Its time to take a sober look at the realities we will be facing in the future, there is a lot of uncertainty around how the coronavirus which will affect the local downtown condo market. Over the past few years, the downtown Boston housing market has been increasingly upward projectory with the average home sales price rising year over year.
Now the big question is: Will Covid-19 slow sales or will buyers jump to take advantage of historically low interest rates?
THE IMPACT OF COVID-19 ON THE BOSTON REAL ESTATE FOR SALE MARKET
The coronavirus has already changed our daily lives. Bars and restaurants closing, and many of our friends and family memebers practicing social distancing, self-quarantining, and generally spending more time alone in the home watching Netflix. Going into someone else’s home is just one more opportunity to come in contact with germs, and surely there are quite a few buyers foregoing showings at the present moment.
According to a survey performed by the National Association of REALTORs last week, only 16% of real estate agents said the coronavirus has affected buyer interest. However, I would have said the same thing last Monday when surveyed. More and more brokers are hearing from their clients that they would be holding off on their Boston real estate search until the Covid-19 scare blows over.
WILL THE CORONAVIRUS REDUCE THE NUMBER OF BOSTON CONDOS ON THE MARKET?
I’ve been noticing that sellers are having fears about letting strangers into their homes. As a result, less condominiums are comin on the marktet In Beacon Hill, Seaport and Fenway we have had incredibly low inventory for far too long. There are simply not enough condominiums for sale to accommodate the buyer pool. Will this contonue? Will sellers decide not to list their home due to fears of contamination? It’s quite possible, and this will only exacerbate the low inventory issue. Builders too are seeing the affects of the coronavirus. Nearly 1/3 of our raw building materials come from China, and this doesn’t even account for assembled goods such as appliances and fixtures. A freind of mine in the flooring industry, has already witnessed supply chain issues, with builders and contractors unable to get tile they had originally ordered since it was produced in China. If builders are delayed due to material delays, and sellers are reluctant to list, it won’t matter that interest rates are at historically low levels. Buyers won’t have any downtown Boston condos to buy. Couple that with Mayor Wals halting contruction of Boston high rise condos. How can this not have some kind of impact.
HOW WILL THE CORONA VIRUS IMPACT THE SPRING BOSTON REAL ESTATE MARKET
After St. Patrick’s Day, we histotically enter what is typically the Boston real estate for sale spring market. Usually, this is when the largest percentage of sellers list their downtown Boston condo, and the majority of buyers purchase. Boston real estate sale prices are usually the highest in the coming months as buyers compete with one another. However, it’s unknown how the coronavirus will affect the seasonality of the Boston condo market. Will it delay the spring selling season? Will it have no affect at all? Or, will it cause a mass recession or worse a depression leaving buyers unmotivated or unable to make moves. After all, what good is an incredibly low interest rate if you are not sure you will have a job next month.
WHAT CAN WE LEARN FROM THE PAST?
First everyone take a deep breath. In the past, Boston has been largely spared from any national housing market collapses. In 2009, the median sales price stayed realtively steady in most downtown Boston neighborhood markets. It increased to in 2010 and rose slighly in 2011. Since then, the median sales price has been steadily increasing. We wrapped up 2019 with record high median sales price in the downtown Boston area.
With that said, It’s not unrealistic to think that the coronavirus may slow downtown Boston condo salwes closing Furthermore, if there is one area that may be more affected than others, I suspect it will be the luxury condo market. After the housing market crash, we saw Boston high riese condos suffer the most. Overall, it’s still too early to say how the coronavirus will affect the the Boston real estate for sale market. But is there is one take away it is is this, Boston has astrong economic base especially in the health field, which is more needed than ever before. I see this as a slight blimp in our economy, and as your parents always told you this to shall pass. When it does the Boston economy will be as strong as ever.
If you have questions about how it may affect your specific real estate goals, give me a call. I’m happy to share my opinions with you.
Boston Real Estate for Sale