The shifting of the Boston condo market
Boston condo sellers saw condominiums flying off the market in downtown Boston as recently as a month ago. Now, as some prepare to list their own condo for sale, some Boston condo sellers are on the edge.
Mortgage rates, property taxes, and homeowners insurance and inflation are all on the rise, and many interested Boston condo for sale buyers are dropping out of the market. On real estate sites like Zillow , notes homes are spending more time on the market and sellers are dropping their asking price, which hasn’t been seen in downtown Boston in a long time.
Across the country, agents report working with people who are increasingly unnerved by the prospect of selling a home. Mortgage rates have increased at a historic pace this year, making buying a Boston condo for sale even more expensive. Boston condo buyers are already pinched by high prices.
The increase in borrowing costs has reduced buyers purchasing power in a matter of months. The rate on a 30-year mortgage earlier this month increased to nearly 6% from about 3% at the end of last year. At 6%, a buyer on a $2,500 monthly budget could afford an approximately $400,000 Boston condo—down from $517,500 condo at the end of 2021, according to Redfin .
That has caused some buyers to call off their Boston condo for sale search. In recent weeks, the volume of applications for a loan to purchase a home, as measured by the rolling 4-week average, fell to its lowest levels since the pandemic’s early days, according to Mortgage Bankers Association data. And existing-home sales have fallen, too, declining in May to their lowest level since June 2020, according to the National Association of Realtors.
Boston condo buyers have more choices now, too. The number of active and new listings has increased on a year-over-year basis recently, according to Realtor.com’s gauge.
These shifts aren’t sitting well with Boston Beacon Hill condo sellers seeking top-dollar for their homes. And the cool-down has led some sellers to slash listing prices. While listing prices nationally are still well above year-ago levels, according to Realtor.com data, a record share of home listings saw a price cut last week, according to brokerage Redfin.
Updated: Boston Real Estate Blog 2022
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If you are either a buyer or seller (or both), you need to know what it will mean to your family if you go ahead with the move. You need to understand three things:
1. What is happening in the housing market right now?
Consumers must get past those fear-mongering headlines and gain a deep understanding of what is truly happening. How strong is buyer demand right now? How much competition do listings have today compared to what they will have in the spring? People want to make an educated decision on what is probably their family’s greatest financial asset.
2. Why is it happening?
Understanding the individual pieces that impact the sale or purchase of Boston condos is important. Understanding how those pieces impact each other is critical. How does the amount of a down payment impact the mortgage rate a buyer will be offered? Can you still price your Boston Midtown condo for sale a ‘little ahead’ of the market and still be sure it will sell?
3. How do the first two affect your local market?
Basically, you want an understanding of the overall Boston downtown housing market and a simple and effective explanation of how it will impact your personal real estate goals.
The best way to get all three is to work with a professional downtown Boston condo broker who understands this shifting real estate market and can expertly guide you on the journey to reach your housing goals. Let’s get together to discuss what today’s market means for you.