In 2023, the large majority of home buyers and sellers were playing the waiting game. With rapidly increasing interest rates, that eventually hit 8% at the height, everyone was waiting for listing and sales prices to decline.
On average, the Boston condo market sees a YoY appreciation between 5-8% in AVG sales price. In 2023, the average YoY appreciation was essentially flat - up or down 1-4% in the city of Boston. While Boston buyers were hoping for an actual decline in sales prices, what they got was a decline in the rate of appreciation on a YoY basis and a departure from overly ambitious pricing by sellers and more of a willingness to negotiate.
As we begin 2024, interest rates have fallen off their peak of 8% (current 7 year Jumbo ARM is hovering at 5.75% today) and we are seeing an increase of buyers in the market. Heading into spring, we are anticipating that a competitive bidding environment coupled with low inventory will drive sales prices higher. Boston's condo market saw the lowest inventory it has seen since 2009, experiencing an average decrease of 23% in inventory from 2022 to 2023 across all neighborhoods.
The winter months are always our favorite time to make good deals for clients as the spring always brings more competition and escalating prices. We are seeing flexibility in certain segments of the market. Jillian was able to secure a $1,800,000 property for $1,630,000 with a lender credit for a points buy-down lowering her buyers' rate to 3.875% in Year 1 and 4.875% in Year 2. Megan was able to secure a property for buyers that was listed at $3,500,000 for $3,325,000 in the Back Bay - a 5% discount on a prime, completely renovated asset on the second block of Beacon Street.
The moral of the story, if you are thinking about buying in the next 12 months, start looking now and expect to be patient! With limited inventory, there is not going to be a ton to see on any given weekend throughout the Spring Market. If you are hoping to move by August, now is the time to start looking. Happy 2024!
The story of 2023 was high interest rates and limited inventory. There was an average decrease of 21.85% in number of homes sold across the markets showcased in the above graphic for condo and single family homes.
Boston's home prices keep rising! With limited inventory, Boston's condo market experienced a 3.45% increase in median sales price from 2022 to 2023.
Data shows how much of an outlier 2021 truly was. With current inventory at its lowest point since the 2008 crash, we are anticipating a competitive spring market.
Price per square foot (PPSF), is a critical metric used to determine home values based on comparable properties. In Boston, the AVG PPSF for a condo rebounded from a 2.3% dip in 2020 and landed at $898/ft at the end of 2023.
