Boston Real Estate Market Forecast

Boston Real Estate Market Forecast

Boston Housing Market 2020

2019 was another exciting year for the Massachusetts economy and housing market and 2020 had started off very well. Boston’s market reflected markets in New York and Atlanta where prices rose and listings rose suddenly.

Enjoy the housing market report for Boston and Massachusetts below.

 

And while the Corona Virus shutdown is flattening the Boston real estate market in 2020, the forecast is for renewed housing market strength in the second half of the year. How the Corona virus will affect real estate?

Demand for homes is strong, and a good population of wealthy buyers and a fast recuperating economy means demand for homes will return by August. By then, buyers will be more certain of their employment picture.

 

The 2.2 trillion dollar stimulus should be enough to get each state through this short but tough period. Some suggest real estate sales could drop by 35% typically. Will house prices fall in Boston?  March and April’s prices will plummet but not as much as sales. We’ll know the trend in 2 weeks from now.

What will happen after the Corona Virus shutdown? By July, consumer demand will pick up. Interest rates are low and credit is available, and demand from Millennials will not go away. They’re raising families and need a home.

House Sales in Greater Boston

House prices rose month over month in February by 2.5%, and this up 8.3% over February 2019. Sales of homes however fell sharply from January by 29%, and down 7.4% year over year. Year to date, sales are 2.7% over last year.

Greater Boston Home Sales. Chart courtesy of GBAR.

Median home prices rose $14,000 or 8.3% to $619000 from $605,000 in January. That is a 2.5% rise from January.

Greater Boston House Prices. Chart courtesy of GBAR.

Metro Boston home prices last 4 year history.

Active listings jumped by almost 16% from January’s volume, yet that is still down by 14.7% from last February. New listings 49% from January, which was up 16.6% from last February. Days on market fell from 57 to 49 which is a 14% drop. And months of supply dropped by 8.8% YoY to 3.1 days.

Greater Boston Active home listings. Chart courtesy of GBAR.

Greater Boston Pending Home Sales. Chart courtesy of GBAR.

Metro Boston Region

How about Metro Boston communities of Arlington, Belmont, Boston, Brookline, Cambridge, Chelsea, Dedham, Everett, Milton, Newton, Revere, Somerville, Waltham, Watertown, and Winthrop?

These towns saw the median price of a house climb to $745,000 which is up 17.5% from last year and is up 2.8% from January. Number of houses sold dropped 2.5% YoY, and were down 20.2% from last month. Active listings grew 14.9% from January but this is down 4.2% from last February. Pending sales are up 50% from January so there was a flurry of buying what was appearing on the market. Days on market fell 23% from January and that’s down as well, 17% from last year.

In the condo sector, sales were down 15% from last month. Median prices fell 5% from January, but rose $54,000 from last year. Pending sales of condos was very strong, up 55% from last month to 612 units. New condo listings increased 12% and were up 5.4% from January at 1202 units.

City Boston Home Sales

Only 41 single family homes were sold in February which is down 22% from last year, and down 15% from January. Boston house prices grew 14% YoY but were down 1% from last month. Active listings rose from January by 5%, and new listings were up 20%. Pending sales are up 32% compared to last year, and that is up 49% more than January. Days on market shrank to just 44 days leaving the city with only 2.6 months of units available.

City of Boston Condos grew 6% YoY in sales but were down 17.5% from last month. The median selling price of a Boston condo in the city was $664,000 which is up 17.5% up from last February, yet down 5% from January’s price of $700,000. More people put their condo up for sale. New listings rose 14.6% YoY, and 6.4% from last month. DOM remained at last year’s level of 55 units. Pending sales rose 51% from January.

City of Boston house and condo sales February. Chart courtesy of GBAR.

Zillow Boston Market Report

Zillow rates the Boston housing market as cool and perhaps even cooler with the Corona Virus shutdown. Even within that estimate they believe average house prices will rise 4.2% to their assessed average of $662,000.  Only 6.7%of homes in Boston are underwater  (8.2% US Avg) and .8% are delinquent on their mortgage (1.1% US Avg).

Boston Home Price Timeline Chart. Courtesy of Zillow

In South Boston, Zillow expects home prices will only grow 2% this year.

 

Please do share this report on Boston’s housing Market

 

Massachusetts Housing Market Report

Statewide, house sales fell 1% last month, and that was down 7% from last year. Houses for sale fell a whopping 32% while new listings grew 12% compared to February 2019. The median sales price grew 4.2% to $379,000 from last February.

while houses for sale dropped by 9.5%.  Condo sales rose 7.2% while availability rose by 5.6%. Home prices rose 7.7% while condo prices fell 3.1%.

Single Family Homes sales in Massachusetts February 2020

Condo Sales in Massachusetts in February 2020

This chart below courtesy of Realtor.com shows home price growth in Boston’s largest communities.

Town Avg Home Prices Average Home Price 2014 Forecasted Price end of 2018
Newton $895,200 $723,000 $978,000
Cambridge $669,200 $515,000 $746,000
Somerville $559,200 $427,000 $622,000
Boston $504,200 $406,000 $584,000
Quincy $393,600 $330,000 $431,000
Lynn $276,900 $227,000 $335,000
Lowell $240,800 $200,000 $267,000
Brockton $232,600 $186,000 $272,000
Lawrence $218,000 $176,000 $254,000

Take a good look at this heatmap of rental prices, and it might give you a good idea of home prices as well. The further you go from Downtown Boston, the more likely you are to find affordable homes. Be forewarned of Boston’s congested, time consuming commutes to which I can attest are as bad as any.

Boston Home Prices Not all That Severe Compared to California

Compare prices here to cities such as San Diego, San Francisco, and Los Angeles, and buyers might be more at ease with buying in Boston.

Investors might want to review properties outside of Boston city such as Easton, Lawrence, Worcester, Lynn, Salem, Stoughton, Framingham, Brockton, and Dedham. They’re nice communities and there’s plenty of property to build on.

However, it looks as though home prices are about to rise in Boston. So the questions: “should I buy a house?” or “should I sell my house” in Boston aren’t easy to answer. To help with a sell decision, see the post on selling tips and on best renovation for ROI.

What Supports the Boston area Economy?

Boston has a strong regional economy bolstered by transportation, tourism, financial services, and increasingly venture capital. Boston is becoming the Silicon Valley of the north with major influx of funding for startups in FinTech, MedTech and EduTech. Ultimately, all decisions to buy a home in Boston relate back to the US economy, US housing market, and the Massachusetts economy.

Forecast For Boston GDP

Chart courtesy of Open Source Graph

Boston’s Powerful Economic Engine

Boston’s economy is a power house yet restrictions on immigration will retard its output. Retiring babyboomers (although many are continuing to work) and a full employment situation mean growth will be constrained by a lack of workers, including skilled workers from other countries.

It’s good news for workers in other cities and states who need jobs. If you can find somewhere to live in Boston, you should have little trouble finding a great job.

Finding a Home In Boston’s Many Neighborhoods

If you’re thinking of a move to Boston, you’ll want to scout out the most affordable neighborhood for you and your family. Prices vary a great deal. NAR reports these recent prices:

Area Units For Sale Units For Rent Median
Listing Price
Back Bay 172 324 $1,900,000
Beacon Hill 70 98 $1,200,000
South End 186 226 $1,300,000
Back Bay East 85 148 $1,800,000
Downtown Boston 100 165 $1,800,000
Brook Farm 64 31 $694,000
Back Bay West 52 118 $1,300,000
North End 59 104 $1,100,000
Telegraph Hill 61 105 $889,900
Columbus 74 82 $1,600,000
Washington Park 26 23 $579,000
City Point 60 74 $889,000
Columbia Point 56 89 $632,500
Shawmut 70 79 $1,500,000

 

There you have a good look at the State of Massachusetts and the Boston Housing market in spring of 2020.

Bookmark this page and return for further forecasts, predictions and market data for most major US cities including  Los Angeles, New York City, San Diego, San Francisco, Houston, Miami, Dallas, Phoenix, Denver, Seattle, Chicago, Boston, Tampa, Charlotte, Orlando, Anaheim, Beverly Hills, Malibu, San Jose, Fresno, Santa Clara, Mountainview, Palo Alto, Portland, PhiladelphiaSacramento, Washington, Atlanta, Myrtle Beach, Kansas City, St Louis, Minneapolis, St Paul, Madison, Sioux City, Rapid City, Fargo, Green Bay, Rockford, Oklahoma City, New Orleans, Austin, San Antonio, Oceanside Carlsbad,  Riverside,Las Vegas, Colorado Springs, Reno, and Charleston. For data on Canadian real estate, see the Toronto real estate report, and  Vancouver housing report.

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Housing Market Forecast – copyright Gord Collins

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