Boston’s real estate market has boomed over the past year. According to the Greater Boston Real Estate Board (GBREB), average home prices in June rose 11% from June 2021 to a record $900,000.
Prices for luxury homes in Boston rose at an even steeper pace, aided by a surge in luxury condominium development. 16.1%, up nearly 30% from June 2020.
But like other mid-sized U.S. cities from Austin to Portland, Oregon, it surged in popularity in the aftermath of Covid-era restrictions as people reassessed their need for housing, but the market’s decline Signs are starting to appear. Rising mortgage rates, inflation fears and volatile stock markets are starting to hit Boston buying.
The number of single-family homes sold in Boston in July 2022 fell 18.6% year-over-year, the lowest volume in over a decade. Meanwhile, condo sales fell by 25% over the same period. GBREB reported that pending sales this summer also saw him drop 10%.
While these declines aren’t the steepest in the US (Florida’s main market is far worse), bubble fears are starting to emerge.
“Many U.S. markets are now considered ‘overvalued,’ so Boston is no exception,” said Thelma Hepp, deputy chief economist at real estate analytics firm CoreLogic. , Boston housing growth has slowed from 13-14% to 10% annually, and we expect that number to reach 6% by the end of 2022, and could halve by 2023. increase.
The enthusiasm of some buyers remains. With hotel developments branded by Four Seasons, St. Regis, Raffles and others, ultra-luxury condominium projects have sprung up across the city, continuing to attract UHNW buyers (both local and international) and pushing the Top of the Best. -market price. For example, Raffles has an average unit price of $3.8 million, nearly double the average for Boston’s top luxury market.
At the same time, previously less favored neighborhoods like Dorchester and less-central neighborhoods like Somerville are attracting seasoned Bostonians seeking larger spaces at lower prices.
Casey, along with her husband, Joey (who didn’t want to give their last name), recently bought a three-bedroom, 1,900-square-foot condo for just over $900,000 in Dorchester’s increasingly popular Savin Hill neighborhood. I bought it. Having rented in much more expensive Cambridge, the couple is an example of Boston’s current buyers. Casey works in healthcare and Joey in finance, and both have hybrid work arrangements with substantial salaries and work from home.
“We looked around town and at the Dorchester price point we were able to get three bedrooms instead of two,” says Casey. “This area has a large gay population and is within walking distance to the beach.”
Coldwell Banker real estate agent Greg Dekermenjian says Casey really epitomizes new buyers in Dorchester, the traditionally African-American neighborhood of Boston’s largest neighborhood.
“The Dorchester is priced between $500 and $700 per square foot,” he says. This is less than half of historically upscale areas such as Back His Bay and South End. Dorchester still has many traditional housing stock styles found throughout Massachusetts, such as the “three-story” home that Casey and Joey purchased.
The three-story building is also at the heart of East Boston’s innovative residential plan. The East Boston Community Development Corporation will purchase 36 mostly his three-story buildings, including 114 rental homes, to keep prices affordable. Neighborhood group trusts operate the development. The project, due for completion later this month, will be the first project east of the Mississippi River.
Despite these historic homes, Dorchester, like the rest of Boston, has experienced a surge in large-scale development, and its new high-end homes are slashing average sales prices across the city. The most notable Dorchester development is a 1.56 million square foot project with approximately 600 residential units, including retail space, parks, plazas and four laboratory buildings (the latter of which is Boston in response to the ever-expanding biotechnology industry), as well as spanning three residential buildings.
The project, still in the planning stages, will form a triangle with two equally ambitious redevelopment plans, including Southline Boston, which, when complete, will house the former Boston Globe headquarters.
WS Development’s massive Boston Seaport, a 33-acre mixed-use development across the city and near the financial district, anchors Amazon (soon to occupy over 1 million square feet of commercial space) It has tenants and approximately 2,200 rental and sales towers. total unit. That includes the St. Regis, which starts at just over $2 million for a one-bedroom apartment.
Dekermenjian said numbers like this don’t reflect Boston as a whole, and there are still pockets of affordable prices. For example, Meghan, who doesn’t want to reveal her last name, moved with her husband and her two children into her renovated three-bedroom home in Somerville two summers ago. rice field.
“That was our budget. We fully assumed we would have to settle in suburbs like Belmont, Arlington, and Lexington,” she says. “I still can’t believe I can not only stay in Somerville, but my kids can walk to school.”
The Boston area is home to Harvard, MIT, and Boston University. About 150,000 students come to the city each year. Their parents form an important part of Boston’s real estate market.
The city’s population grew by nearly 10% between 2010 and 2020 to just under 700,000.
What you can buy at . .
$935,000 Dorchester 2 Bedroom Penthouse Duplex (Caldwell Bunker).
$1.399 million This two-bedroom, two-bathroom, 1,285-square-foot condo is a converted 1890s red-brick townhouse between South End and Back Bay with high ceilings, hardwood floors and an outdoor deck. are (Caldwell Bunker).
$17 million Six-bedroom home in Back Bay designed by Louis Comfort Tiffany (Christie’s International Real Estate).