Posted on Sept. 23rd, 2014
There are two things that are driving Boston’s real estate market nowadays. These are the low supply and the high demand in the market. The 5 current trends dominating the real estate market in the area these days include:
1.Low inventory
David Bates was the first one who got to this trend and has stayed keeping it since then. Looking at the Boston real estate market, it can be seen that there are only few single family homes and condos that can meet the demand in the area. There is also only a little for-sale offered, in addition, the place’s poor planning remains the same even after decades.
2.A whole lot of new luxury apartments
There is a reason why there is a huge lacking in the city’s new for sale developments and offers. That is because most of the expenses are focused on the development of luxury apartments. In fact, there are not only lots of these in the city. It could already go beyond too many. Hence, it takes a long while before complexes are filled. Some of the luxury rental towers even turned to offering more for-sale condos in their inventory.
3.Because of the bidding wars
Even with the trend above, the supply of new condos is still not enough to meet the demand. Hence, this often leads to bidding wars. Those who are on the lookout in the market shows up in open houses complete and prepared with all the cash or financing, which happens most of the time. At times, these people would even go beyond what the seller’s Boston real estate price offer is. This trend may be a bit tough for the buyers, but it is a significant benefit in the economy of the Boston’s real estate and of course, of the buyer’s.
4.Always over-asking
Most buyers in the Boston real estate market are asking which results in driving up the price even more. But not only that, over-asks coverage also contribute to driving up the hysteria and hype surrounding the city’s housing market. Vibrancy in the city’s real estate is a real thing. However, one would wonder what portion of it is a self perpetuating cycle and the part that is more likely an invisible-hand work.
5.Tougher lending
The status of the lending part of Boston’s industry has something to do with the low inventory of real estate for sale in the market. It all starts with the lending terms staying tougher as it was even before 2007. Hence, the people in the city find it harder to obtain a home loan and even get terms that will allow them to end the victor in bidding wars. It results in more people being forced to search in the rental market, which leads to negative effect in Boston’s real estate inventory. Thus, it makes the sales price escalate more.
But, there’s more this coming 2015! Bidding wars may be further dampened and there will be less over-asks and more tenants instead of being full-time home owners. That is because the Federal Reserve signaled that there will be a further rise in the rates as 2015 approaches.