There is no question about it: right now is a seller’s market for Boston residential real estate. Recently, I accompanied clients to an open house for a new condominium listing on Commonwealth Avenue in the Back Bay. The open house began at 1:30pm, and when my eager, ready-to-purchase clients and I walked into the door, we were told the unit was already under agreement – it was 1:37pm!
If you’d like further proof of a feverish seller’s market, a recent 4 bedroom condominium sale in Chalestown received multiple offers and sold for $100,000 over asking price. This is an all too common scene in today’s Boston housing market. Greater Boston’s economy is running on all cylinders, as evidenced by companies like Facebook opening offices in the area. A healthy and growing economy has helped produce plenty of ready and able buyers, driving demand through the roof.
However, many buyers are being shut out from purchasing. The main culprit: an alarmingly low housing inventory. From July through August 2013, Boston homes spent 24 fewer days on market than the same time period in 2012. Over the same time frame compared to 2012, sellers received nearly 10% more for their properties and an increase of 12% in the price per square foot. Want to know the latest market stats? We updated them monthly – just sign up here!
According to their 2013 Greater Boston Housing Report Card, released in November 2013, The Boston Foundation believes that the high cost of housing is directly related to a lack of supply. Incoming Boston Mayor Marty Walsh, a former leader of the Boston Building Trades, plans to do something about it and meet an anticipated demand of 30,000 housing units in Boston over the next 10 years
Photo by essygie on flickr.
From South Boston to The Fenway, and nearly everywhere in between, Boston development projects are moving full steam ahead. In one of its last meetings of Mayor Tom Menino’s administration, the Boston Redevelopment Authority approved $2.3 billion worth of mixed use and housing development. New markets are also emerging and being aided by two new water ferries that are slated to start shuttling passengers between South Boston’s Seaport, East Boston and Charlestown. With 5,000 units in Boston’s short-term housing pipeline (many of them apartments that will eventually turn into condominiums), one can assume that these new units will help with the sharply rising home prices in many of Boston’s neighborhoods.
As of this now, 30-year fixed mortgage rates are still very low at 4.30%. Although borrowing costs aren’t currently as low as they were compared to December 2012’s 3.40% rates, Freddie Mac expects interests rates to hover around 5.00% in 2014. Financially-saavy housing shoppers will want to lock in their purchase sooner rather than later, and aren’t waiting around for spring!
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Boston home owners teetering with selling their home should do so as soon as possible to obtain maximum value. Housing Demand is high, supply is increasing, interest rates for buyers are still near record lows, but will likely rise, and new construction is on the horizon.
