Good news – Boston condo inventory on the rise
Boston Condos for Sale and Rent
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Good news – Boston condo inventory on the rise
Home listings grew in December as housing prices stabilized, closing out an interesting 2023 for the real estate market.
Nationally, listings grew 4% year over year in December, a sign the market is becoming more active, giving prospective buyers higher levels of inventory to choose from, according to Realtor.com’s December Monthly Housing Trends Report.
New listings in Boston grew 9.9% from 2022.
Declining mortgage rates are a trend Realtor.com anticipates will make a positive impact on home-selling sentiment and the possibility that more new listings will enter the market.
Realtor.com chief economist Danielle Hale says inventory improvements are being seen across the country, especially in the South, which experienced a 7.7% year-over-year increase in active listings, but the number of homes for sale still hasn’t reached their pre-pandemic levels.
“While the uptick in December inventory levels is encouraging, it is important to note that two-thirds of outstanding mortgages in the U.S. have a rate under 4% and more than 90% have a rate less than 6%,” Hale said. “We are optimistic that inventory levels are moving in a positive direction, but the number of homes on the market is still low relative to pre-pandemic levels. Some sellers are clearly motivated already, but other households may hold out for lower rates before selling or moving to new homes.”
Home prices rose in December with the national median list price growing to $410,000, a 1.2% increase from 2022 and up 36.7% from 2019.
Boston’s median list price was $800,000 in December, up 6.8% from 2022.
Good news – Boston condo inventory on the rise
Boston Condo Market Booms: Summer Inventory on the Rise
Downtown Boston had the largest increase in Boston condo for sale supply in June, according to a new report.
RE/MAX’s National Housing Report ranked Greater Boston No. 1 in the country for having the largest increase in months’ supply of housing in June. That supply was up 96.7% year over year, increasing from 1.1 months to 2.2.
:As a result, the average Boston condo buyer income is not matching the average median home-sale price. Interest rates have more than doubled in the last two years, which is also resulting in some buyer hesitation,” Vieira said. “Buyers think they need to marry the interest rate when really they need to marry the house and date the rate. We’re now into the summer months when we traditionally slow down due to vacations. The silver lining is if the home is priced right and meets all the criteria for the buyer in that particular area, you will still see offers over asking price and bidding wars.”
While year over year, inventory had huge growth in June, area home sales were down 21.6% from 2022. Month over month, they were up 29.1%.
The current median home sale price in Greater Boston is $685,000, up 3.8% month over month and 3.7% year over year.
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Good news – Boston condo inventory on the rise
The Boston skyline is changing and so too is the city’s condominium landscape. As we approach the summer of 2023, a blooming inventory of Boston condos has marked a thrilling uptick, reshaping both urban living and investment opportunities. Picture meandering through Beacon Street, but instead of just admiring quaint brick row houses, your attention now shifts upward to gleaming condominium buildings that grace the city’s iconic panorama. Strap in for an exciting exploration of this real estate resurgence right here in Beantown!
As our article explains, Boston condo inventory tends to rise during the summer months due to increased demand for homes. This year is no exception, and we are seeing a steady increase in available condos on the market. However, it is important to work with a knowledgeable real estate agent who can help you navigate these changes and find the perfect condo for your needs.
Boston’s Booming Condo Market
The real estate market in Boston has been experiencing a significant rise in demand, and the condo market, in particular, is booming. This growth can be attributed to various factors, including an increase in job opportunities, favorable mortgage rates, and a change in lifestyles.
One factor that has had a significant impact on the condo market is the increasing number of millennials entering the housing market. Millennials are becoming increasingly interested in homeownership, and condos offer an affordable option for first-time buyers. Additionally, condos often provide convenient locations and access to amenities that appeal to younger homebuyers.
Another factor driving the boom is an influx of foreign buyers who are investing in Boston’s real estate market. Condos are often seen as a safe investment due to their affordability and potential for high returns.
The rising demand for condos has led to increased development, particularly in emerging neighborhoods such as East Boston and Dorchester. Developers are seizing the opportunity to build new condo buildings to meet the growing demand.
It’s similar to how a surfer catches a wave at the perfect time – these developers are riding a wave of demand for condos that shows no signs of slowing down.
This growth is not just limited to new constructions; older buildings that have been converted into condos are also attracting buyers. Many of these units offer unique features that cannot be found in new construction properties. For instance, some converted condos retain historical features such as original woodwork or exposed brick walls that give them character.
In terms of pricing, while prices have risen steadily over the past few years, they remain competitive when compared with other major cities such as New York or San Francisco. The average price per square foot for a condo in Boston is around $1,000 – significantly less than similar properties in other popular metropolitan areas.
With demand for condos increasing in Boston, it’s no surprise that inventory is on the rise. In the next section, we’ll explore the impact of this surge on buyers.
Summer Inventory Surge
As we’ve already established, Boston’s condo market is booming – but what about summer inventory surges? With Boston’s warmest and sunniest months upon us, it’s a perfect time to examine how much this market grows as temperatures rise.
The biggest impact can be seen in traditionally popular areas such as Back Bay and Beacon Hill. These neighborhoods’ listings are usually limited due to their location; however, this changes during the summer when more owners choose to put their properties up for sale.
One specific example of this happening was observed at a high-end condominium building in the Seaport District last summer. The number of available units increased from 5 to 15 in just a few weeks as owners tried to capitalize on the prime selling season.
While this may seem like a great opportunity for buyers, it does come with its challenges. A sudden increase in the number of available properties can make it difficult for buyers to reach an informed decision.
Some industry professionals argue that summer inventory surges could lead to lower prices due to increased competition between sellers. However, others claim that demand will keep prices at or above market value.
Regardless of which side you take in this argument, there’s no denying that summertime inventory surges will continue to play a significant role in Boston’s condo market.
With inventory increasing, how do these supply-and-demand dynamics affect pricing and sales volumes? Let’s dive into some numbers in the next section.
Impact on Buyers
As summer arrives, so does an influx of condos hitting the Boston real estate market. While this may seem like a buyer’s dream come true, it can also create challenges for those looking to purchase a condo. With more options available, buyers may find themselves overwhelmed with choices and unable to make a decision. On the other hand, if they wait too long to act, they may find that their desired condo has been snapped up by another buyer.
During this time, buyers must be vigilant and work quickly to secure a desirable property. Some have even resorted to making offers above asking price in an effort to stand out in this competitive market.
John and Sarah had been searching for their dream condo in Boston for months when they noticed an uptick in available listings during the summer. Excited by the possibilities, they scheduled several viewings only to find that many of them had already received multiple offers by the time they arrived. Frustrated but determined, they eventually managed to secure their dream property by offering above asking price.
Pricing and Sales Amid Inventory Rise
While summer inventory increases buyer options, it can also have some downsides. One challenge is that increased competition often leads to higher prices and fewer concessions from sellers.
Additionally, buyers must work harder to differentiate themselves from competitors. This means having pre-approval letters ready, submitting strong offers promptly after viewing properties, and being willing to compromise or forego certain amenities or features if necessary.
House hunting in Boston’s summer real estate market is like playing a game of musical chairs. The music starts, and buyers must scramble to grab the available condos before others swoop in and take them first. To be successful, buyers must be strategic, nimble, and ready to act fast.
While some may argue that summer inventory disadvantages buyers, there is also an argument that it provides more equitable opportunities for everyone. With more options available, buyers have a better chance of finding something they love at a price they can afford. Additionally, sellers have the opportunity to connect with more prospective buyers and potentially receive higher offers.
Pricing and Sales Amid Inventory Rise
Effect on Condo Prices
With the surge in summer inventory, it’s only natural to wonder about the impact on condo prices. Admittedly, there are a few factors that come into play when considering how a rise in inventory can influence pricing. One key element is supply and demand. When there is an excess of properties on the market, sellers have to compete with each other for buyers, which potentially drives down prices.
For instance, in 2017, Boston experienced an uncharacteristic sluggish growth after several years of a booming condo market. Because of sudden changes in the economy and unfavourable buying conditions for young buyers who were waiting to land stable jobs or financial backings from family members, there were fewer people buying condos during this period than before. During this time frame, developers were trying to get rid of condos as fast as possible by offering deep discounts. This exemplifies how a decrease in demand might strike up an oversupply situation quite easily.
However, it’s not just supply and demand that impact pricing- we must also consider external economic factors such as interest rates. In some cases, rising inventory could attract more buyers to the market who had previously been priced out of certain neighbourhoods—thereby stabilizing prices instead of driving them down.
In early 2020, experts predicted that the US Federal Reserve would likely lower interest rates due to COVID-19-related economic disruptions. The lowered interest rate had a direct effect on housing costs in cities like Boston where real estate saw higher-than-average unit price appreciation shortly afterwards.
All things considered; the most important takeaway is that there is no one-size-fits-all answer when it comes to how rising inventory will impact condo prices in Boston. While there are plenty of indicators that suggest dropping prices may be on the horizon if inventory continues climbing (especially in areas where new constructions continue to flood the market), there are just as many factors that could keep pricing steady or even push it higher.
Understanding how inventory prices can sway is just one step in understanding the greater picture of what goes on in the Boston condo market. In the next section, we’ll discuss how rising condo inventory influences sales volume.
- In a survey conducted by the Greater Boston Association of Realtors, condo listings in Boston saw a 12% increase during the summer months of 2022.
- The mortgage purchase applications index pointed towards a rising demand for condos in Boston, with an increase of about 6.7% observed from May to August in 2022.
- A Zillow research in 2022 revealed that, on average, condo inventory in Boston rises by around 4 percent during the summer months of June, July and August.
Influence on Sales Volume
As Boston’s condo inventory rises during the summer months, so do prices. With a larger pool of buyers vying for available units, sellers are often able to secure higher prices than they would during other seasons.
Additionally, while many people look for homes during the warmer months, not all are committed to making a purchase. This means that some listings may have inflated asking prices or sell at premium prices due to the lack of qualified buyers.
According to Boston Real Estate Times, the median price of condos sold in Boston rose by 7.9% between June 2020 and June 2021 – from $746,000 to $805,000. This indicates that prices are trending up in spite of the pandemic.
Understanding the Market’s Seasonal Trends
Just as there is no definitive answer to whether rising inventory will result in lowered prices, there is also no clear-cut answer when it comes to sales volume. Once again, factors such as supply and demand, interest rates, and the state of the economy all play a role when it comes to whether buyers will opt to make purchases.
While a surplus of condos on the market might appear to be negative news for sellers trying to make deals before the end of summer, it could offer some relief for buyers getting into Boston’s hot real estate market later on down the line. The median sales price in Boston was $715k in June 2020- if inventory continues to rise beyond seasonal norms, developers may potentially be more willing to negotiate pricing instead of waiting around for a buyer who is willing to pay over asking price.
At the same time, rising inventory numbers can also inspire confidence among an otherwise hesitant group of potential buyers. In fact, certain neighborhoods have unlocked opportunities for buyers who were previously priced out of certain markets now that many locals move away from city centres amid the pandemic and increasing numbers rely on remote work—what was once unaffordable could now be up for negotiation with a developing agent or landlord.
One way to think about how rising condo inventory can affect sales volume involves considering customers shopping at a mall during Christmas time. When there are too few customers available because of competition from other malls’ discounts, there are fewer sales. However, more customers come in when other retailers offer something better for their money, which potentially increases overall sales volumes and profits.
Of course, the converse is also true- if buyers believe that prices will continue to drop or are already out of their budget range, they might hold off on making a purchase altogether. It’s important to keep in mind that macro-economic factors such as job and wage growth will likely have a much more significant impact on the Boston condo market than inventory alone.
With both pricing and sales volume examined, it’s clear that Boston’s booming condo market this summer may present opportunities for both buyers and sellers alike- but only time will tell how these two forces will shake out in tandem with external economic conditions.
- When it comes to the effect of rising inventory on condo prices and sales volume, there is no definitive answer as it depends on various factors such as supply and demand, interest rates, and the state of the economy. However, a surplus of condos on the market may offer relief for buyers later on down the line, potentially leading to more negotiations on pricing. Rising inventory can also inspire confidence among hesitant potential buyers and unlock opportunities for those previously priced out of certain markets. Nevertheless, macro-economic factors will likely have a significant impact on the Boston condo market. Overall, Boston’s booming condo market this summer may present opportunities for both buyers and sellers, but external economic conditions will ultimately play a deciding role.
Factors Behind the Summer Inventory Spike
As prices rise in response to increased demand, sales volumes typically dip as fewer properties are sold overall. However, this is not always the case. In situations where supply outweighs demand or buying inventory increases dramatically without an accompanying increase in qualified buyers – sales volume may stay steady or even increase.
For instance, if there are 200 condos available in August compared to 100 in June but only 60 interested buyers in both months, the sales volume may still increase during peak buying season due to the increase in inventory.
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Good news – Boston condo inventory on the rise
There’s no doubt buying a home today is different than it was over the past couple of years, and the shift in the market has led to advantages for buyers today. Right now, there are specific reasons that make this housing market attractive for those who’ve thought about buying but have sidelined their search due to rising mortgage rates.
Buying a home in any market is a personal decision, and the best way to make that decision is to educate yourself on the facts, not following sensationalized headlines in the news today. The reality is, headlines do more to terrify people thinking about buying a home than they do to clarify what’s actually going on with real estate.
Here are three reasons potential homebuyers should consider buying a home today.
1. More Homes Are for Sale Right Now
According to data from the National Association of Realtors (NAR), this year, the supply of homes for sale has grown significantly compared to where we started the year (see graph below):
This growth has happened for two reasons: homeowners listing their homes for sale and homes staying on the market a bit longer as buyer demand has moderated in response to higher mortgage rates.
The good news for you is that more inventory means more homes to choose from. And when there are more homes on the market, you could also see less competition from other buyers because the peak frenzy of competing over the same home has eased too.
2. Home Prices Are Not Projected To Crash
Experts don’t believe home prices will crash like they did in 2008. Instead, home prices will moderate at various levels depending on the local market and the factors, like supply and demand, at play in that area. That’s why some experts are calling for slight appreciation and others are calling for slight depreciation (see graph below):
If you consider the big picture and average the expert forecasts for 2023 together, the expectation is for relatively flat or neutral price appreciation next year. So, if you’re worried about buying a home because you’re afraid home prices will crash like they did in 2008, rest assured that’s not what expert projections tell us.
3. Mortgage Rates Have Risen, but They Will Come Down
While mortgage rates have risen dramatically this year, the rapid increases we’ve seen have moderated in recent weeks as early signs hint that inflation may be easing slightly. Where they’ll go from here largely depends on what happens next with inflation. If inflation does truly begin to cool, mortgage rates may come down as a result.
When that happens, expect more buyers to jump back into the market. For you, that means you’ll once again face more competition. Buying your house now before more buyers reenter the market could help you get one step ahead. As Lawrence Yun, Chief Economist for NAR, says:
“The upcoming months should see a return of buyers, as mortgage rates appear to have already peaked and have been coming down since mid-November.”
When mortgage rates come down, those waiting on the sidelines will jump back in. Your advantage is getting in before they do.
Boston Condos and the Bottom Line
If you’re thinking about buying a home, you should seriously consider the advantages today’s market offers. Let’s connect so you can make the dream of homeownership a reality.
Good news – Boston condo inventory on the rise
There’s a lot of talk lately about how challenging it can be to find a Boston condo to buy. While Boston residential housing inventory is still low, there are a few important things to understand about the supply of homes for sale as we move into the end of the year.
The Number of Homes for Sale Usually Peaks in the Fall
In the residential real estate market, trends generally follow a predictable and seasonal pattern. Typically, the number of homes available for sale (or active monthly listings) peaks in the fall. But in a chapter where so little feels normal, the question becomes: should we expect a fall peak this year?
If we look at the active monthly listings for 2021 (shown in the chart below), we’ll see that the number of homes on the market has increased fairly steadily since spring this year. The realtor.com data shows we’re still seeing an increase in active inventory month-over-month. While that gain is a bit smaller month-to-month (see August to September in the chart), September numbers are still up from the month prior.
The important takeaway here is the latest monthly numbers show growth. At the end of September, buyers had more options to pick from than they did this spring. That’s encouraging for buyers who may have paused their search months ago because they had trouble finding a home. Danielle Hale, Chief Economist at realtor.com, sums this up nicely:
“Put simply, this September buyers had more options than they’ve had all year and while that’s typical of early fall, that’s not what happened in 2020. Still, it’s important to remember that while buyers may have an easier time this fall than they did in the spring, the market remains more competitive than it has been historically at this time of year.”
As Hale says, a fall peak in inventory is in line with typical seasonal trends. While it’s impossible to say for certain what the future holds for housing inventory, we do know both buyers and sellers have opportunities this season based on the latest data.
What Does That Mean for You as a Boston condo buyer?
If you’re thinking of buying a Boston condominium for sale, rest assured you do have more options now than you did earlier this year – and that’s a welcome relief. That said, today’s market is still highly competitive. This isn’t the time to slow your search. It’s actually the season when the number of homes available for sale tends to peak. Focus on the additional options with renewed energy this season and be prepared for ongoing competition from other buyers.
If you’re considering selling your house, realize that while growing, inventory is still low. Selling now means you’ll be in a great position to negotiate with buyers – and competition among buyers is good news for your bottom line. Eager buyers will likely be motivated to act before the holidays, giving you the benefit of a fast sale.
Boston Condo and the Bottom Line
Whether you’re buying or selling a Boston condo, there’s still a chance to make your goals a reality this season. Let’s connect so we can discuss what’s going on with the local market and current trends and what they mean for you.
Boston Condos for Sale and Rent
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