Boston Real Estate for Sale

Editorial Note

Boston Condos for Sale

Loading...

Editorial Note: Why we won’t see a decrease in Boston condo for sale prices anytime soon.

If we’re going to come together and invest the time in conversation, in research or in analysis, we should begin by understanding what would be required for you or I to change our minds.

If you’re not willing to consider that you’re wrong, then, in the words of a Dan Dennett, you’re a spectator, not a participant.

Let’s agree on the standards of proof, and lets begin.

I recently read a very interesting government article, I know that sounds like an oxymoron, but, in the article it stated that lowering mortgage interest rates won’t solve the housing affordability issue.

The demand to take action in order to decrease mortgage interest rates will be on the rise, in order to help new Boston condo for sale buyers, however, nobody seems to consider that the true issue lies in the disparity between what Boston condominium owners originally paid coupled with their 3 or 4% interest rates, with the current prices – lowering mortgage rates to 6% or even 5% will not resolve this.

In the United States, almost all of the 50 million current mortgages have fixed interest rates, with many being significantly lower at (3% or 4%) than the current market rates. This creates a lack of motivation to sell these properties.

In a recent government study  it stated:

For every additional percentage point that market mortgage rates surpass the initial interest rate, the likelihood of a sale is reduced by 18.1%.

The government study also stated:

Those who locked in low mortgage rates resulted in a decrease of 57% in the number of homes sold with fixed-rate mortgages during the fourth quarter of 2023, and it also prevented approximately 1.33 million sales between the second quarter of 2022 and the fourth quarter of 2023.

The rise in home prices by 5.7%, as a result of supply reduction, overshadowed the direct effect of higher rates, leading to a decrease in prices by 3.3%.

These discoveries emphasize the constraints on mobility caused by mortgage rate lock-in, leading individuals to reside in homes they may not necessarily prefer. Additionally, this situation contributes to inflated prices and exacerbates the challenges associated with affordability. Borrower groups who have limited wealth accumulation face increased difficulty in strategically timing their sales, thus exacerbating inequality.

I’m going to be careful how I word this.

The possible consequences of the 3-4% low lock-in mortgages in the Boston condo for sale market encompass:

(1) the avoidance of downsizing, wherein younger, expanding families continue to reside in homes that become inadequate in size, while empty-nesters persist in residing in homes that have become excessively large for them

As a result, this hinders the establishment of new households and disrupts various family dynamics.

as well as

The decrease in the number of available Boston condos for sale has a detrimental effect on housing affordability by reducing the supply, leading to an increase in home prices.

Furthermore, the impact of decreased housing affordability is more keenly experienced by individuals purchasing a home for the first time, minority groups, and borrowers with lower incomes.

Source:  A recent government study

Click here to view Google Ford Realty Reviews

Beacon Hill Condos for Sale

Ford Realty Inc., Charles Street, Beacon Hill

Click Here to view: Google Ford Realty Inc Reviews

Where is Ford Realty Located?

Ford Realty is located in 137 Charles Street in Beacon Hill

Byline – John Ford – Boston Seaport Condo Broker.

 

Call Now