2021 is here, and we could not be more excited! Nick makes his predictions for the Boston city market with a new year ahead of us and what he thinks we will see for buyers, sellers, and renters throughout the Downtown markets.
As we head into 2021, what predictions do you have for the city market - specifically the downtown neighborhoods?
We are now just over a couple of weeks into 2021, and we have already seen about 23% more condos in Boston go under agreement vs. the same period in 2020. I regularly meet with our agents to gain perspective on the market, and most have told me that this is the busiest January they have ever experienced.
With the vaccine rolling out and a new administration in the White House only days away from taking over, a feeling of hope and stability seems to be providing the confidence needed for buyers and sellers to transact. I still think it will be a while before the city’s excitement and energy return to normal, but the pieces are falling into place for the market in Boston to remain stable and slowly heat up as we make our way through 2021.
What does this mean for buyers and sellers looking to make a move this year?
No matter where a buyer is looking, the historically low rates are still providing increased buying power, so it is a great time to buy.
In the suburbs, we should continue to see the trend of low inventory and high competition as buyers continue to look for more space, which is excellent news for sellers. Buyers will have to remain patient but be ready to strike with a strong offer when they find the right property.
The Boston market has more inventory on the market than we have seen in years, which is a fantastic opportunity for buyers. With that said, properties are starting to be absorbed at a high rate, so I don’t expect inventory to remain high throughout 2021. We will likely see inventory trend downward throughout the year as people gain more confidence in the vaccine distribution, so my advice is to pull the trigger sooner rather than later if you are a buyer in the city.
And for renters, what do you expect, especially in the luxury rental buildings downtown?
I expect 2021 to begin the way 2020 ended, with a ton of available inventory and average rental prices continuing to trend downward. As of today, there are 3393 active rental listings in Boston on MLS vs. 1463 at this time last year, an increase of 131.92%! Simultaneously, the average list price has fallen from $3677.65 to $2904.82, a decrease of 21.01%.
These numbers don’t even consider the available apartments in the luxury rental buildings that are now offering incentives such as two or three months of free rent and paying the tenants’ broker fee.
This trend should continue for at least the first half of 2021 and perhaps longer until the excess inventory is absorbed, and life in the city starts to get back to normal.