Boston’s real estate market got off to a sluggish start in 2024. Total Boston real estate sales are down -10.62% compared to 2023 and down -33.75% compared to 2022 on account of rising interest rates. Still, with housing inventory so low, median sale prices for all property types are up +9.81% in March year-over-year and showing little signs of going down. Here are the trends affecting the real estate sales market in Boston.
Boston Real Estate Sales Continue To Drop
The city of Boston recorded 850 total residential property transactions through Q1 2024. Compared to 951 sales in Q1 2023 and 1,283 in Q1 2022, we’re seeing a sharp drop in total real estate deals in direct correlation with the Fed’s recent interest rate hikes. Numerous talking heads and pundits are predicting that interest rates will drop as we head towards the late summer and fall of 2024. After all, it is an election year and we keep hearing the word “recession” over and over even though we are not seeing big job losses in Boston– Yet. Clearly there is some pent up demand with people wanting to move but no one wants to give up their incredibly low locked in interest rates that they currently enjoy. Should interest rates fall by two or three points it should spur more inventory and corresponding demand. Right now it is simply a waiting game with frozen and stalled marketplaces in nearly every sector of real estate. Look for 2024 transaction numbers to remain below what we’ve seen over the past 5 years in Boston’s real estate market unless dramatic changes occur.
Real Estate Inventory Continues to Drop in Boston
Boston ended the month with a total of 1,162 property listings on market for sale. That is a 4.2% drop from March’s 2023 inventory of 1,213. With the exception of March 2020 which was marked by COVID, inventory has been slowly declining year-over-year since 2019. This can be attributed to the City’s inability to produce new construction inventory…