Photo by Matt Santapaula, CC BY 2.0, via Wikimedia Commons
The Mission Hill real estate market has entered 2023 in a deep chill as home sales across the city tumble. Mission Hill has only had 3 residential real estate transactions in the last 3 months. That’s the lowest 3-month total in the last five years of MLS data. Also, the 30-day average selling price failed to eclipse $1M for 3 consecutive months for the first time since mid-2021. Let’s take a closer look at the trends driving the Mission Hill real estate market.
Total real estate sales in Mission Hill
Since November, Mission Hill has had only one property sale in each of the last 3 months. Given the small geographic area, total home sales for Mission Hill properties typically average around 3-4 per month. Still, just 3 home sales over a 3-month period is the lowest 3-month rolling total since late 2019. We can make some valid assumptions that our misguided war on fossil fuels and bizarre fiscal policies have helped fuel runaway inflation and the sparking the resulting high interest rates could be a strong reason for this sharp drop in sales volume. Historically, inflation almost always creates uncertainty in the market, which slows the pace of spending. The question we have to ask ourselves is how long this will last.
Will additional tax hurdles and penalties persuade more landlords to hold their properties for longer and wait out this high tax and interest rate environment?
Mission Hill Median Selling Price & Price Per Square Foot
Mission Hill’s average retail price in December was $750,000. This figure has fallen significantly over the past 5 months as demand for real estate has fallen as interest rates have risen. Median selling prices in Mission Hill rose to all-time highs in early 2022 as many buyers paid premiums for homes to secure a lower interest rate ahead of rate hikes enacted by the Federal Reserve.
The price per square foot rose sharply in the first half of 2022 before falling back in the last quarter. Similar to median selling price, this appears to be due to buyers paying above asking price for homes to complete a home before interest rates skyrocket. Remember – with such small data points due to the small volume, the peaks and valleys can become quite pronounced.
Mission Hill Real Estate Market Predictions 2023
Significant due diligence must be applied to any deal to determine the fair value of each property based on a variety of factors pointing to little future supply for sale at Mission Hill. Overall, the Mission Hill real estate market is expected to cool further in the first half of 2023. January’s CPI was high this month, leading most to believe more rate hikes are on the way. This will continue to have a negative impact on real estate demand in the coming months.
At the national level, we need to focus on energy production and increasing supply to bring inflation under control. Many Mission Hill property owners are locked into very low interest rates and are reluctant to sell and reposition/trade their capital while interest rates are so high. Therefore, it is safe to say that landlords will most likely only sell if they have to sell, and not because they want to sell their property. This lack of supply could also keep prices artificially high, especially as the incredibly low RTAR and RTVR suggest rents could continue to rise.
Given Mission Hill’s very scarce supply of real estate, prices in the neighborhood may not fall as much as they do across the city. Real estate will always be in demand in this small neighborhood due to its proximity to downtown and local universities. So while prices for Boston real estate drop this year, Mission Hill will likely drop by a smaller margin. In any case, it would be prudent to boost our economy with lower fuel prices and restart our construction industry so we can bring more supply and choice to market, which will both stimulate jobs and make it more affordable. We will continue to monitor these data trends as they develop.
Release date: March 2, 2023
Demetrios Salpoglou is CEO of bostonpads.com, an information and technology based services company that provides real estate companies with state-of-the-art resources. Demetrios has developed over 90 real estate related websites and owns hundreds of domain names. Demetrios also owns and operates six leading real estate offices with over 140 agents.
Demetrios has assembled the largest home rental team in the Boston area and is responsible for sourcing more rental homes than anyone else in New England – with over 120,000 people finding housing through his services. Demetrios is an enthusiastic real estate developer, peak performance coach, educator, guest lecturer and motivational speaker.