What is going on with the Boston real estate market?
In the Greater Boston metro area, the real estate market is in the midst of fluctuation. While homebuyer confidence is on the rise, inventory levels are in decline. According to the Department of Numbers, home listings and inventory in the Hub sat at 21,114 properties as of October 8, 2012, which is down 2.3 percent from September 2012 and down 22.6 year over year.
Typically, when inventory levels are low, the median asking price tends to rise. However, an uptick in Boston has yet to be recorded, as the median asking price as of October 8 remained at $329,900, which is up 0.1 percent from September 2012 and flat year-over-year.
Even if homebuyers wanted to invest in new properties, they may not have a plethora of options, which could keep a higher portion of people on the sidelines. Boston Globe contributor Scott Van Voorhis says he foresees the lack of inventory as a major issue that could only get worse. He says buyers too often battle it out in multiple bid situations for the few half decent, well-priced houses for sale in Boston.
What's more, the source reports that the vacancy rate for apartments along the 128 beltway has dropped below 3 percent to an extremely tight level. This caused rents to soar, and many tenants have chosen to avoid rising by remaining in their current location. Van Voorhis says that during uncertain times, people tend to stay in place, and today the trend to stay at current residential locations could wind up killing the real estate recovery taking place across the nation.
The effects of low inventory are being seen statewide, with towns like Wellesley showing a median rent of $3,547, the Boston Globe reports. Towns like Plainville and Framingham aren't any better either, with median rents over $2,000, according to the source.
When the housing market is down, buyers tend to rent. But with average rents soaring to new heights, many Boston residents aren't sure what their next move should be. It might be worthwhile to shop the for-sale properties that are currently on the market as starter homes while the rest of the market catches up, and invest in these houses so they are easier to flip when the time is right.