Looking to sell your home in Boston soon? You might want to rethink that. If you’re still fixated on selling your Boston property, read this piece. We’ve got some proof as to why home sales in Boston currently could be a huge mistake.
First, we’ll examine how the current housing market is affecting home prices in Boston. Additionally, we’ll look at how the economy and buyer preferences are playing a role in its housing market.
Ready to get a clear understanding of the market trends and be able to make an informed decision about whether now is really the best time to sell your Boston home? Sit tight and let’s dive in.
The Current Boston Market Clime
In order for us to understand the property sales glut in the Boston real estate market, it’s important to highlight the current Boston’s real estate market and climate. Since the COVID-19 outbreak in 2020, the Boston real estate market has been experiencing a significant shortage of housing supply. The result? A strong seller’s market.
The supply of housing in the city keeps struggling against the teeming demand, so you won’t find many active property listings around. As such, an uptick in home prices takes precedence.
We must also consider the lack of new construction of single-family homes in the current market. So far, there’s been a significant increase in the number of apartments and condominiums built in Boston. Yet, none of that reflects the number of single-family homes built.
Expectedly, there’s a shortage of single-family homes for sale, making it difficult for buyers who are looking for a larger home or a yard. But things have only gotten more interesting from there.
A recent report found that fixed-rate mortgage interests on Boston homes have gone up. With that, there’s a two-way problem: on one hand, sellers are reluctant to the idea of an outright property sale, since the new higher interests come into effect on their next property purchase.
On the other hand, buyers also balk at the new fixed-rate mortgage. Even if there’s a ready homebuyer, there’s not much active listing to go round. So they also wait for the rates to decrease. Thus, a buyer-seller stalemate is where the Boston housing market stands currently.
Reasons Why Selling your Home in Boston Now Isn’t a Great Idea
The Boston property market looks like a buyer’s market, when it really isn’t. The median price is falling month-on-month, but still on the up year-on-year. Still unsure whether to put your Boston home for sale? Below are a few pointers that might convince you not to:
1. The Interest Rates Are High at the Moment
Put plainly, Boston’s real estate market has seen a rise in its fixed-rate mortgage interest. What does that mean for you? Typically, a higher fixed-rate mortgage interest can have a significant impact on the overall cost of homeownership and should deter you from selling your home.
It’s worth mentioning that a higher fixed-rate mortgage interest means an expensive cost of borrowing. Your monthly mortgage payment gets increased, and over time, the amount of interest you pay on your mortgage rises.
For example, say you started out with a $500,000 mortgage with a fixed interest rate of 3% and a term of 30 years. Your monthly mortgage payment would be about $2,110. However, if the interest rate increased to 6%, your monthly payment would increase to approximately $2,970 — an $860 bump.
The increase instantly makes it more challenging to sell your home. Why? A higher mortgage payment makes your home less affordable for potential buyers.
But that’s not all: a higher fixed-rate mortgage interest will most likely trigger a lower median price. Buyers are often more sensitive to the overall cost of homeownership, including the monthly mortgage payment. A higher mortgage payment makes your home less attractive on the property market, and they may be less willing to pay a higher price for your home.
2. The Season Isn’t Yet Right
The time of year has such a significant impact on the Boston real estate market in Boston. Generally, the market tends to be more active during the spring and summer months when the weather is nicer, and families are more likely to move. Conversely, the market can slow down during the winter, when people may be less inclined to relocate due to the cold weather and holidays.
Boston is particularly known for its harsh winters; the cold weather and snow can make it difficult for potential buyers to visit your property. This adverse climate can also make your home less appealing to buyers who don’t want to deal with the hassle of shoveling snow and ice.
Many potential buyers may also be busy with holiday activities and travel, and aren’t actively looking for a home just yet. So, shelve the idea of a home sale at this time, as it might disrupt your holiday plans.
3. Better Economic Conditions in the Future
As expected, the general economic conditions in the Boston area can inform your decision on whether to sell the house or not. In an economic downturn, for example, buyers are hesitant to purchase homes, and sellers are inclined to hold onto their properties until the market improves.
Besides, when the economy is weak and there’s high unemployment, the demand for homes reduces. Why? Potential buyers may be less inclined to make a significant investment on a property.
On the other hand, when the economy gets stronger — as it’s looking to be in the near future — it can lead to increased home demand, as potential buyers feel more confident in their financial situations and are willing to invest in a property.
As such, you might want to hold on to the property for sometime, until the economy becomes more favorable than its present state.
4. The Market Trends Are Unpredictable
If you’re looking to sell your Boston home, you’ll need to keep a close eye on the local real estate market. However, the current market trend has been chaotic — we’ll tell you that much. While there’s been steady growth over the past few years, with prices rising at a moderate pace, buyers and sellers alike are holding on with bated breaths.
For one thing, the listing inventory remains low. With that, sellers have the bigger leverage and could potentially receive more offers above their asking price. But that’s not the seller’s win you might think it is.
There are mortgage interest rates, which recently doubled, to consider. It’s now challenging for buyers to obtain a mortgage, let alone bid for an available property at the current median sale price. As such, sellers have two alternatives: lower their selling price or delist their home.
5. Are you Really Ready to Move Homes?
Personal circumstances can also play a significant role in determining whether selling a home in Boston is a great idea currently. For instance, if you’re in the middle of a divorce or other life-changing event, it’s best to put off the sale of your home until the situation gets resolved.
Similarly, if you’re undergoing a significant renovation or repair work, you may want to wait until the work is complete to put your home on the market.
6. Sellers’ Competition
When selling a Boston home, it’s important to consider the level of competition you’re likely to face. If there are many other sellers offering similar homes in your area, it could impact your ability to sell your property quickly and at a desirable or approximate asking price.
One way that sellers’ competition gets to you is by driving down prices. If there are more single family homes on the market at median selling price, buyers may have more bargaining power and be able to negotiate lower prices. This scenario could result in a decrease in your property’s overall value, making it less attractive to potential buyers.
Another way that competition can deter you is by making your home more difficult to stand out. In a horde of single family homes on the market, differentiating your property becomes a significant task. If done poorly, it could spend longer days on market, receive lower offers, or worse — attract no offers at all. So, you’re better off delisting and putting off your condo sales till when the market gets less saturated.
Alternatives to an Outright Property Sale in Boston
Selling your home in the Boston area might not be the best idea right now. But what can you do in the meantime?
The following are alternatives you can consider:
1. Build an Extra Space
A possible reason to sell a Boston property is to make enough money to buy a newer, bigger, or better home. But with the current market climate and mortgage interests, it’s much more expensive to opt for a new home.
So what can you do in such a situation? Building an extra space on your current property is a sensible side-step. When you think about it, you get a bigger living area without incurring the higher cost of moving outright.
However, we’ll be the first to admit that home upgrades don’t come cheap. Building an extra space will set your finances back significantly, but only in the short term. You’d be glad to find out that the cost is still far less than buying a new home in Boston.
2. Wait It Out
Since there’s a bit of buyer-seller stalemate currently going on in the Boston housing market, why not get with the program? Potential buyers are renting, while sellers aren’t budging on the fixed-rate interests on new single family homes. Soon, bodies like the Greater Boston Association of REALTORS® will be forced to rally the mortgage interests back down to the 3% it used to command.
Current market projections will have us believe that such a time isn’t far out anymore. Thus, wait a little longer before listing your property — that’s if you absolutely must sell the home.
3. Consult a Realtor
Amidst the market volatility and ambiguity, the clear voice of a professional real estate agent can mean a lot. Therefore, it’s not such a bad idea to seek leading edge real estate advice as to selling your home.
For one thing, they’re in the best position to tell you if it’s worth it to sell. The top considerations realtors use include the area, population, buyer/seller density and so on. With an agent’s help, you can come away with a great deal on your property, even if prevailing conditions suggest otherwise.
Bottom Line
The Boston real estate market is perhaps one of the higher-risk areas in the country. With its fluctuating median price, more condo sales, lower new constructions, and a drop on month-on-month property listing, Boston housing swings pendulously between a buyer and seller’s market.
That’s not exactly a terrible thing. It only calls for more caution with property sale and purchase decisions. With that logic, now might not be the best time to put your Boston home for sale.
If you’re still unsure, the highlighted tips above could nudge you in the right direction. By considering them, you can make the right decision for your property.
FAQs
Are Home Prices Dropping in Boston?
From all indications, yes. Several reports have shown that Median home prices in Boston have been on a steady decline since mid-2022. It’s a possible result of the hike in mortgage rates implemented around that time.
What Months Are the Best to Sell Your Home in Boston?
Summer months, with spring months a close second. However, it’s generally best to avoid listing a property around the holidays.
Is the Boston Housing Market Overpriced?
No, the Boston housing market isn’t overpriced, especially clear when you consider the neighboring housing market in Washington. Granted, Boston remains a high-value real estate area, but the expensive costs are always fluctuating, rather than perpetually rising.
Looking to sell your home? Let’s get you started right at Ardor Homes Massachusetts! Our expert team of real estate professionals can help take care of the listings and consultations. Don’t wait, contact us today to get a great deal for your property.
In her 25-year career, Steph Wilkinson has been involved in the acquisition, marketing and sales of over $3 Billion dollars of residential real estate. A number of years ago, Steph transitioned into Brokerage Leadership for National real estate brands and tech start-ups. She has served as a Business Strategist for real estate agents and brokerages alike and is also a real estate coach and trainer. In her new role with the Iconic Team, Steph will be responsible for the growth of the team and will be working with all of our agents to increase their productivity and bottom line.
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