The overall housing market in the greater Boston area has been on fire with record-low mortgage rates and a surge of relocations spurred by the ability to work remotely. The most significant trend in 2020 was the exodus of people from the city to surrounding suburbs. This migration has created new opportunities and challenges for both buyers and sellers. The impact will be felt far into 2021. Here are key trends to watch:
1. Shifting dynamic in Boston
Some of Boston’s trendiest neighborhoods were hit the hardest during the pandemic. While this isn’t great news for city homeowners, it has helped to level the playing field for opportunistic home buyers and renters. Both list and rent prices in some areas have been discounted by upwards of 15% off original asking prices. With low mortgage rates and more homes to choose from, buyers are feeling like they have the upper hand. For sellers, it is going to take additional resources to attract a buyer. Creating a solid listing strategy for your home will be critical if you plan to sell this year.
2. Inventory shortages in the suburbs
Home values are largely driven by the principles of supply and demand. On the whole, the market will remain seller-friendly, particularly in areas short on housing inventory. Outside of Boston, many markets across the region are experiencing less than one month of housing supply (a market is considered to be in equilibrium between buyers and sellers when the number of available properties equals six months of sales).
3. Strong spring market
COVID-19 caused an initial pause in the market, but sales rebounded in Q3 of 2020 with record prices being set in many communities in the greater Boston area. That said, many buyers and sellers were uncertain and delayed entering the market in 2020. I’m anticipating an active spring season due to pent up demand and a busy summer.
4. Interest rates remain low
Mortgage rates hit rock bottom in 2020 and I predict they will remain favorably low well into 2021. The Federal Reserve has indicated a desire to keep rates low. While the Federal Reserve doesn’t directly control mortgage rates, oftentimes there is a correlation when low interest rate policies are rolled out.
5. Technology is here to stay
Today’s reality calls for virtual reality. My clients are exploring homes for sale using new technologies, including video, 3D tours and live streaming. These technologies are here to stay and will continue to supplement the home buying and selling experience.
6. Buyers prioritize lifestyle amenities
Top on any house hunter’s wish list is square footage and outdoor space to meet new demands for remote working/learning and activities at home. This is a trend that is sure to continue into the new year as buyers prioritize lifestyle amenities like proximity to beaches and walking trails, and space for outdoor entertaining.
About Dana Bull: Dana is a trusted real estate advisor who assists clients across all aspects of residential real estate. She has advised hundreds of buyers, sellers, and investors across Greater Boston and beyond. Contact her at firstname.lastname@example.org.