Rising Boston home prices creating a seller's market
When the real estate market crashed, Boston’s market crashed along with the rest of the country, but recent reports show that this may be changing. This year has shown steady increases in prices for those buying Boston real estate, and November’s report indicates the trend is continuing.
Boston home prices increased throughout the first weeks of November. On November 21, the average listing price was stated to be $965,489, which is 0.2 percent higher than the prior week and a full 9.6 percent higher than the last week of October. With an average price of $757 per square foot, home sales price is 10.5 percent higher than what it was around this time last year.
In the downtown area specifically, the number of sales this year have outpaced the previous three years significantly. Interestingly, in spite of all of these increases, the actual median sale price of $517,760 showed a slight dip, dropping 4.1 percent over last year.
Increases Not Steady Throughout All Neighborhoods
While increases in Boston home prices may be the trend in the city as a whole, this is not necessarily true in all neighborhoods, particularly in the five most popular. For instance, the South End reported a decrease of 1.6 percent from the second week of November into the third. Dorchester also saw a decrease of 1.9 percent. Boston home prices in Beacon Hill held steady in mid November, while prices in Back Bay and South Boston both rose. Back Bay saw the biggest increase of these top five communities, with prices increasing 3.1 percent.
Rising Prices May be Due to Lack of Inventory
The prices of homes in Boston are steadily increasing due to a lack of properties on the market. On November 18 of 2011, there were 858 properties, including condos and single-family homes, listed for sale in Boston. That number, one year later, was just 417 representing a 51 percent drop, which is a tremendous drop in just one year. The lack of properties on the market means that those that are listed will sell quickly and for a higher price.
Lack of Inventory and Rising Prices Make a Seller’s Market
Because of the lower than average inventory and higher than average prices, Boston is currently a seller’s market. Those buying Boston real estate will need to act quickly when a home that meets their needs goes on the market, because it is not likely to last long.
If these trends continue, those buying Boston real estate will have less negotiating room when they see a property they are interested. If the inventory continues to drop, you can expect to see a continued increase in home prices. However, these rising home sales prices and the appeal of a fast sale in a seller’s market may cause more people to list their homes in the coming spring selling season. This could cause the inventory, demand and prices to even out. Analysts expect prices to remain steady and continue small increases, even if the inventory begins to catch up. Should this be the case, it would mean that this a good time to consider selling a home in the Boston area.