What is happening in the Boston housing market?
The housing market has been on a straight-up trajectory over the last 12 years and because real estate has an up and down cycle, it would be safe to say the housing market is in for a change. Granted the market has been stupendous with regards to prices. Sellers have been rewarded with very high sale prices because of two reasons.
- Reason one: inventories have been very low, supply and demand. When properties are not available the higher the costs and the more in demand hence bidding wars.
- The second reason: the interest rates have been historically low which means Buyers can afford more of a mortgage. This is the reason for over-bidding on a property because the Buyers are running scared and will do just about anything to procure a new home.
So what will happen in the very near future?
Now, in September, we are already seeing many more properties coming on the market for sale and the Feds have announced the prime lending rate will be adjusted before the end of the year. More inventories mean more competition for the Sellers and if the Seller wants a sale they will have to either lower the price of the property or stay on the open market much longer. This is directly the opposite of what has transpired in the last six months. The Seller should be advised to make the asking price a fair market value and not pie in the sky pricing! An increase in the prime lending rate will increase the mortgage interest rates where Buyers will now be able to afford less of a mortgage. Buyers will not offer over asking price as often as it happened in the past few years. More inventories, more competition, higher interest rates equal a change in the market.
These changes are inevitable but it doesn’t happen overnight. In spite of the pandemic real estate sales have been historic. In this writer’s opinion, the market will be different in the first quarter of 2022 than it is now. All the signs are pointing in that direction.
Now would be the time to market your home before the market changes to a” Buyer’s Market”.
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