2020 Real Estate Trends: Boston
Determine 2020 mega real estate trends affecting the residential real estate markets in three areas: Connecticut, Providence, RI and Boston, MA that will focus on the key data points of: What types of homes are selling (e.g., affordable, new construction), and who is buying them (e.g., first-time buyers, millennials, etc.)? Are there any trends in home loan/mortgage lending in each market? For example, an uptick in refinancing activity? Uptick in home construction loans?
- One trend in the residential real estate market in Boston involves condos and apartments. Currently making up 72% of available homes for sale, condos, and apartments are expected to continue to be the most purchased types of residential real estate.
- Another trend is a continued decline in the sale price of residential real estate due to a drop in the number of single-family homes, condos, and apartments being purchased in Boston. According to a Boston real estate report, single-family home sales in November 2019 showed a 35% year-over-year drop from 2018. Additionally, condo sales showed a year-over-year drop of 8.8% The median sales price of a single-family home in Boston demonstrated a 0.7% year-over-year decline between November 2018 and November 2019, while condos demonstrated a year-over-year decline of 0.8%.
- A residential real estate trend that will impact, but will not be limited to, the greater Boston area, is the desire of MIllennials for houses that are smaller, more modern, and more manageable than the McMansions popular with Baby Boomers. According to Zillow, the size of the average American home has shrunk more than 80 feet since 2015 and is predicted to continue to shrink.
- Another trend in the Boston residential real estate market is a slowing construction pace. The number of building permits for residential construction, including rental properties, fell by almost 25% in 2019 compared to 2018.
- Trends in Boston residential real estate that have been trends for years and shows no sign of real change in 2020 are the extraordinarily high sales prices, continually high demand combined with too few available properties, especially the types of properties Millennials are interested in, and a horrible to commute due to a large population of people in a condensed area.
- Boston, and Massachusetts in general, have foreclosure rates that are higher than the national average that is not expected to drop in 2020.
- A big trend in the Boston real estate market is the preference of many to rent homes, condos, and apartments, rather than buy. Around 67% of Boston residents rent rather than buy their homes, giving Boston one of the highest rent versus ownership rates nationwide.
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