Okay, I went a little crazy today on my downtown Boston Real Estate predictions of 2021. But why stop now. Here are my most recent thoughts. What caused the roaring 1920s? Answer the end of the Spanish Flu. The roaring 20’s lead to the Great Depression. Okay, I’m getting ahead of myself.
Are we heading into the roaring 20″s – not the 1920s but 2020s and beyond?
Please don’t stop reading, let’s review the Boston real estate and economic markets.
Lack of Real Estate Inventory:
Our recent history of fewer homes for sale is likely to continue especially in the Boston suburb real estate market. It’s not getting easier to move – and most will say it’s harder than ever to sell your downtown Boston real estate high rise condo and buy another one around here (you need to leave town to really make it worth it). If would-be sellers get discouraged and decide to pack it in instead, the frenzy will get whipped up but not sustain without a continuous flow of product. A real frenzy needs momentum, which will be more detectible if we have 10% to 20% more homes come on the market as I predict.
It’s unlikely the Fed will do much, if anything, for the next 1-2 years. But all we need is for rates to get back up into the mid-3s and buyers are going to cool off quickly. They already don’t like these prices, and they will insist that any rise in rates should be accompanied by lower prices – and they will at least pause for days or weeks to see what happens to the Boston Seaport condo for sale market or any downtown Boston neighborhood.
The most-likely deterrent to a frenzy will be the jubilant over-confidence of Boston condo sellers who aren’t happy enough to have picked up ANOTHER 5% to 10% appreciation in 2020 – and insist on packing another big lick on top of that.
There will come a point where some Boston condo buyers will give up.
Just because we had a frenzy in the past, doesn’t mean it will continue. It’s always different players every year.
Those who value a great vacation probably skipped one this year, so they will make up for it this summer. Cape Cod will see an increase in Boston real estate prices.
As the threat of Covid-19 diminishes, so do the reasons for moving:
For those who were moving to improve their pandemic environment to the Boston Suburbs, will they still need to move once the pandemic goes away? Perhaps they will want to move back to the downtown Boston real estate market?
The potential 2021 home sellers would be smart to get a jump on it and sell in February or March, just in case the frenzy turns into a glut. You might leave a couple of bucks on the table if the market around you evolves perfectly and nobody else lists their home for sale. But if a few neighbors trying to get out right when you do, the competition could turn into a price war (it’s a fine line).