Ever since COVID hit the U.S. economy and Boston condo for sale market they have both been acting strange. Confusion and concern often lead the way. But despite the ups and downs over the last couple of years, the Boston real estate market has continued to maintain strong demand as inventory has remained low (even historically so) and prices have skyrocketed. But what will happen to the Boston condo for sale market in 2022, will the bubble finally burst or will prices continue to rise to unseen heights?
In order to understand the likelihood of a real estate market boom or bust we need to survey the structure of the local economy. There are two foundations with multiple pillars: ability to buy a home (employment, wages, interest rates, affordability) and ability to sell a home (inventory, home equity, population growth or decline, cost).
Wages in the downtown Boston have increased faster in 2021 than in the three years prior.. So home affordability is still strong. That being said, the population in downtown Boston by-in-large is employed and their wages are increasing faster now than in prior years.
Affordability is determined not by housing price alone, but in comparing housing price with local wage averages. Downtown Boston is largely unaffordable compared to smaller metro areas, but also remains more affordable than most larger or similarly sized metro areas in 2021. That being said, its tough for yourng first-time boston condo buyrs to afford to purchase a Boston condo for sale.
Interest rates have an oversized effect on the Boston condo for sale marker for buyers with their ability to afford a new home. Existing homeowners with lower interest rates are also hesitant to sell and obtain a higher rate on their next property. There is little doubt in the real estate industry that mortgage rates will rise in 2022, with most predicting an increase to 4%. This will impact the pocketbook of Boston Condo buyers in the future ability to buy a home.
Most everyone needs steady employment to purchase a home. We all had a scare worse than in 2020 when COVID initially hit, but take a look at the most recent unemployment for 2021 at 4.9% below the national average. We are right back to where we were before COVID hit and many are predicting unemployment in Massahusetts will get even tighter in 2022. So in terms of employment at least, there are no Boston condo for sale market concerns.
Boston Condo Sellers: Ability to Sell a Boston Condo in 2022
The primary reason the Boston condo for sale market has been a sellers market since 2016 is low inventory. Bostron condo Inventory is determined by two primary factors, population growth or decline and constructions rates. Construction rates in Boston have been on the rise for luxury codos but low for first-time stater home
Boston growth continued in 2021, though at a minuscule rate in the city proper.. Despite plenty of bad press, the city continues to grow. Due to hospital and the influx of new college students, Boston is likely to remain a sellers market in 2022.
With double digit price increases for Boston condos for sale in the last few years, and significant price increases going back to at least 2014, there should be no problem for the vast majority of Boston condo for sale owners in downtown Boston to sell if they desired to in 2022.
So based ion the above information I feel the Boston condo for sale market will remain strong through 2021. At least if the local Boston economy stays healthy, looking at the factors that dictate a strong or weak Bosron condo for sale market here. Of course, broader national or worldwide economic effects are beyond our scope. There is no guarantee the real estate market will not crash in 2022, but when we look solely at the local economic forces.
If you’re considering buying or selling a Boston condominium, please contact me at 617-720-5454 or after hours on my cell at 617-595-3712
Is a housing crash around the corner?
Is a housing crash around the corner?
In my last Boston real estate blog post I wrote how inflation may be a good thing for Boston condo owners. In this Boston real estate blog post I’ll provide you with the opposite side of the coin.
US Home Prices are up a record +16% in 2021. Housing inventory is near record lows. Yet Banks and Mortgage Lenders do not appear convinced that the Housing Boom is real. Could a dramatic decline in Mortgage Availability suggest that a Housing Crash is around the corner?
The US Housing Market in 2021 is booming according to almost everyone. Prices are up, inventory is down, and there’s endless demand coming from Boston condos buyers and local real estate investors.
However, mortgage lenders (banks, investors, online lenders) do not appear so bullish. Mortgage Availability has declined significantly over the last year to levels not seen since the last Housing Crash. This means that banks are becoming much more hesitant to lend. And only borrowers with high incomes and credit scores are considered for a Boston condominium loan.
Click Here to view: Google Ford Realty Inc Reviews
Click to View Google Reviews