In 2025, I believe the Greater Boston real estate market, fueled by low inventory and pent-up buyer demand, will remain a very competitive market, especially for Suburban Single Family Homes. The Greater Boston real estate market is maintaining price appreciation despite challenges such as high mortgage rates and affordability limits for many buyers. This is largely due to a combination of low supply and persistent demand. A key indicator of market competitiveness is the Sold to Original Price Ratio, which shows single-family homes selling for an average of 101.9% of asking price and condos at 99.7%.
2-4 unit Multi-families continued to trade competitively in 2024, trading close to asking, with solid price appreciation (shown above in 3 family stats in the GBRE report). However, the Multi-Family 5+ market, which is considered commercial, has been weakened by high rates and a slowdown in commercial bank lending. Opportunity: While the rates are still high for investment purposes, there are opportunities to find great properties with strong cash flows, especially for cash buyers or leveraged buyers able to put down 50%+. The rental market remains very strong, making these investments attractive, and multifamily properties could offer significant long-term returns, especially as refinancing options improve when rates eventually drop. The commercial opportunity is bigger to find premium properties at a discount to asking.
High-End Market: Despite the continued competitive landscape for Boston, the luxury real estate market (condos and single-family homes above $3M/$4m) has slowed, creating opportunities for buyers to negotiate and find premium properties at discounted prices. Historically, the high-end market trades very actively, but the slowdown offers potential deals that wouldn’t be possible to find in lower rate market environment. If you are a high end buyer, due to softness, a lot of listings for sale can be found off-market in the winter, to avoid high Days on Market. Please reach out to get an edge on finding off-market properties. I find it can be a great time to find the best properties and deals.
Please see key data showing Median Sales, Days on Market and Sold to Original Price metric provided by the Greater Boston Association of REALTORS, through November 2024.
Single Family Homes (Greater Boston 64 towns): Median Sales Price up to $900,000 in 2024 from $850,000 in 2023.
- Days on Market remained the same at 18 in 2024 and 2023
- Sold to Original Price Ratio remains the same at 101.9% in 2024 and 2023
Condominiums Homes (Greater Boston 64 towns): Median Sales Price up slightly to $717,400 in 2024 from $700,000 in 2023.
- Days on Market is up to 21 in 2024 and from 20 in 2023.
- Sold to Original Price Ratio remains roughly the same at 99.7% in 2024 and 99.9% in 2023
3 Family Homes (Greater Boston 64 towns): Median Sales Price up to $1,213,998 in 2024 from $1,135,000 in 2023.
- Days on Market went down to 21 in 2024 from 24 in 2023
- Sold to Original Price Ratio is up at 98.7% in 2024 from 96.7% in 2023
5+ Family Homes (Greater Boston 64 towns): Median Sales Price is down to $2,350,000 in 2024 from $2,505,000 in 2023.
- Days on Market went up to 54 in 2024 from 45 in 2023
- Sold to Original Price Ratio is up at 95.8% in 2024 from 94.4% in 2023
https://www.gbreb.com/GBREBDocs/GBAR/News/Housing-Market-Data/2024/GBAR-Monthly-Market-Stats-Nov24.pdf
Looking Forward / Opportunities:
When will rates come down? As rates eventually decrease, I anticipate aggressive increased market activity and price appreciation. We continue to face strong pent-up demand from buyers who were sidelined by high rates in 2023-2024 or having been outbid in previous years, alongside millennials entering their peak homebuying years. As mortgage rates begin to drop toward the mid-5% range on the 30 year, I expect a dramatic acceleration in residential market sales, driven by pent-up demand from buyers who have been waiting for more favorable borrowing conditions.
Investment Market Rebound: The investment market has been significantly impacted by the rise in interest rates, with fewer investors able or willing to pay higher asking prices. However, once rates decrease, financing will become more affordable, encouraging investor activity and stimulating the market. The timing of this rebound will depend on when rates drop, but 2025 may see some movement.
