Boston boasts a dynamic housing market. The space is constantly changing with new trends and fluctuating prices. For agents to survive, a clear picture of the happenings is critical.
Local agents are best positioned to forecast what to expect in the Boston real estate market. In this post, we’ll look at some predictions from these agents. If you’re in the business, too, it’ll help you plan better.
Local Insights Into Boston’s Real Estate Market
Here are the top 10 predictions by expert agents about the housing market in Boston:
1. Median Selling Price Won’t Change Much
Many agents in the Massachusetts capital agree that the median price of homes will more or less stay the same. If it’s going to change, then, a decline could be expected. The local agents believe this will occur as a result of low inventory.
This prediction isn’t far off, considering the past year’s trends. Data from Zillow shows that the median selling price of homes in Boston is down by over 2% in the past 12 months.
How does low inventory cause this? Well, Boston’s real estate market continues to favor sellers. Since it’s not a balanced market, demand exceeds supply, and naturally, this means higher home prices. However, it also means clients have fewer choices.
As a result, some buyers can leave the market entirely or go for lower-priced homes. In turn, sellers can’t afford to further increase prices. If they do, more buyers will be put off from purchasing homes.
2. Fewer Homes Will Sell
As prices are predicted to stay the same or decline, there’s a consensus that the Boston real estate market will record fewer transactions going forward. This prediction still hovers around low inventory. However, another significant contributing factor is high prices.
It’s true realty agents in Boston expect prices to not increase much. This doesn’t mean that the current rates aren’t expensive. As a matter of fact, the median price of homes in Boston is over 2x that of the United States.
If buyers can’t find an affordable deal, they have no option but to forfeit the purchase. Others would consider renting, which reduces the number of sales in the market. Already, the city of Boston has far more renters than homeowners.
Statistics on real estate trends in Boston show renters make up over 67% of the market. Meanwhile, homeowners take up around 32%. This trend is expected to not change unless there’s a significant price reduction.
3. The Housing Market Will See Higher Mortgage Interest Rates
The third on this list of Boston housing market predictions involves mortgages. Local agents in Boston foresee rising interest rates on mortgage loans. Many property professionals in the US expect the same, mainly because of the Fed hike. The Fed hike is due to inflation, which reached about 7% in late 2022.
However, some other factors make the situation in the Massachusetts capital particular. As explained, supply is low in the Boston housing market bubble while demand is high. Consequently, mortgage applications in the city are also high, as many people seek assistance to purchase their dream homes.
Loan givers cannot satisfy everyone, so they increase interest rates to attract better-paying clients. Hence, Boston real estate agents are confident mortgage rates will increase. So much so that some believe there’ll be alternative mortgage terms for home buyers.
4. Houses Close to Facilities Will Sell
While Boston housing market activities are expected to slow down, the situation will differ for properties close to top facilities. Facilities here refer to schools, hospitals, businesses, and others. People will typically want to live near these facilities for quick access.
Therefore, houses around schools and hospitals, among others, will continue to sell. Living close to top facilities guarantees a better quality of life. It helps Boston homeowners and residents save more time and money going about their daily activities.
Besides saving money and time, a real estate property gets more value when it’s close to modern facilities. People will always line up to purchase it since they can resell it in the future and still get good proposals.
Among popular neighborhoods, the Greater Boston Area takes center stage when discussing top areas with outstanding facilities in the Massachusetts capital. Hence, the prediction by local agents in the city is that the Greater Boston housing market will be at an advantage over other regions.
5. Luxury Markets Won’t Be Affected Much
The luxury market has always been super rewarding for real estate agents in Boston, offering top-dollar deals. We’re discussing a space with large properties like villas, grand houses, hotels, etc. According to predictions, activities in this market won’t fluctuate much compared to other submarkets.
Luxury properties typically sell for over a million dollars. One report estimated the median price of homes in the affluent market to be $1.31 million. Therefore, participants in this market are relatively wealthy. So, their decision to purchase properties won’t be much influenced by slight price or interest rate changes.
As a matter of fact, clients in the luxury market can get lower rates if they opt for mortgages. Most of them already have good credit scores and strong relations with banking institutions.
Some agents in the Boston real estate market forecast that luxury buyers may close more transactions. The determinant will be if prices stay stable or slightly decline. If they decline, the big spenders will want to acquire more investments in the housing market.
6. New Constructions Will Sell
Often, a home buyer will pick a newly constructed building over an old one. This is especially true for first-timers. As a result, realtors in the Boston house market predict that new constructions will continue to sell.
It’s a logical prediction, considering the low inventory in the Massachusetts capital. Home prices are high, so clients would rather pay thousands for a new building than spend the same on an old building. Some wouldn’t even mind paying extra.
From our experience at Ardor Homes Massachusetts, opting for new buildings can help homebuyers save costs. For example, they won’t need to spend extra on upgrading or updating certain areas. Consequently, there’ll be no need to hire home inspectors.
Furthermore, for Boston real estate market clients who solely want to invest, there’s no better asset than a new building.
7. Buyers Will Continue To Look for Homes That Support Work
Following the aftermath of COVID-19 and lockdown protocols, clients’ focus shifted to homes they could conveniently work from. The world is no longer battling the pandemic, but remote working is still a preference. Many home shoppers in Boston and other areas still seek places supporting work.
According to local agents, the Boston housing bubble will be influenced by work-from-home trends. In particular, clients will prioritize housing units supporting multiple home offices. Data backs this up, as statistics reveal Massachusetts has one of the highest work-from-home rates in the US.
If this prediction plays out, it may reduce commute time and distance influence. This would mean more homebuyers will drift away to less popular towns than the Boston metro area.
However, some Boston realtors don’t consider the work-from-home trend to have much influence. At least not in the aspect of searching for homes. The argument is that livable properties in the housing market can easily accommodate offices.
8. There’ll Be More Market Share for Full-Time Real Estate Agents
If you’re a full-time real estate agent in Boston, brace up because you’ll have a lot to do subsequently. This prediction is from realtors working with renowned brokerages in the Boston housing market. In their words, the market uncertainty will cause some agents to move to the sidelines.
Suppose earlier predictions of the city’s real estate market slowing down with fewer home sales are correct. That would mean less work in the housing market for agents. Part-time real estate agents may not be patient enough to stick around until things pick up. Some would leave the business to focus on their other income sources.
As more part-time agents leave the house market in Boston, space opens up for full-time realtors to grow. However, this trend isn’t new. Brokerages in Massachusetts confirm it always happens following a dull market.
Clients also play a role as well. With tight market conditions, most people will only consider experienced agents with more properties sold for guidance. By extension, some new agents may also leave the business due to low patronage.
9. Top Real Estate Businesses and Brokers Will Expand
The big companies in Boston’s housing market have an opportunity to expand and grow their business. This applies to both real estate agent firms and brokerages. In a way, it’s an after-effect of the previous prediction.
Predictions point towards fewer home sales, high mortgage rates, and stable home prices. The fact is, there’ll be downward pressure. Many firms won’t be able to keep up with the coming slow market.
Some will close shop or be acquired by big companies. By default, acquisition opportunities increase in slow markets.
Furthermore, agents in Boston may be forced to leave their brokerages and join larger firms with more clients. These are agents looking for more activity to work and earn money. Hence, realtors predict that large firms with resourceful technology and innovation will attract more realtors.
10. Agents Will Have a Hard Time Meeting Client’s Expectations
Generally, the real estate business will be complicated if you’re a Boston real estate agent. You’ll need to do more to satisfy your clients, whether buyer or seller. Many factors will trigger this, but the highlight would be prices.
With expensive home sales and high-interest rates, convincing a buyer to buy or a seller to sell won’t be facile. This is one reason why most properties in the city go for approximately the asking price.
Most often than not, realtors will have to settle bidding wars. The home seller will want to secure a high price, while the buyer wants an affordable one. Our expert advice at Ardor Homes Massachusetts is for agents to focus on strategic pricing and dynamic marketing.
Conclusion
Considering its vast nature, the Boston real estate market is always challenging to forecast. However, the above predictions tell the story from the eyes of local agents in the city. Generally, the expectation is low inventory, high demand, and stable or slightly declining home values. Also, realtors will have much work to do with hard-to-please clients.
Nevertheless, this shouldn’t throw you off as a real estate agent in Boston. You can still make many closed sales regardless of the conditions. Reach out to our committed experts in the property industry at Ardor Homes Massachusetts. We’ll be glad to help you sail the market smoothly.
Frequently Asked Questions
Is the Boston Area Real Estate Market Slowing Down?
Yes, the Boston property market is slowing down with low buyer motivation and fewer sales. This is primarily due to higher mortgage rates affecting all of the US.
What Was the Boston Rental Market Forecast in 2022?
The Boston rental market forecast in 2022 was an increase in rent prices. Data shows that rent did increase by over 12% compared to 2021.
Do Real Estate Agents Make Good Money in Boston?
Yes, agents in Boston make good money as it’s an affluent city. On average, they make around $91,500 per year. The figure is almost the same as the national average. However, some Boston agents earn as much as $190 thousand.
Is Boston Real Estate Overpriced?
The cost of property in Boston is relatively high compared to the US average. Consider the condo market in Boston, for example. The average price is over $715 thousand. Meanwhile, the US average for condo sales is around $400 thousand.
When Is a Good Time To Buy a House in Boston?
January, June, and December are some of the best months to buy a house in Boston. In January, you get a lower listing price. During June, there’s more inventory. Meanwhile, December comes with more affordable mortgage loans. Whether you pick January, June, or December depends on your circumstances.
In her 25-year career, Steph Wilkinson has been involved in the acquisition, marketing and sales of over $3 Billion dollars of residential real estate. A number of years ago, Steph transitioned into Brokerage Leadership for National real estate brands and tech start-ups. She has served as a Business Strategist for real estate agents and brokerages alike and is also a real estate coach and trainer. In her new role with the Iconic Team, Steph will be responsible for the growth of the team and will be working with all of our agents to increase their productivity and bottom line.
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