What’s the future outlook for the downtown Boston real estate market?
Nothing new, the Boston condo for sale market goes in cycles and you just need to know how to handle this particular one. I fortunately have some tips for buyers and sellers that I hope will help everyone navigate the market successfully:
Stay the course and focus on what you can afford under the higher interest rates. It’s likely your purchasing power will not be as strong as was earlier this year. But there will definitely be room to move on pricing in summer and Fall. Yes, there will be sellers who won’t sell unless they can get a certain price. But you want the ones who will sell for what the market will bear. Don’t be afraid to include a contingency or two, because you may end up being the only offer and it’s always nice to have a safety net. There will be some good deals in your future, so don’t miss out because you’re sitting on the sidelines or trying to time the market.
Make sure your property stands out with the proper prep work, and get those buyers to the open houses with a high-quality online presence. This is not the time to try to save money by skipping the painting, cleaning, refinishing floors, and staging. Buyers will be more critical and you will want to give them a reason to make an offer on your property. Be realistic on price and recognize that sales which occurred earlier in the year closed when interest rates were considerably lower. The list-low, sell-for-more strategy may not work in many cases, so you might want to price your home right around where it should sell. Be prepared to have a longer days on market, particularly if there’s a lot of inventory in your price range. You need that one qualified buyer, so set yourself up to compete against other similar properties.
Updated: Boston Real Estate Blog 2022
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Barbara Corcoran, founder of Corcoran Group and star of ABC’s Shark Tank spoke with Yahoo Finance’s Akiko Fujita and Zack Guzman about the outlook for the real estate market, including investment opportunities and price increases going into 2022.
After an insanely unpredictable real estate market in 2020, what will 2021 Spring and Summer market hold for us?
My humble downtown Boston real estate predictions
Mortgage rates in 2021 will stay around 3% (and under) will continue through at least the first half of next year.
But I don’t think it will last throughout 2021 as I see a pick-up in that bad word inflation
Do we have pent-up supply waiting to burst onto the market?
Here are my categories where I think we will see movement in the downtown Boston real estate market.
1. Move-Uppers – Covid-19 slowed this downtown Boston real estate category to a halt. It will resume in 2021.
2. Baby Boomers – A survey said that half of the seniors delayed listing their homes in 2020 due to Covid-19.
3. Work From Home – This trend will continue well after we all have our vaccine.
4. Forbearances – Lenders will be lenient, but some in default will tap their equity, rather than risk losing it. We will see an uptick in Boston condo refi’s
5. Divorce Rate is Up 34% – Technically, this could be because of COVID. As a result, add more Boston condo sellers AND buyers into the downtown Boston real estate market, but realistically some of those coming out of a divorce will be more likely to rent first before buying a Boston condo for sale
6. Unemployment – Older homeowners will grapple with taking a pay cut or quitting the job search altogether – and retiring earlier than expected won’t seem so bad when their home’s equity has never been so high. More boomer moves that would have happened in 2022-2025 will be pulled forward.
7. Eviction Ban – In the second and third quarter of 2020, there were 11% of renters missed a payment. Mom and pop landlords will begrudgingly sell and pay the capital-gains tax, rather than risk another episode like this one.
10. Capital-gains tax. – From the WSJ: Biden will raise the tax on the capital gains of high earners to the same rate as wage income, increasing the rate to 43.4% (39.6% plus Medicare 3.8% investment tax) from 23.8%. Mr. Biden on Thursday estimated that these increases on high earners would raise $92 billion, but that’s before they put their tax lawyers to work. Biden has also said he will eliminate the 1031 exchanges, but all of the above will need Congressional approval. Just the thought could cause landlords to hurry up their plans of selling.
As we get closer to 2021, real estate experts have noticed a number of markets across the country experiencing a gradual shift. For the longest time, the US housing market has been a strong seller’s market. However, property investors are now seeing slower home-price growth and more inventory in many cities, meaning things are starting to even out. This holds true even in the downtown Boston real estate market
After six years of tilting toward a seller’s market, the Back Bay and Beacon Hill real estate market is now moving closer to “neutral” territory. So, while it’s definitely not a buyer’s market yet, major market trends show that Boston Midtown and Seaport condo buyers have a chance of making better deals.
Inventory in Beacon Hill condos started picking up throughout 2019. This is not a perfect balance (healthy markets have six months of inventory), but it’s on the upswing. However, demand for Boston condos for sale for entry-level buyers, on the other hand, has not been keeping pace as a result of changing and increasing demographics
Due to the supply and demand in the Boston condo market, home prices are still rising but at a slower rate, despite that, we might be heading into a recession.
Among the nation’s fastest-growing metros, downtown Boston is attracting newcomers from all around the country. This city is attractive to people mainly due to its strong job market and labor participation.
Employment growth in downtown Boston has been exceptional over the last 10 years. In addition, the projected 2020 employment growth rate in downtown Boston is expected to be well above the national growth rate. The Back Bay, Beacon Hill, and Boston Midtown condo owners who rent are certainly benefiting from these fundamental demographic and economic shifts.
The ability to attract qualified workers is driving the population growth which, in turn, is increasing the demand for Beacon Hill apartments. Looking at the breakdown of the population, it seems that Beacon Hill has a higher percentage of its population under the age of 40. This points to the attractiveness of the Beacon Hill real estate market to younger residents who are increasing the demand for rental properties of all types.
Downtown Boston Real Estate Home Prices
Recent market trends in the downtown Boston real estate market suggest that home prices could rise more slowly in 2020 than they did last year. While downtown Boston’s economy has been strong and the population has been growing, the demand for more affordable Beacon Hill condos for sale has not kept pace. As we said, this is the result of the city’s changing demographics – many of Boston’s new residents are millennials who either can’t afford to buy a Back Bay condo for sale or simply prefer to rent one.
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