The Boston real estate market is developing into an investor’s paradise in 2016. Home prices and appreciation rates continue to eclipse the national average, which has rewarded Boston real estate investors and homeowners handsomely during the first quarter of 2016. Conversely, the Boston housing market remains one of the more affordable in the nation, as homeowners continue to pay far less than the national average. With several indicators working in its favor, the Boston real estate market is primed to make a big splash in 2016 and beyond.
Boston, MA Real Estate Market Statistics:
According to Trulia, the average Boston home is worth about $422/sqft. That price represents a decrease of eight percent over the same period last year. The median home price for Boston real estate was $378,500 during the first quarter of 2016, compared to the national average of $215,767. Along with rising home prices, appreciation rates have surpassed the national average, as home values have appreciated 13.9 percent during the last three years (12 quarters). That said, appreciation and principal payments in the last three years have boosted total equity growth for the Boston real estate market since the recession. For a more comprehensive breakdown of equity, refer to the following:
- 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.
According to RealtyTrac, the Boston real estate market consisted of 779 homes in some stage of the foreclosure process during the first quarter of 2016. The number of new foreclosure filings by foreclosure type is as follows: Auction homes have decreased by eight percent over the past year; REO properties have decreased by 50 percent over the past year.
Boston, MA: Real Estate Market Summary:
- 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
The Boston real estate market began 2016 like it was shot out of a cannon, as home prices and equity gains surged past the national average during the first quarter. One factor influencing the Boston real estate market in a positive manner has been the local economy. Although job growth has remained stagnant compared to the national average, the unemployment rate has vastly improve and is now better than most of the country. In addition, the last three years have witnessed the local economy improve at a rate of 14.2 percent, whereas the national average advanced at a slower rate of 10.5 percent.
Along with an improving economy, new housing construction in the Boston area continues to outpace the national average. The current level of construction was at 27.7 percent above the long-term average during Q1, while single-family housing permits increased 12.1 percent. In addition to new home construction, the number of foreclosures, including REO properties, in the Boston area have fallen compared to the previous year. For Boston real estate investors and homeowners, this could spell opportunity in the coming months, as home prices and equity gains continue their upward trajectory during the second-half of 2016. On the flip side, a decrease in foreclosures in the Boston area could lead to improvements in home affordability. The average monthly ratio of income paid to mortgage payments for the Boston housing market during the first quarter was 12.1 percent, compared to the national average of 14.5 percent. That said, the Boston housing market is actually one of the more affordable in the nation.
Boston, MA: Real Estate Market Review (2014)
The Boston housing market continued to demonstrate an increased propensity towards stability in 2014; that was compared to other metropolitan areas of a similar demographic. In the face of historically high appreciation rates, Boston real estate gains are starting to show signs of slowing down, once again suggesting a period of stabilization.
However, price gains were not the only thing leveling off in the Boston real estate market in 2014. It would appear as if inventory levels did the same. In recent memory, tight inventory has limited buying potential, but the number of homes for sale in 2014 simply didn’t meet demand. Fortunately, a shift in supply changed that towards the fourth quarter, as the Boston housing market stayed relatively balanced (or at least a better than last year).
While affordability remained an issue for some homeowners in the area during 2014, Boston real estate investors turned to foreclosures. In fact, the median sales price for a non-distressed home was $511,500 during the first quarter, while the median sales price of a foreclosure home was $330,000, or 35 percent lower than non-distressed home sales — a savings of more than $181,000 for Boston real estate investors looking to capitalize on the foreclosure market.
According to RealtyTrac, Boston had roughly 696 foreclosures on the market in 2014, each of which represented an investing opportunity. Boston real estate investors also recognized that those numbers were on the rise. Over the course of a month, foreclosures rose 16 percent during the first quarter of 2014, compared to the last 12 months which witnessed foreclosures increase by 54 percent. An overwhelming majority of the foreclosures within the Boston housing market were of the pre-foreclosure variety. In fact, pre-foreclosures during 2014 made up 64.9 percent of the entire foreclosure market. That was a 140 percent increase over the course of a year. In a distant second, auction foreclosures represented a 32.4 percent of the market, while the remaining foreclosures were bank-owned. Bank-owned foreclosures were the only distressed properties that declined year-over-year. Boston real estate investing, as a result, has seen an uptick in the acquisition of distressed properties.
Boston real estate investing has benefited from a hot housing market. While price gains have begun to temper, the Boston real estate market is still poised to lead the nation in recovery.