Boston’s recently hot real estate market is starting to show signs of cooling off. While we had a sizzling seller’s market and tons of buyer demand earlier this year, housing sales in Greater Boston are now beginning to normalize.
For those hoping to dip their toes in the home buying waters soon, it helps to know what trends to expect. Put on your floaties, and let’s hear what the local experts predict.
Look out for the shores 🏡
Kate Johnson, Senior Vice President of Compass, thinks homebuyers around Greater Boston will continue to opt for the suburbs over the next 12 months. That means areas in the South and North Shores could see heavy house buying activity, especially those purchasing second homes in coastal communities like Hull and Scituate.
While median home prices for single-family homes in Boston are well above $800,000, areas like Weymouth and Quincy are in the $500,000-600,000 range — and, likewise, bidding wars could heat up all over.
Don’t give up on Boston 🏡
Buyers hoping to find areas with less competition may want to think about getting a sweet pad in Boston proper.
“Because of the inventory accumulating and a lot more density with larger condo buildings, there’s definitely going to be less competition for individual units,” said Daniel Duval, Managing Partner of Elevated Realty. “There are more opportunities [in the city] for buyers to get in early on a new construction project where they have a little bit of leverage.”
Worth it to wait? 🏡
It might be. Duval said he is advising his clients who don’t have to sell or buy right now (especially those moving from the city to the ‘burbs) to wait it out.
“At the end of the day, I don’t think listing prices have caught up to where [interest] rates are,” he said. “Once that evens out a little bit, I think there will be better opportunities for buyers, specifically in some of the suburban neighborhoods.”
What about renting? 🏡
The Boston area has seen a roughly 27% increase in the average rent for a one-bedroom apartment since this time last year, according to Zumper. Duval noted that the forecast is finally starting to look a bit sunnier for renters who aren’t on the typical Sept. 1 cycle.
“A lot of landlords raised the rent and had tenants that didn’t want to pay, so we saw a lot of new rental units come on [this month],” Duval said. “Right now is actually not that bad of a time to rent.”
Eyeing certain neighborhoods 🏡
East Boston has been the fastest growing neighborhood in our city over the past few years.
“We think that trend will continue based on the construction pipeline — there’s a lot of commercial and retail moving into that space as well,” Duval said.
He also noted that the stronghold neighborhoods (think: South Boston) and more traditional hot spots (think: South End, Back Bay, and Beacon Hill) will likely remain desirable for buyers.
“The buyers in a higher pricing echelon aren’t as affected by interest rates, so those markets with higher price points are still seeing movement,” Duval said.
Supply + demand 🏡
The entire housing market seems to be cooling as supply and demand evens out, with one in five homesellers dropping their asking price in August.
Johnson said that housing inventory has increased up to 80% in her market (the South Shore). “Even though the inventory is high relative to a year ago, if you compare it historically, it’s still actually low,” she said.
The state government is looking to help eligible first-time homebuyers get their foot in the door with MassDREAMS. The new grant program aims to assist community members who have been disproportionately impacted by the pandemic.
Pro tip: Buyers and sellers alike should be aware of seasonal adjustments over the next year, which Duval and Johnson expect to reflect normal patterns in Boston. There are typically selling slowdowns around major holidays, while late winter through spring is the strongest time to buy or sell.