell your current Boston Seaport condo and find a new one, right here in Boston

Boston Seaport condos for sale


Sorry we are experiencing system issues. Please try again.

Boston Seaport Condos for Sale under $1M

View Boston Seaport District condos for sale under $1M

Unlike other Boston condo brokers we give back 50% of our portion of the commission to YOU the buyer.


Sorry we are experiencing system issues. Please try again.

Boston Seaport Condos for Sale under $2M

View Boston Seaport District condos for sale under $1M

Unlike other Boston condo brokers we give back 50% of our portion of the commission to YOU the buyer.


Sorry we are experiencing system issues. Please try again.

Boston Seaport Condos for Sale


Sorry we are experiencing system issues. Please try again.

Boston Seaport Condos for Rent


Sorry we are experiencing system issues. Please try again.

Comments

comments

Call Now