Boston real estate market finally turning a corner?
Now that full July market data for the national, Massachusetts, and Greater Boston real estate markets has been released (plus I reported here about the downtown Boston condo market), we are seeing more and more positive signs in the real estate market. Some of the recent news coverage on both the state and national level has been very interesting:
- Home prices in major US cities rise for a second month (Wall Street Journal - need subscription)
- A strong gain in new-home sales in July (NY Times)
- Mass housing market shows signs of perking up (Boston Globe)
- July home sales climb 12 percent in Mass, price declines smallest in over a year (Banker & Tradesman - need subscription)
- Home prices, sales on rise in Boston area (Boston Globe)
So is it all good news? Is now definitively the "right time to buy"?
For the first question - Not yet. While we are seeing a lot of good news, it is not all good news. Prices in Massachusetts are still falling year over year (but at a slower rate for sure). Although the 2nd quarter Boston real estate statistics shown below do not include the improving July data, you can see this clearly. Signs have been pointing more positive each month and are signaling a bottom, but we aren't quite at the bottom just yet (price-wise). As sales rise and the market reaches an equilibrium, we'll see where prices finally level out. I would guess we are pretty close now, and typically you can't recognize an exact bottom until after it already occurs anyway.
A potential concern is the expiration of the $8,000 first time homebuyer tax credit on November 30th, which has been driving a lot of sales around the country in the sub $400K market segment. In the Boston real estate market we haven't seen as much of an impact as other parts of the country because prices are higher and many buyers make too much money to qualify, so we probably won't have as much of a "drop-off" effect. Plus there have been talks about extending the credit for another year, so the credit may continue into 2010 anyway.
Here are the stats mentioned above...
Greater Boston Single Family Home Statistics in Q2 2009 (by town):
Greater Boston Condo Statistics in Q2 2009 (by town): 
Overall, seeing signs that the real estate market and economy are improving (even
though unemployment is worrisome, we are very close to being officially
out of the recession as GDP growth turns positive) is very welcome. Now that we are at, or close to the bottom, brings me to my second question...
"Is now a good time to buy?"
To that question, I would say "probably", if your personal and family circumstances are leading you to buy. I'll always maintain that buying a home is a personal decision that can be right for some people and wrong for some people based on personal circumstances at the time. A home is first and foremost just that - a home. Can it also be a good investment? Yes, but the first criteria should always be selecting a good place for you and your family to live. That being said, if you have been watching the market and waiting for the "right time" to buy, this could be it. The Boston real estate market is more affordable to get into than in a long time, mortgage rates are at historically low levels, the opportunity for the $8000 tax credit is expiring, and trends are looking more and more like we'll be bottoming out and heading up soon (although I suspect we'll be looking at a long gradual recovery without any large price increases for a while). All of those things equal good opportunity.
If you have any questions about the market or whether or not its right for YOU to buy a home or condo in Boston, I am happy to chat. Just contact me and ask away!
What do you think of the market? Comment below!
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