2023 was an interesting year in Boston real estate. The rapid rise in interest rates seemed to be a leading cause in the lack of available homes for sale (i.e. inventory). We heard some would-be sellers lament that while they would prefer to sell and buy something larger, the interest rate spike meant that their monthly payments would be substantially higher just to move into a home of similar size.
Interest rates have been improving and we're hoping/expecting market improvements in 2024!
Looking at some of the neighborhoods in Boston's core, the chart above shows that average and median sale prices were up in many areas in 2023. However, the number of transactions was sharply lower - for example, -38% in East Boston, -36% in Charlestown and -35% in South Boston.
One of the strongest segments last year was the luxury condo market - prices were up, as well as the number of completed sales. One likely explanation is that luxury buyers are less impacted by higher interest rates - they either have cash available or capital sources other than traditional mortgages. These buyers also may be looking at the investment value of "blue chip" Boston luxury real estate, especially amidst the uncertainty of the stock market.
The chart above is a telling illustration of the lack of inventory in Boston's condo market.
This Appreciation Rate chart shows that Boston's real estate has continued to hold its value. We are hopeful that interest rates will continue to come down in 2024 and that we'll see more opportunities for both buyers and sellers.
For the full annual report, click here: LINK Boston Annual Sales Summary 2023