How is the Boston real estate market in 2022? LINK Boston's second quarter report shows that Boston's condo market is still strong. Condo values in many of Boston's core neighborhoods (which LINK refers to as "Citywide") remain high, which is illustrated in the 20 year price index (appreciation rate) chart.
Looking at individual neighborhoods, most saw average prices rise in the past quarter. Perhaps most notable is the performance of the "Luxe" market (i.e. luxury condominiums). The COVID-19 Pandemic had a strong and severe impact on the luxury condo market, as would-be buyers of those units shifted their focus to properties in the suburbs and vacation homes. However, the data shows a recent bounce back, with healthy price improvements; we are seeing increased demand from luxury condo buyers here in Boston.
The total number of sales in most neighborhoods is notably lower. However, that seems primarily due to the lack of inventory.
While each real estate market is unique and different, one of the issues looming over all markets is the future of mortgage rates. Already this year, they are up substantially - many are predicting that the Fed will continue raising target interest rates, which will likely further push mortgage rates up. The higher the mortgage rate, the higher the monthly payment - so increases can impact buyers' purchasing power, since one of the main ways people set their budget is based upon their available monthly budget for housing.
We're also seeing the steep, rapid decline of the stock market as having an impact on the real estate market. Some buyers with substantial investments/savings in the stock market have seen the funds that they were planning to use as a down payment be diminished by the stock market decline, which impacts purchasing power.
Overall though, we cannot help but be optimistic about the future of Boston's real estate market. As a historic City that also serves as a hub for many industries, we still see demand from buyers and renters locally, nationally and internationally.