The City of Boston is one of the most populous cities in the country. The historic Boston metropolitan area is popular for its museums, colleges, tours, and attractions, and is home to 4.8 million people and growing. With something for everyone, it’s a lovely place to live, visit, and retreat. In fact, the Boston real estate market has seen a surge in households over the past year.
Current market conditions in Boston
- Home prices in the greater Boston area are up 12% year over year.
- Since that time last year there have been 8,000 new households in Boston.
- The housing supply has fallen to just 1.4 months.
Buying a house in Boston
Boston Home Prices
Boston Average Home Value: $ 605,000
National average: $ 371,000
Average home prices in Boston have increased nearly $ 200,000 over the past 5 years. In the last year alone they have increased by 12%. Nationally, home prices have risen 22.4% over the past year, but overall, Boston has seen more impressive home price increases over the past 5 years. Both continue to rise to a new level that has never been seen in recent years. Most of Massachusetts’ most affluent cities are located in and around Boston, so it’s no surprise that this area will continue to grow and thrive as the real estate market picks up.
Boston housing listing
There is currently a 1.4 month housing offer in the greater Boston area. This is 0.86 months less than last year and is still on a downward trend. Similar to the national figures showing 1.1 months of housing supply, supply is low and demand is high. There aren’t enough homes for sale for the number of buyers looking, causing home prices to escalate. Sellers will get more for their homes than they ever expected, and buyers will pay more to get to this coveted city.
Buying a rental property in Boston
Like many major cities and popular tourist attractions, the pandemic had a harsh impact on Boston. A long, cold winter and travel restrictions are damaging the hospitality industry and rental market. The return to normal takes a little longer.
Boston rental rates
Boston Average Rental Price: $ 2,454
National average: $ 1,704
The rental prices in March 2020 were as high as in previous years. From then on, the pandemic caused prices to fall. However, they are on the rise again. They are down 4.1% yoy but are now on an uptrend. National rental rates are up 3% year-on-year and have continued to rise during the pandemic. Given the trend that Boston rentals were in before the pandemic broke out, there is every reason to believe that prices will get back on track and rise even higher than before. For real estate investors, this means it is a good time to move to the Boston metropolitan area and make a promising rental investment.
Job offers in Boston
Boston vacancy: 6.9%
National average: 6.8%
The vacancy rates in Boston are close to the national average. At the national level, rental vacancies are more constant, while Boston has always had a volatile rental market. As a tourist destination and a popular university town, vacant rents drop in certain months and then rise again. Vacancies are currently as high as they were during the pandemic. The rental prices have fallen due to the current oversupply. Boston vacancies have now stabilized and should see a further decline soon, potentially causing prices to rise. For investors looking to buy a rental property in Boston, jumping into the market now means paying more for a property and then patiently holding out until the rental market picks up again. But if you jump into face-to-face learning right before college students return in the fall, you will likely do very well.
Foreclosure rate in Boston: 0.3%
National average: 0.3%
National foreclosures are at an all-time low. This also applies to Boston. Both fell 0.1% over the past year. Faced with a housing shortage, more and more people and investors are keen to buy foreclosures to retry or flip. This is great for the real estate market as fewer homes are in need and abandoned. It’s harder for investors to find a good offer on a foreclosure because the numbers are just so low and buyer competition is fiercer than ever.
Fisher College on Beacon Street
The most expensive neighborhood in Boston is Fisher College on Beacon Street. This area is more expensive than 99.4% of the US neighborhoods. Average home prices are more than $ 2 million, while rental prices are nearly $ 4,000. A historic district, residences were built here before 1939 and are home to a mix of owners and tenants. This urban quarter consists mainly of apartment buildings and high-rise complexes. About 10% of these apartments are seasonally inhabited as there are often college students here. In addition to college students, the population here consists primarily of highly educated urban cultural workers. These wealthy city dwellers enjoy the walkability as well as the arts and theater.
City center / University of Suffolk
Another popular place in Boston is the City Center / Suffolk University. In an affluent coastal city, homes here cost around $ 1.3 million and rents around $ 5,000. These apartments are predominantly occupied by tenants in apartment buildings or high-rise complexes. Most of the buildings were constructed between 1970 and 1999. The vacancy rate here is over 20%, with just under 12% occupied due to seasonal factors. A large part of the workforce here consists of executives and specialists with high-level activities. Almost half of these workers do not own a car and instead walk or take the train to work.
Readville and Stonybrook Village
A cheaper part of Boston is in Readville and Stonybrook Village. Average house prices here are $ 471,218 and rents are around $ 2,500. This is an urban quarter with predominantly small to medium-sized single-family houses and smaller multi-family houses. The apartments here are mainly used by the owner. The established quarter has a vacancy rate of only 2.9%, which means a high demand for housing. Small shops and mom and pop shops are just as common in this area as cultural diversity. The jobs here range from executives to service jobs and office workers to manufacturing.
Economic situation in Boston Boston
As a city hard hit by the pandemic, Boston is returning to normal. Unemployment is falling. New employment opportunities are emerging with the help of businesses at capacity, colleges ready for face-to-face learning, and travelers ready to re-explore.
Unemployment in Boston
Boston unemployment rate: 5.9%
National average: 6.1%
The unemployment rate in the greater Boston area was low at just 2.9% in March 2020. The rate skyrocketed to 15.6% during the pandemic and has since declined to a more normal rate. The rate is still 3% above the previous year, but is on the way down. The national average has developed similarly, increasing to 14.8% and decreasing to 6.1%. Unemployment continues to decline, more businesses are reopening and more job opportunities are in sight.
Boston Top Employer
Massachusetts General Hospital is the largest employer in Boston with 11,400 employees. It is ranked as one of the top 5 hospitals in America. It has been awarded numerous prizes and offers far more than just health care. Brigham and Women’s Hospital is another major employer with 8,600 employees. Both hospitals are teaching hospitals for Harvard Medical School.
Fidelity Investments is headquartered in Boston and employs 8,000 people. It is one of the largest financial companies in the world, providing competent financial services to its customers as well as many benefits and programs to its employees.
With 7,400 employees, Boston University is one of the largest private universities in the United States. This university offers more than 300 programs with a wide variety of courses and majors. It also offers 500 student clubs, as well as support and resources for enrolled students and graduates.
The bottom line in the Boston real estate market
The Boston area real estate market is on the way back and it could do better than ever. Households have risen, home prices have risen sharply, and job opportunities are recovering. The rental market will take a little longer to normalize as prices are lower and vacancies have risen, but overall it looks like Boston is heading for a successful recovery after a rocky year.