Boston Housing Market
Great Boston’s real estate market heated up in March. A warm month, combined with reduced Covid infections, increasing vaccination, frustrated pent up demand, improving economy, buyer desire for more living space, more work from home and more millennials looking to start families, along with low mortgage rates all contributed to a heating of the Boston housing market.
The 2021 forecast looks to be for rising prices and continued constrained housing listings until price become too attractive for homeowners to pass on. Single family prices jumped almost 12% in March, and given the economy, buyers should expect much higher prices in April through to August.
Masschusetts Towns Top Price Gains by Neighborhood
Greater Boston Association of Realtors reports that home sales for the month of March rose strongly. This is despite seller reluctance and a severe and increasing shortage of houses and condos for sale. This intense competition as the pandemic eases means competition for both single family houses and condominiums in and outside of Boston.
Dino Confalone, an agent with Gibson Sotheby’s International Realty in Cambridge says “The suburban single-family home market is also in high demand, but the issue there is a lack of listings which has tempered sales activity a bit. The buyers are out there. We just don’t have enough product to sell. We’re seeing the same level of buyer frenzy we saw pre-pandemic,” – from GBAR report.
The pandemic dramatically affected the 2020 housing market and its effects still linger.
March Home Sales and Prices
Sales of single family homes rose 32% from February, yet prices only rose 11.9%, while condo sales 67% with an average price rise of only 3.6%. That would suggest some bargains can be had in the Boston condo market in April.
Single-family median selling price rose rose 5.2% from $635,875 last March to a new record high monthly median price of $723,750 in March 2021. The median sales price rose 11.9% month over month 11.9 from $646,800 in February.
Buying with Cash, Site Unseen is a Key Indicator
“The housing market is really strange right now,” said Daryl Fairweather, the chief economist at Redfin. “Nearly two-thirds of homebuyers are making an offer sight unseen over the last year.” – from report in boston25news.com.
The issue with the Boston real estate market is the same as any US housing market, a lack of supply from suppressed home construction and migration of people into Greater Boston. Now that migratory trend has reversed yet supply outside of Boston simply doesn’t exist. This means bidding wars for houses and increased sales of condos in the city.
This GBAR graphic shows the strong sales growth during March. Condos sales year to date shows buyers have become interested in condos again.
Pending sales at end of March are up strongly however inventory is being dried up. Aprils stats will be out shortly so please bookmark this page and check back soon.
Housing Supply in Boston
Boston Housing Supply
Housing supply is the key variable and it has trended downward when it usually trends up. April and June numbers may be less that March’s volume and that puts significant upward pressure on prices. Sellers have nowhere to go, so the only release valve for price pressure is fast rising mortgage rates or new construction. Neither seems likely right now, so prices must rise to a point where seller fears of the unknown are overcome and they decide to list. A good market for home relocation specialists with a good imagination.
GBREB’s March Video Report Discusses January’s market transactions across the Greater Boston Metro Area.
New Listings in the Greater Boston Metro Area
Good news for home buyers in March was that new listings jumped nicely after being severely depressed from December onward.
Condo listings rose by 32% year over year, while single-family homes dropped from 12 months ago. In the condo market 2,050 units were up for sale this March, a rise of 30.2% from one year ago when 1,575 condos were on the market. The number of new condo listings in the Boston MA market grew on an annual basis by 47.7%, from 1,216 last March to 1,796 in March 2021. Conversely, single family home listings fell 33% percent, from 1,726 homes for sale last March to just 1,151 homes on the market last month.
The number of listings added to the market rose only 7.7% from 1,576 new listings in March 2020 versus 1,697 new listings last month.
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?
City of Boston Home Sales
City of Boston Home Sales (January 2021)
Massachusetts Market Report
A 70% drop in homes for sale in Massachusetts is the big factor in March. New listings are picking up however.
Please do share this report on Boston’s housing Market
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 Compare?
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 and demand is expected to be consistent for single family homes.
Yes, it looks as though home prices are about to rise in Boston. So the questions: “should I buy a house right now?” or even “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 best renovation for ROI and where to move to.
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
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
|Back Bay East||85||148||$1,800,000|
|Back Bay West||52||118||$1,300,000|
There you have a good look at the State of Massachusetts and the Boston Housing market in spring of 2020.
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