Source: Boston Real Estate Market Trends
COVID-19 dealt a devastating blow to businesses across the U.S., resulting in many people losing jobs. However, the Boston real estate market is a thriving and robust seller’s market. With a positive employment outlook and shrinking supply, it is no wonder that Boston is a hot seller’s market. Buyers shouldn’t shy away from the Boston real estate market’s competitive nature because a Boston property is an ideal investment almost guaranteed to increase in appreciation.
As a starting point, let’s quickly examine the overall U.S. real estate market.
The U.S. Market
As Americans focused on the 2020 elections in November, the Housing Market Recovery Index declined to 108.0 in the U.S. (November 7, 2020), according to a recent report by Realtor.com. That is down 1.4 points from the prior week. The starting point for the housing index is 100, so it was up quite a bit before the pandemic hit the U.S. The index declined from there until May, when it began going up once again. As of early November 2020, the housing recovery index is 8 points above the pre-COVID baseline, a good sign for the real estate market nationwide.
The demand-supply imbalance will continue into 2021 nationwide even though the housing demand index has trickled down as of late. However, the rate of increase is predicted to slow before spring 2021.
However, Boston has a far more robust real estate market than its national counterparts.
Boston Real Estate Market
New jobs attract many to Boston each year. Higher wages, new jobs, culture, dining, recreation, and the high number of universities attract many to this hot housing market. Too many. Yes, the supply and demand imbalance is prominent here, with the supply being meager and the demand higher than ever among home buyers and tenants.
Strong Demand and Expected Increase in Appreciation
The limited inventory and growth restrictions guarantee higher appreciation of properties in Boston. Boston home prices are expected to increase by 6-8% in 2021. The increase is no surprise because there has been a steady increase in Boston property appreciation since the housing crash of 2008. So, expect to see a steady rise in property prices.
According to the Greater Boston Real Estate Board’s Boston Area Market Report, the median sold price for a single-family home in Boston is $700,000 and $575,000 for condominiums. The median sold price is up 18.0 % from the previous month for single-family homes and up 9.3% for condominiums.
According to the Greater Boston Area REALTOR®‘s October 2020 Market Monitor (GBAR) report,1,433 single-family homes sold and 949 condominiums sold. As far as active listings go, there are 2,061 single-family homes on the market and 3,448 condominiums.
The typical time on the market for a listing is almost the same day due to Boston’s inventory. Many are seeing properties go contingent practically immediately.
Properties in downtown Boston are significantly affected by the Boston shadow law, which limits building height. Many would-be high-rise apartment buildings and condo towers most likely will be affected by this.
Boston Rental Market on the Upswing Despite Softening
Boston is a bullish rental market, with 51% of Boston households being renter-occupied, according to RENTCafe. According to Realtor.com’s housing forecast report, the average rent for a Boston apartment is $2,787. A 10.76% decrease from last year ($3,087). It has gradually decreased in the previous few months, most likely due to the pandemic’s effects.
Boston’s rental market includes the many colleges and universities in the area, with more than 150,000 college students in Boston and Cambridge. The Boston, real estate market offers excellent investment opportunities, especially since Boston is far more landlord-friendly than other markets in the U.S.
Conclusion
The Boston real estate market is in a bullish cycle despite the pandemics dragging effects. Buyer competition is fierce, but the high prices may lure more sellers into the market, thus, prompting an inventory rebound. So there are still many great buying and selling opportunities for Boston in 2021.
Please contact me at 617-784-8635 to discuss your move to Boston. Boston Bayside Properties has years of experience specializing in Boston Real Estate.
