Boston condo prices are rising faster than Bostonian incomes
Boston Condos for Sale
Boston condo prices are rising faster than Bostonian incomes
How did the local home prices go up so quickly in two years?
The low rates helped buyers lose their minds, but it was more attributable to how we price homes.
When there was a sale that was 10% or more above comps, it became the new standard – and made the next seller so giddy that they started from there. Prices were leapfrogging higher!
Updated: Boston Real Estate Blog 2023
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Home prices climb nationally and in Boston, which ranks No. 14 for annual percentage growth
Home prices nationwide continued to climb higher in February compared to 12 months ago, according to the S&P CoreLogic Case-Shiller Indices released Tuesday.
National Home Price Index
The national home price index showed a 19.8% annual gain in February.
Within the 20-City Composite Home Price Index, Phoenix (32.9%), Tampa (32.6%) and Miami (29.7%) showed the biggest annual percentage growth.
Boston Condo Prices
Boston was 14th on the list at 14.6% pricing growth.
“The S&P CoreLogic Case-Shiller Index pushed up to a 19.8% increase in February, the second consecutive month of accelerated growth after a winter lull, and another month of the strongest annual increase since the beginning of the data series,” said CoreLogic Deputy Chief Economist Selma Happ. “Price growth was robust across the country with all 20 metro areas experiencing stronger annual gains than in January. The largest increases in annual gains were in the West Coast markets: Los Angeles, Seattle, San Diego and San Francisco, and also in high tier price segments.”
The communities in the 20-city index, ranked by annual pricing percentage growth:
Boston Condo Price Index Top 20
Phoenix — 32.9%
Tampa — 32.6%
Miami — 29.7%
San Diego — 29.1%
Dallas — 28.8%
Las Vegas — 27.5%
Seattle — 26.6%
Charlotte — 25.5%
Atlanta — 24%
San Francisco — 22.9%
Denver — 22.3%
Los Angeles — 22.1%
Portland — 19%
Detroit — 14.6%
Cleveland — 13.6%
Chicago — 13.1%
New York — 12.9%
Minneapolis — 12%
Washington — 11.9%
Updated: Boston Real Estate Blog 2022
Ford Realty Boston Beacon Hill Real Estate Office Location
If you’ve been looking to purchase a Boston condo for sale, this new study may not surprise you, real estate prices are rising faster than incomes.
Home prices have shot up nearly nationwide while household income fell.
During the Covid pandemic, home prices have shot up nearly nationwide while household income fell.
As a result, homeownership became out of reach for many would-be Boston condominium buyers.
However, affordability was a growing problem well before 2020 and the start of the pandemic.
In the last decade, the median home price rose roughly 30% and incomes crept up just 11% over the same time period, according to a Bankrate analysis of data from the National Association of Home Builders/Wells Fargo Housing Opportunity Index.
Over 50 years, the difference is even more striking. After accounting for inflation, home prices have jumped 118% since 1965, while income has only increased by 15%, according to a separate report by online brokerage Clever Real Estate, based on Census data.
In effect, the pandemic-induced run on housing only worsened the affordability crisis for many potential home buyers, even with record-low interest rates on mortgages.
To afford a home in 2021, Americans need an average income of $144,192 — far more than the median household income of $69,178,
Some experts — and lenders — say a home’s sale price should not exceed 2.5 times your annual salary.
However, with home prices rising exponentially faster than income, it is increasingly difficult to do this, noted Francesca Ortegren, Clever Real Estate’s data scientist.
After the pandemic caused housing prices to spike, homes now cost 5.4 times more, on average, than a typical buyer’s gross income.
Of America’s 50 most populated cities, only six had a “healthy” price-to-income ratio at or below 2.6, Clever found: Pittsburgh, Cleveland, Oklahoma City, St. Louis, Cincinnati and Birmingham, Alabama.
On the other end of the spectrum, the least affordable cities were, unsurprisingly, San Jose, San Francisco, San Diego, New York and Los Angeles — where the price-to-income ratio is as high as 9.8
