Will the Boston Housing Market Continue Booming This Spring?

Spring has finally arrived and many are wondering what it will bring for the Boston housing market. Despite the pandemic continuing on, it’s certain to be very different from the spring we experienced at this time last year. Here’s what some top industry experts predict for the Boston housing market this spring. 

 

1.    New Inventory Growth 

Many experts are predicting a rise in available industry. Danielle Hale, chief economist from Realtor.com has stated: “Despite early weakness, we expect to see new listings grow in March and April as they traditionally do heading into spring, and last year’s extraordinarily low new listings comparison point will mean year over year gains. One other potential bright spot for would-be homebuyers, new construction, which has risen at a year over year pace of 20% or more for the last few months, will provide additional for-sale inventory relief.”

 

Also, chief economist of Zonda, Ari Wolf, stated: “Some people will feel comfortable listing their home    during the first half of 2021. Others will want to wait until the vaccines are widely distributed. This suggests more inventory will be for sale in late 2021 and into the spring selling season in 2022.”

  

2. Price Increase 

Median listing prices grew at 12.9 percent over last year, notching the 27th consecutive week of double-digit price growth, easily double the rate we would see in a more normal housing environment. With home shoppers active and sellers still lacking, this upward pressure on prices is likely to remain. Still low mortgage rates in 2021 have helped offset the pain of higher prices, but mortgage rates are expected to rise later in the year, thus affordability is likely to become a top consideration for buyers.

3.    Overall Strong Sales Season

Overall, the experts are predicting a strong sales season. Mark Fleming, chief economist of First American, stated ““As the housing market heads into the spring home buying season, the ongoing supply and demand imbalance all but assures more house price growth...Many find it hard to believe, but housing is actually undervalued in most markets and the gap between house-buying power and sale prices indicates there’s room for further house price growth in the months to come.”

Massachusetts Real Estate Sales in January Boom, Breaking Records

The growing real estate market that bloomed late last spring has shown no sign of weakness, and continued thriving with strength throughout the cold winter. 

According to real estate metrics firm The Warren Group, there were 3,824 single-family home sales across Massachusetts in January. This reflected an 8.7 increase over a year ago, and the most January sales in over 20 years. The median price of a Massachusetts single-family, increased 12.7 percent over a year ago, from $398,700 to $445,000, a new all-time high for January.

 

Furthermore, this marked the sixth straight month where Massachusetts boasted double-digit increases in median prices. Despite high unemployment rates and the raging pandemic, the real estate market continues to thrive and grow with remarkable and powerful strength. 

 

Also, lower interest rates provide homebuyers with more buying power, further fueling the market. 

 

Meanwhile, the 1,686 condo sales statewide marked a 10.3 percent jump over January 2020. And while median condo prices inched up just 0.3 percent year over year, from $399,000 to $400,000, that still marked an all-time high for January.

 

In Suffolk County, which includes Boston, the median price of a condo dropped 5.9 percent, from $679,000 to $638,750. Also, the average price of a downtown Boston condo fell noticeably, 30.9 percent year over year, from $1,286,625 to $889,100. 

 

Condo sales soared 28 percent in Middlesex County in January, however the median condo price slipped 5.6 percent compared to a year prior. Furthermore, condo prices in Cambridge and Somerville plunged 9.3 percent and 16.9 percent, contrasted with January 2020.

 

The increased sales volume is coming during a time where inventory is tight; single-family inventory hit record lows in January.  

Where in Boston Should You Live? Main Factors To Consider

1.    Your Commute 

 

The first factor to take into consideration when choosing which neighborhood to live in Boston is your commute to work or school. Wasting time with a long commute isn’t ideal, so often your commute time will be a defining factor in choosing the right neighborhood. When evaluating your commute time, it is important to factor in fuel and/or possibly toll expenses. Some Boston neighborhoods only require a resident sticker which is fairly easy to obtain, while other Boston neighborhoods do not offer any parking. This means you may need to rent a parking space, which can be extremely expensive. If you plan to use public transportation in order to commute then you need to factor in the monthly cost of that as well. You also need to consider how close the apartment is to the T station or bus stop

 

 

2.    Amenities and Features 

 

Another defining factor will be the amenities and features you are searching for. Make sure you figure which amenities are dealbreakers and which are simply luxuries you would prefer. This is highly important, because you don’t want to end up regretting the apartment you chose because it doesn’t have your highest regarded features. Therefore, knowing your priorities and what you value most is key. That being said, working with a professional real estate agent who specializes in the Boston rental market will significantly increase your chances of finding the right apartment which fully satisfies you. 

 

3.    Budget

 

Figuring out your budget is extremely important when deciding which neighborhood would be a best fit. Also if you are working with a tight budget it is extremely important that you deicide which priorities are valued more. For example, is it more important you are in the exact location you want, or that you have a brand new and modern apartment? If you have a tight budget and living in Back Bay is your ultimate goal, then you may have to live in an older unit to fit your price point.

 

Overall, moving to Boston can be a stressful but incredibly rewarding experience. The city has so much to offer in terms of entertainment, historic beauty, and rich experiences. When you work with Premier Property Solutions, our team of agents will provide exclusive apartment listings and are exceptionally familiar with the properties throughout Boston. Contact us today if you are ready to find your dream apartment in Boston and make it a reality!

 

 

As The Pandemic's End Approaches, Experts Offer Predictions for Mass. Housing Markets in 2021

Although 2020 was full of dark and unprecedented times, the real estate market continued to thrive and boom. The flourishing housing market was one glimmer of hope in an otherwise struggling economy. Now with emerging COVID-19 vaccines, a path out of this painful pandemic is approaching. Many are wondering, what will a return to normalcy mean for the housing market in 2021?
 
Housing economists are predicting another big year for real estate. The chief economist at Redfin, Daryl Fairweather, predicts 2021’s real estate market will be ever stronger than 2020. “As the economy recovers, as the vaccines get the virus under control, people will be back at work, and people who have delayed selling this year will be ready to sell,’’ Fairweather stated. Fairweather also believes the interest rates may slightly tick up but stay historically low, which makes buying a home more affordable. 

Low mortgage rates are one of two reasons experts anticipate continued price growth in 2021; most economists expect rates on a 30-year fixed-rate mortgage to average just over 3 percent. The other reason is: supply and demand. There still simply aren’t enough houses available for everybody who wants one. 
 
Homes are selling incredibly quickly, nearly 2 weeks faster than last year, because the market is so starved for inventory. Daniele Hale, the chief economist from Realtor.com, expects the housing market to ride its current momentum through next year, with home prices climbing 5.7 percent in 2021, both nationally and in the Boston area. Hale forecasts sales volume to increase 7 percent overall and 5.4 percent in Boston. She also predicts a return to “seasonality,’’ with strong spring and summer buying seasons and a wind down in the fall and winter. Boston, specifically, continues to experience a vast shortage of inventory. 
 

The lack of new listings put a lid on home sales this year, Fairweather states, and continued to drastically push up prices. However, as the pandemic comes to an end, and buyers and sellers start feeling more confident about their future, and thus more comfortable with listing their home for sale or making a purchase, Fairweather predicts home sales will jump 10 percent in 2021, and price growth will slow somewhat, to a little less than 5 percent. 
 
As more inventory hits the market in the second half of 2021 however, it still won’t be enough to satisfy buyer demand. There will definitely be an unrelenting demand for homes and another seller’s market next year. 
 
As it did this year, that buyer demand will likely continue to center on larger homes with offices and outdoor space. 
 
Furthermore, once people feel confident that life will return to normal, Fairweather expects buyers to return to cities like Boston — if not for the jobs, then for the lifestyle.  “Boston isn’t just about office buildings; it’s also a place where people go on vacation. It’s a college town. There’s a lot to offer besides office buildings, so if office workers don’t come back, I don’t think that’s the end of Boston,’’ she said. “Young professionals and college students are going to want to live in a place that has nightlife and bars and restaurants.’’
 
Boston ranked among the 10 hottest markets in Urban Land Institute’s 2021 Emerging Trends in Real Estate report. “The industry is pretty bullish about Boston as sort of staying a top-tier city.’’
 
With a competitive market expected in 2021, agents said it’s essential for buyers to prepare. That means researching home values, canvassing what’s available, connecting with a local agent, and getting preapproved by a lender so you can act quickly. When you have something that works for you, you have to be ready and well-prepared to place a strong offer.