The Downtown Boston condo market moving forward into 2022
What Boston for sale condo agents are telling me, it does feel like the movie “Groundhog Day” in which the main character, Bill Murray, finds himself reliving the same day over and over. The Boston condo for sale industry seems like it’s reliving past days; the last couple years have been lucrative for Boston condominium sellers and this ride is going to carry well into 2022.
National home sales reached the highest level in 15 years, with an estimated 6 million homes sold in 2021. Homeowners saw average home prices skyrocket nearly 20% which was the largest annual home price increase in the history of the House Price Index. In many hot markets especially in the southeast, the price increase was more than double that.
However, for downtown Boston condo buyers, it was a different story. For example, even through mortgage rates remained at record lows, it was difficult to even find an affordable Boson condo for sale to buy. Inventory of available homes reached an all-time low early in the year and competition was extremely stiff especially for first time buyers who were competing with investors and institutional buyers.
The overriding news was that inflation shot up at the fastest pace since 1982. Most experts say housing demand will stay strong in 2022 unless inflation continues to outpace wages at the same pace of 2021, which could cool buyer activity.
Everyone’s making their predictions, so I’ll jump in with mine as well:
- 2022 will continue to be a growth year although there will be some cooling, mostly due to inventory shortages
- Prices will increase but with fewer bidding wars for Boston condos for sale
- Average mortgage interest rates will rise above 4% in 2022
- The buyer-to-seller ratio imbalance will continue throughout the year
- New Boston high rise condo construction will continue but at a slower pace due to the rising cost and lack of building materials as well as labor…