It’s been a dramatic month in the local Boston real estate market. We’re seeing things happen that we haven’t seen in years… Namely, much higher interest rates. Most of the action in the market is being driven by a turbulent economy and the aforementioned rising rates: two things which give buyers great pause in continuing their search for housing.
That said, we’re seeing a remarkable time for headstrong buyers who know the new power they have in today’s market. When one goes against the herd, conventional wisdom suggests that it can pay dividends.
We typically refer to our fall market as the time period between September 1 and Thanksgiving. Here’s a snapshot of listing activity for the first half of that period compared against the previous three years.
Anecdotally, we’re seeing some “vulture buyers”across our core neighborhoods who feel fairly great about the deals they’re striking to buy real estate in Boston. Conversely, we’re seeing sellers who acknowledge that their “hand” is not as strong as it was just a few months ago. We contextualize this by looking at “months of supply.” This metric is as such:
Seller’s are willing to listen to the music for the first time in many years (outside a brief Covid blip in 2020). Capitulation means deals are still happening but getting the mass of buyers to transact at this moment is a case study in human emotions taking their toll on market volume. We expect prices to continue to depress for the rest of the year and into 2023. To be clear, we mean “depress” in the literal sense, “to pull down.” Depressing Boston real estate prices merely means that the fire and brimstone times of yore have come to a rather abrupt halt. Other areas of the country are likely to see 10, 15 and 20 percent corrections. That is very unlikely here. If you own a strong asset, there are still willing and able buyers to take you out, albeit at a 5-ish percent discount versus what you might have traded for in the spring of 2022.