At some point, Boston real estate prices become so expensive that no matter how low interest rates go, the average Boston condo buyer simply can’t afford to buy.
We may very well be at that point now. But even if not yet, it’s clear that the tremendous tailwind driving Boston real estate prices since the Great Financial Crisis is sputtering out.
With this year’s plummet in mortgage rates and the seasonally-strong summer months just ended, one would expect a strong boost on Boston condo sales. But instead, Realtor.com just reported a highly unusual price drop from July to August — the largest summer decline seen since the company started compiling this data set.
In addition, as reported in one of my last Boston luxury condo blog posts the number of downtown Boston condo sales when comparing August 2019 to August 2018 was down 10.9%
What’s behind the sudden softening?
Well, as mentioned, affordability is a big issue. While wage growth has been anemic since the Great Recession, US household debt is now higher than it has ever been.
Bottom Line
We should get a steady stream of doom & gloom from now on because it’s such good click bait for the Boston Media. In addition, with the kick-off of the 2020 presidential election’s historically the U.S, real estate market slows down.
File Under: Perception becomes Reality
