2020: A Reflection in Real Estate
Believe it or not, this was a pretty good year for real estate in Boston, considering the circumstances. Boston’s market runs on a seasonal cycle. The spring usually sees the highest number of new listings, with early fall seeing the most units sold. Things were different this year.
The year started off in January and February as expected, but as things tightened up, and people began to worry about the plague, everything slowed down, as I’m sure you’ve experienced.
For all Boston neighborhoods, there was over a 50% decrease in new listings in March and April. That’s a pretty big deal, considering the spring market is when the majority of new homes come up for sale. We didn’t have a spring market this year.
However, that turned around by mid summer. In June, we had a surge of new listings, outpacing the same time last year. Interestingly enough, the peak of new listings in 2020 came in mid September just after labor day. It’s as if we had a fall market instead.
Overall, for the greater Boston area, sales were up 38% while new listings were down 29%. An increasing demand with less inventory means only one thing, a much more competitive market, driving prices even higher. The average sale price for all units (single family and condominium) rose over 12% from 2019. That speaks volumes, considering the water cooler talk is that everyone’s fleeing the city for the burbs. While there are people doing just that, it’s not a majority. A big motivator this year, has been record low interest rates. As of earlier this month, you could get a 30 year fixed rate for under 3%.
The specific areas most impacted by the pandemic were rentals and high end sales (over $2M).
New listings over $2M were almost non existent this spring. This market fell short of 2019 almost every month, until the fall and we saw a spike of new homes listed for sale in mid September. The other thing we need to look at is sales. We started 2020 outpacing the previous year, but that quickly dropped with lockdowns in place, and didn’t really recover. There was a slight increase in sales in September, but were overall worse than 2019.
Rentals took a hit this year. Ending the winter with so much uncertainty around employment, education and life in general really affected prices. Colleges and employees working remotely meant there was less of a need to live in the city. While rents have dropped, I think many appreciate that in most cases, landlords are paying the broker fee.
While this was a year like no other, I think we’re all ready for 2021. My prediction is that we will get back to normal. Between new treatments, repurposing old treatments and now a vaccine, we’re on track for a great 2021. It’s projected that interest rates will remain low, and I expect that with rising prices, more homeowners will be incentivized to put their homes on the market.
If you’ve been thinking about selling, 2021 is your year! Shoot me an email or give me a call and I’d be happy to discuss how we can get top dollar for your home. Also, If you have any questions about real estate in general, I’d love to hear from you! I can be reached at willy.charleton@nemoves.com or 617 528 8461.