I am monitoring the facts regarding the coronavirus impact on the Boston real estate market, and for the time being we are encouraging our clients to stay the course. Interest rates are extremely low which makes downtown Boston condo purchasing extremely attractive. Additionally, our inventory levels remain low which means (if this continues) that buyers have limited options, ultimately leading to competition for homes that drives prices upwards.
My team and I are committed to staying focused during these difficult times. In past times of financial hardship, real estate has carried the economy. Real estate has always been considered a safe investment asset. And if real estate has the ability to help sustain our economy, then we’ll be here to help keep that engine going.
If you have questions about the market or just want to talk, the team is here to help! We’ll continue guiding our clients to make smart decisions about real estate, and we intend to do just that. So over the next weeks, count on us to focus on maintaining good health, washing our hands, and staying busy!
You have probably heard the rumblings about the Boston Downtown and Boston Midtown condo market and its future. Will the Boston downtown real estate bubble pop? Will the Boston real estate market crash? These are excellent questions and I perform extensive research each year to help answer them.
No. The local and national economy is still roaring. Boston condo prices went up to fast for too long, have dropped in some areas of Massachusetts in 2018, and will likely drop slightly in some area of Boston in 2019. However, local wages are starting to rise. While Boston Midtown real estate prices are likely to be stable or slightly deflate for a few years, it may not take long (2-4 years of price drops) before the increasing local wages catch up and Boston Beacon Hill condo sales start hopping again. You cannot have both a strong local economy and increasing wages and a housing bubble crash at the same time. What about interest rates? Mortgage interest rates have risen to about 5% for 30 year fixed loans, which historically is not bad, but now the national real estate market is slowing, dropping across the board from coast to coast. It is very unlikely the Feds will continue to raise rates in a significant way while so some Boston condo drops out of the market.
A huge part of the reason Boston Downtown condo prices got so high is out of state buyers coming in who could afford inflated Downtown real estate prices (and continued to push them higher). The local Boston residents population struggled to buy Boston Beacon Hill condos because while the local economy recovered from the 2008 recession, local wages have only recently started to increase. For years as the economy improved, from 2013 to 2016, Boston was one of the fastest-growing cities in the country.
Okay, I said above that, You cannot have both a strong local economy and increasing wages and a housing bubble crash at the same time, but I suppose it might still be possible to have a real estate market crash if we had an overabundance of housing inventory for sale. Now, while inventory is rising significantly in the Boston Downtown area metro prices should begin to stabilize in 2020.
Once again, home prices have simply been driven too high too fast. It has also been due to a strange phenomenon the National Association of Realtors research discovered after the 2008 recession. For whatever reason, your average home buyer lived in a property for about 5 years prior to the recession. Now the average homeowner is living in their property for an average of 10 years. This is a huge change in a very short time frame. Also, new construction never picked up in Boston Beacon Hill. So for a long time, we had homes not coming up for sale because people did not want to move anymore, we had a massive population boom, and we had relatively few new homes for sale on the market. You can see why real estate prices went wild in Boston. So with the population boom over and slightly increased mortgage rates, there is nothing left to keep driving prices up and up.
It will be a buyer’s market in Boston by 2020 or 21 (latest).
The best time to buy a Boston condo is when the market is down. This should be obvious but historically buyers purchase when the market is up and do not purchase when the real estate market is down. This is the opposite of what buyers should be doing or preparing for. If you are not a homeowner right now, start saving up, the perfect opportunity is coming your way shortly. If you are a homeowner, guess when would be the perfect time to buy that investment property or vacation home? Because the local economy is strong and because Boston wages are rising and because new home construction is slow – this cooling of the Boston Midtown real estate market will not likely last more than a few years! Get ready to buy and then when the market bounces back up – you will be in a fantastic position.
Whenever the real estate market drops in Beacon Hill, condos, townhomes, and luxury homes are the first to drop their prices and end up being the hardest hit segments. All of these types of properties recover just fine along with the rest of the real estate market, so you could see the greatest investment opportunity (and the biggest price drops) in these areas. Of course, if you own one of these types of properties, you may want to hold onto them until the Boston Downtown housing market recovers or sell them fast.
The seasonal real estate market impact in Boston is as strong a factor as the overall real estate market impact in Boston What I mean is this, there is always the best month of the year to buy and the best month of the year to sell, regardless of whether or not it is an overall up or down year.
Since there is no Boston condo bubble popping, no Downtown Boston real estate market crash coming, the financial advantages of homeownership vastly outweigh the positives of renting. You have to buy and sell the market, but an experienced local real estate agent can help you do just that. If I can be of service, just ask.
The property listing data and information set forth herein were provided to MLS Property Information Network, Inc. from third party sources, including sellers, lessors and public records, and were compiled by MLS Property Information Network, Inc. The property listing data and information are for the personal, non commercial use of consumers having a good faith interest in purchasing or leasing listed properties of the type displayed to them and may not be used for any purpose other than to identify prospective properties which such consumers may have a good faith interest in purchasing or leasing. MLS Property Information Network, Inc. and its subscribers disclaim any and all representations and warranties as to the accuracy of the property listing data and information set forth herein.
Click here to view: Boston Midtown condo sales stats
Click here back to Boston Real Estate Home Search
Ford Realty – Boston Real Estate Google Reviews 2019 and 2020