In this month’s update we will review market data from the Greater Boston real estate market to help inform what’s happening with the local real estate market and how this is impacting homeowners, sellers, buyers, and real estate investors.
First, we look at the premium (or discount) that homes are selling for when compared to their listing price. As you can see in the chart above properties have, on average, been selling more than 1% above asking price in the month of December. This premium has been trending down since peaking in June and seems to be returning to more usual levels for this time of year when compared to years past. As sellers and agents continue to adjust list prices to accommodate higher interest rates for buyers I suspect this trend will flatten or bottom in the winter months and start to uptrend in the Spring market. The market is neutral to buyers and seller right now – inventory is low and interest rates are higher than usual.
Next, we look as the supply side of the market. As shown in the chart above we can see the market has approximately 1.7 months of supply, incredibly low when compared to the last 20 years. This means that if zero new listings came on the market it would take less than 2 months to clear all existing listings. However, beginning in October we started to see signs of inventory increasing year-over-year. While still at historically low levels of supply we may continue to see an uptrend in inventory as sellers realize the market hysteria of the past 2 years is over.
Total listings have remained about the same as this time last year. We saw our usual uptick in listings beginning in the Spring and lasting through the Fall. Now we’ve entered our usual downtrend of listings as we enter the winter months in New England. As the market shifts it will be interesting to watch if a surge of new listings come in the Spring market which could put us into a strong buyer’s market quite quickly. The next few months will be important to watch!
Last, we look at the total number of multifamily properties sold in the Greater Boston area. Not surprisingly higher interest rates have slowed the number of sold homes beginning around May / June. As interest rates stabilize in the 6-7% range we may seem buyers have more confidence in buying a home but the last few months have certainly slowed down quite quickly.
Overall, the Greater Boston real estate market continues to be in a period of transition. Buying demand remains quite strong however buyers are remaining patient and sensitive to higher interest rates. Inventory and listings remain at historically low levels keeping prices high. We will continue to keep a close pulse on the market!
Reach out to me at todd@heartfeltre.com if you’re interested in discussing the market or your particular situation buying or selling a property in Greater Boston.
Thank you to Ian Hogan at https://www.engineerrealestate.com/ for compiling this market data!