Zillow: Boston condo values

Boston Condos for Sale and Apartment Rentals

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While the housing market may be hotter than usual, the shift toward seasonal norms is starting to show and could benefit both buyers and renters.

The housing market may be hotter than usual, but October saw a shift toward seasonal norms, including declining list prices, listings staying on the market longer and more homes going through price cuts before selling, according to a new report from Zillow.

New data indicates the market may be returning to seasonality trends that didn’t materialize last year. According to the report, today’s buyers can expect less competition, giving them more time to decide on a home as sellers are becoming more willing to negotiate.

Nationally, home-value appreciations eased for the third month in a row, as records were set for annual growth at 19.2%, more than $50,000 from last year. Rents also relaxed in October, as they fell month over month in eight of the country’s largest metros, according to the report.

Boston’s typical home value rose 15.5%, compared to October 2020, to $605,224, while home-value appreciation slowed compared to September. Rents increased 11.9% from a year ago to $2,517. The median time on market for a listing was eight days, the same as September. The report also found the share of homes with a price cut in October was 13.1% compared to 12.3% in September.

“Home buyers shopping this fall shouldn’t expect the same frenzied demand that triggered bidding wars on listings this spring and summer,” Zillow senior economist Jeff Tucker said in a press release. “The normal seasonal slowdown of autumn has returned, when many families are busy with back-to-school activities and planning for the holidays. Buyers can expect less competition, meaning more time to decide on a house and the potential for prices to fall on listings they’ve saved on Zillow.”

Boston Condos for Sale and Apartment Rentals

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Boston Condos for Sale 

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As we enter the final months of 2020 and continue to work through the challenges this year has brought, some of us wonder what impact continued economic uncertainty could have on downtown Boston real estate prices. Looking at the big picture, the rules of supply and demand will give us the clearest idea of what is to come.

Due to the lack of Boston condos for sale on the market today, there’s upward pressure on prices. Consider simple economics: when there is a high demand for an item and a low supply of it, consumers are willing to pay more for that item. That’s what’s happening in today’s Boston real estate market. The housing supply shortage is also resulting in bidding wars in the Boston suburbs, I know one Beacon Hill condo owner looking to buy a home in Wellesley. MA. who is constantly in bidding wars to buy a home.

Real estate values

Real estate values

There’s no evidence that buyer demand will wane. As a result, experts project price appreciation will continue over the next twelve months. Here’s a graph of the major forecasts released in the last 60 days:

I hear many foreclosures might be coming to the market soon. Won’t that drive prices down?

Some are concerned that homeowners who entered a mortgage forbearance plan might face foreclosure once their plan ends. However, when you analyze the data on those in forbearance, it’s clear the actual level of risk is quite low.

Ivy Zelman, CEO of Zelman & Associates and a highly-regarded expert in housing and housing-related industries, was very firm in a podcast last week:

“The likelihood of us having a foreclosure crisis again is about zero percent.”

With demand high, supply low, and little risk of a foreclosure crisis, home prices will continue to appreciate.

Boston Real Estate and the Bottom Line

Originally, many thought home prices would depreciate in 2020 due to the economic slowdown from the coronavirus. Instead, prices appreciated substantially. Over the next year, we will likely see home values rise even higher given the continued lack of inventory of homes for sale.

Boston Condos for Sale 

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Updated: Boston real estate blog 2021