This New Year is bringing mixed feelings for Boston area buyers and sellers. Although 2020 was a rough year for many due to layoffs and pitiful help from the government which had caused the shuttering of many businesses and accompanying layoffs, there were bright spots here and there in the economy and in Boston's real estate market. It is true that home sales outside Boston really exploded in 2020. Where buyers would think they could pick up a cheap home in the outlying regions, they instead found themselves in bidding wars and escalating prices in the unlikeliest of places. Myself, I had a buyer looking out west in the Leominster area. I told my client that houses in the area in good condition were going about $100,000 over their assessed values. My client is now a proud owner of a Leominster home. So, when I say I will serve my clients anywhere in eastern Massachusetts, you know I'm telling the truth!
Homeowners in Boston have enjoyed a great, seller's market. In fact, some parts of Boston have enjoyed a lengthier seller's market with terrific appreciation thanks to bidding wars (multiple offers) within days of their listings coming on the market. However, there's a saying, "All good things must come to an end". Although several neighborhoods of Boston are still experiencing a seller's market where listings are still in short supply, other areas are in a balanced market where the number of available listings (supply) and buyers (demand) are considered to be in balance. On the other hand, the flight of city office workers now getting to work remotely from home has increased the number of homes for sale in Boston to a level that has pushed the other half of Boston's neighborhoods into a buyer's market with downward pressure on prices. For sellers who have bought in the past couple of years and wanting/needing to sell, they are already looking at losing money. What this means for all sellers is that now is still the time to list their homes on the market at a reasonable price because even those who are already having to price lower than desired will see their prices drop even further as time moves on. Those who have waited for 2020 or 2021 are now feeling the financial pain of waiting too long to sell. Fortunately are those whose seller's market has extended even through 2020! But they, too, should count their blessings and sell NOW before they find themselves trying to sell in a buyer's market of downward spiraling prices.
The graph included here shows how real estate markets are cyclical. Prices and activity topped out by 2005-2006 which is illustrated by the high numbers of homes that failed to sell in 2006. On the other hand, prices began to rise 2010-2012 as inventory began to dry up. Generally speaking, 2014-2018 were good years for sellers. But as you can see from the graph, homes that are not selling are on the rise again. This means one thing only... Boston is heading into a buyer's market.