The good news thus far is that the Boston condo market looks strong. But we have some ominous clouds in the horizon. Take for example, overall homes sales nationally are down 3.8% this year. Interest rates went from 4.3% in January 2018 to 4.64% as of March 6, 2018, and that’s a rise in a really short period of time. We haven’t seen interest rates this high since 2012. In 2012 Boston condo prices were about 40% lower on average.
With interest rates up, prices up, something has to give. In the last year home sales are down as follows:
- Northeast -12.8%
- Midwest -4.1%
- South -1.1%
- West -2.5%
- Overall home sales down 3.8%
Conclusion: With interest rates pushing 5% and with mortgage origination on a downward slide, Boston condo sales prices will eventually come down. I’m not trying to be an alarmist nor are we going to see a “bubble crash.” Boston condo prices will likely will move very slowly downward because homeowners are looking at a robust economy right now and they are having a hard time reconciling lower home values with the current economy. This in return will prolong home values from coming down in the near future.
Who are today’s Boston condo buyers? And how are they finding the Boston condos they purchase? According to the National Association of Realtors, survey of homebuyers:
- 51% found the Boston condo they wanted to buy in the internet.
- 34% fond their home via Boston real estate agent.
- 8% social media and street signs
- 4% friend
- 2% Boston condo builder
- 1% directly from the seller
- 1% printed newspaper