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Boston, MA: Real Estate Market & Trends 2016

Published on Wednesday - August 17, 2016

The Boston real estate market continues to gain ground as one of the hottest areas to own property. Home prices skyrocketed beyond the national average in 2016, as the median home price for Boston real estate in the first quarter was an astonishing $378,500; compared to the national average of $215,767. While very appealing for Boston investors and homeowners, even better is Beantown’s home appreciation rates, which remain some of the most competitive in the nation. That said, the trend should continue in the second-half of 2016, setting up the Boston real estate market for a big year.

Boston, MA Real Estate Market Statistics:

Boston real estate investment

The Boston real estate market has seen mild gains in home appreciation so far in 2016. The first quarter saw rates of 1.0 percent compared to the national average of 6.1 percent, while the last three years has seen an appreciation rate of 13.9 percent for Boston real estate. The appeal of Boston real estate investments is found in total equity gains, which have exploded in the last couple years. For those looking to invest in the Boston real estate market, the following provides a breakdown of appreciation rates in previous years:

  • Homes purchased in the Boston, MA housing market one year ago have appreciated, on average, by $10,187. The national average was $15,781 over the same period.
  • Homes purchased in the Boston, MA housing market three years ago have appreciated, on average, by $64,281. The national average was $49,356 over the same period.
  • Homes purchased in the Boston, MA housing market five years ago have appreciated, on average, by $81,064. The national average was $68,727 over the same period.
  • Homes purchased in the Boston, MA housing market seven years ago have appreciated, on average, by $129,577. The national average was $59,758 over the same period.
  • Homes purchased in the Boston, MA housing market nine years ago have appreciated, on average, by $40,273. The national average was $16,435 over the same period.

As shown above, equity gains for Boston real estate begin to overthrow the national average after the three year mark, which saw gains of $64,281. For Boston investors and homeowners, the real advantage has been year seven when total equity gains reached their full potential. Overall, price appreciation and principle payments have boosted total equity growth since the recession.

As of June, there are currently 779 properties in the Boston area in some stage of foreclosure. According to RealtyTrac, the number of Boston foreclosures in the month of June was nine percent lower than the previous month and eight percent lower than the same time in 2015. Additionally, the number of REO properties decreased 37.5 percent from the previous month while falling a 50 percent from the same time last year.

Boston, MA: Real Estate Market Summary:

Boston housing market

  • Current Median Home Price: $378,500
  • 1-Year Appreciation Rate: 1.0%
  • 3-Year Appreciation Rate: 13.9%
  • Unemployment Rate: 4.0%
  • 1-Year Job Growth Rate: 1.9%
  • Population: 667,137
  • Median Household Income: $75,667

Boston, MA: Real Estate Market (2016) — Q1 Updates:

Boston real estate investors

The Boston real estate market has been a safe haven for both home price increases and equity gains. On the flip side, the Boston housing market continues to remain lower than the national average in terms of affordability, which bodes well for Boston investors and homeowners. In fact, the ratio of income paid to monthly mortgage payments in the first quarter of 2016 was well below Boston’s historical average, coming in at 12.1 percent for Q1. That said, the Boston real estate market is actually more affordable than most markets by a slight margin.

More aspects boosting home prices in the Boston area are positive employment and job growth rates. Unemployment in Boston is actually better than the national average and improving, currently sitting at 4.0 percent. That represents a one-year decrease of 0.6 percent. However, the job growth rate for Boston needs to improve. For the first quarter of 2016, the job growth rate was 1.9 percent. Although employment has somewhat eased in Q1, it remains positive, which is always a good thing for Boston real estate investments. According to the National Association of Realtor’s State Economic Activity Index, the economy of Massachusetts has outpaced the rest of the nation,4.2 percent and 3.1 percent respectively. The last three years have seen the Boston economy improve at a rate of 14.2 percent, whereas the national average was 10.5 percent. New housing construction is another aspect that makes Boston real estate investing appealing. The current level of construction is 27.7 percent above the long-term average, and the number of single-family housing permits during Q1 was 12.1 percent.

Moving forward, the National Association of Realtors forecasts the Massachusetts market to see weaker price growth in the next 12 months. Price expectations for the Boston real estate market in the first quarter was 3.5 percent, which is slightly below the national average of 3.8 percent. That said, the Boston real estate market is primed to carry on its dominance in the second-half of 2016.

*The information contained herein was pulled from third party sites. Although this information was found from sources believed to be reliable, FortuneBuilders Inc. makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. Any reliance on this information is at your own risk. All information presented should be independently verified. FortuneBuilders Inc. assumes no liability for any damages whatsoever, including any direct, indirect, punitive, exemplary, incidental, special, or consequential damages arising out of or in any way connected with your use of the information presented.

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