At the beginning of this year, I made a very public prediction of how the Boston housing market would perform in 2023. As I expected, the market bounced back quickly from its dip, due to the advantage sellers have over buyers.
A large number of Boston property owners are locked into record-low interest rates with affordable payments. Many sellers can opt to rent out their unit, rather than sell at a drastic discount. This helps keep prices stable in Boston. Especially with the high cost of rent to live here.
Boston is a strong market that historically performs well during times of turmoil. Q1 and Q2 of 2022 remained strong. Many buyers scrambled to get under contract before rising rates priced them out of the market, quickly absorbing inventory.
The next response was from sellers. Especially sellers who knew they needed to sell in the near future due to life events. There became a rush to get to market first, out of fear prices would decline. This then caused a sudden increase in inventory. It was short-lived, but it was strong enough that it gave buyers at that time strong leverage against sellers.
This was evident in the Q3 and Q4 data of 2022. This is when the deals were and when I was urging buyers to buy. Those familiar with the Boston housing market, including its past cycles and performance, recognized the buying opportunity. They were ready, and many had been waiting for an opportunity in the market to buy at a discount. Especially investors who regretted not buying during the pandemic when prices also dipped.
For the first half of 2022, the citywide median sales price for a condo in Boston was $732,950. In Q3, that median sales price declined to $712,450. In Q4, that number declined again to $700,000. This is a total decline of only 4.5%, which demonstrates the resilience of the Boston housing market. For the full calendar year of 2022, the median sales price for a condo in Boston was $724,000.
For the first half of 2023, the citywide median sales price has increased to $750,000. That is an increase of 2.3% when compared to the same period of 2022. Not a huge gain, but it does demonstrate how fast Boston prices begin to rise again after a slight dip in the market. Boston only saw two-quarters of negative growth before beginning to rebound.
Source: MLS PINERGY Total Sold Market Statistics: Click here to view all raw data sources.