Wednesday, January 25, 2017

2017 Condo Price Forecast for Boston

In 2014, we took a critical gaze at a Wall Street Journal article that stated the average cost of operating a condo building has increased by 25% over the last decade.

3 years later in 2017, we are ready to reassess the Boston housing market to give you the most up to date forecasts for condo sales.

By scouring reputable sources of analyses on the Boston housing market, this article summarizes a forecast of what can be expected in the 2017 Boston Housing market.

Notable Changes in Condo Prices in 2016

2016 was a big year for change and action. A new president was elected and the Boston real estate market continued to grow with the opening of the Millenium Tower. These and many other factors will affect our forecasted prediction for the Boston Housing Market in 2017.

Condo Prices Still on the Rise in Boston

Overall, 2016 saw a large rise in condo prices. "The condominium market experienced increased sales, as 11,142 units were sold, a 4.7 percent increase on the 2015 total of 10,643," reports The Greater Boston Association of Realtors (GBAR). This report summarized that "the condo market median sales price rose 7.8 percent in 2016."

The Millenium Tower is Opened for Residency

Another important event for the condo market was that the Millenium Tower was opened for residency. A record was broken for condo sales when the penthouse condo sold for $33 million dollars! In October of 2016, this caused condo prices to reach an all-time high.

Housing Developments Continued to Open

In 2014, we mentioned that developments would continue to create a diversity of options, not just for inner-city housing purchases, but also for the suburbs. 2017 will see a great increase in housing developments in Boston which could potentially cause condo prices to go down later in the year.

What causes condo prices to rise?

Even without the opening of the Millenium Tower, condo prices would still continue to rise. Many complex factors affect the growing prices of condos but more than anything, condo owners are continuing to upgrade their facilities to increase their return on investment.

As condo amenities become more luxurious and modern, it is unlikely that we will see a significant decline in condo prices anytime soon. 

Here are some common upgrades to condos that have really rack up the price (good to consider if you are ready to sell your condo for a return on investment): 
  • Adding tennis courts, gyms, and swimming pools significantly increase the maintenance.
  • Added amenities require concierge and security personnel.
  • Rising property taxes are also a driving factor in most areas (including Boston).
Also important to remember is that not all condo fees are equal! Fees vary depending on the condominium's amenities, the age of the building, the number of units as well as the size of the resident's unit. 

A Tentative 2017 Condo Forecast

Several sources warn that prices could decline mid-2017, as the quantity of condo listings increases in the spring. So what does this mean? Simply put:

Sell now while the prices are high. Wait until the listings drop in the Spring to buy.

As some analysts suspect, the price rises of Boston condos in the winter could be mainly due to the limited listings. The supply and demand of economics also applies to condos. In this case, if there are less listings, there is less competition, so sellers are able to charge more than normal.

Forecasting a Good Year for the Housing Market 2017

According to sources, the US housing market as a whole is looking up in 2017. If you aren't sure why you should be hopeful, consider these reasons that 2017 could be a potentially good year for the housing market:
  1. A new president could indicate a trend towards government deregulation.
  2. Mortgage rates are rising steadily, but not too steadily.
  3. For most cities in the US, there is a lowered risk of a housing crash.
  4. Millenials! Remember them? They are reaching their optimal home-purchasing age.

Today the average cost of a condo in Boston can range anywhere from $370,000 to 3 million. 
As a property management company in Boston with 100's of buildings under management, Premier Property Solutions looks forward to a successful year with many changes in management. 

Give Us Your Opinion

As experts predict an upswing in condo prices in 2017 across Boston, does this mean this is the right time for condo owners to sell? Should a prospective condominium buyer wait until the spring to purchase for a lower price once the listings increase?

Tell us what you think!

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