10 Things We Learned About Boston’s Fall Real Estate Market
Our Brokerage team was thrilled to have Shant Banosian, Loan Officer at Guaranteed Rate as a guest speaker at our recent All Agent Monthly Meeting. Shant's expertise in the lending industry provided our team with invaluable insights and strategies for navigating the dynamic Boston real estate landscape.
During the meeting, we discussed the latest chatter on interest rates and the Boston Real Estate Market, everything from inventory and ideas for buyers who are looking to jump into the market. Here are the ten things we learned from Shant's presentation:
- Interest Rates Moved from the 8’s to the low 7’s
In recent months, we've witnessed a notable shift in interest rates from the 8% range to the low 7's. This adjustment not only impacts affordability but also sets the stage for increased buyer activity in the market.
Inventory Remains Low
The Boston real estate landscape continues to grapple with low inventory levels. Limited options mean that buyers are presented with fewer choices, intensifying competition and driving the pace of home sales. Last year, there were 3,451 more homes listed for sale than in 2023.
Rate Reductions Have A Ripple Effect
For every 1% decrease in interest rates, a remarkable 5 million households enter the real estate market. This statistic highlights how sensitive buyer activity is to fluctuations in mortgage rates, illustrating the potential for market growth as rates lower.
Homes Are Selling Fast with Multiple Offers
Despite reduced inventory, homes in Boston are still selling rapidly, often attracting multiple offers. The high demand for real estate in the city and surrounding towns highlights the competitive nature of the current market. Buyers and sellers alike must remain aware of the dynamic marketplace and how it impacts their decisions.
The Seller's Market Persists
With less than 6 months of inventory available, Boston continues to be a seller's market. This environment places sellers in advantageous positions, as demand outpaces the available housing supply. If you are looking to sell, now may be the time to start organizing your home's listing details, such as pricing, staging, and marketing.
Mortgage Rates are Projected To Drop
Looking ahead, experts project a further decline in mortgage rates. Going into 2024, rates are projected to drop from 7.10% in Q4 2023 to 6.80% in Q1 2024, 6.60% in Q2 2024, and then to 6.40% in Q3 of 2024. This anticipated trend is expected to fuel additional interest from prospective buyers, potentially expanding the pool of homebuyers in the market.
Home Values Are Expected to Climb
The percentage change in home values is on an upward trajectory, indicating sustained growth in property values through 2027. This positive momentum reflects the resilience and attractiveness of the Boston real estate market.
Year Over Year Home Price Performance is Expected to Rise
As we approach the end of 2023, the performance of home prices is expected to show an upward trend compared to the previous December. This consistent growth reinforces Boston's reputation as a robust and appreciating real estate market.
The Strength in the Market Comes Down to Supply and Demand
At the heart of the market's strength lies the fundamental principle of supply and demand. Back in 2007, we had 4 million homes up for grabs. Fast forward to now, just a little over 1 million available. Limited supply coupled with consistent demand is a driving force behind the competitive nature of the Boston real estate scene.
Home Prices Have Historically Grown Over Time
Drawing from historical data, home prices in Boston have consistently demonstrated a pattern of growth over time. In just 5 years, home prices have increased 57.27%. Looking back 30 years, the price of buying a home has grown a whopping 297.66%. With such impressive numbers, the Boston market has proven to be an attractive option for both buyers and sellers.
As you navigate the dynamic fall market in Boston, these ten key insights provide a comprehensive overview of the current landscape. From shifting interest rates to the enduring principles of supply and demand, understanding these factors will position you competitively to make the most of every opportunity.
Ready to get started? Contact our team to learn more about the lending market and potential options for buyers.
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Basonian, S. (2023). Lender Market Update: An update on the mortgage industry, what’s working for buyers, and where rates are [PowerPoint slides]. Presented at CHARLESGATE Agent Monthly Training, Boston, MA.