Real Estate Market Overview
The real estate market has cooled slightly in 2025. Even so, Metro Boston continues to stand out as one of the most resilient and competitive markets in the country. Persistently low inventory and strong buyer demand keep competition fierce, with prices trending upward despite broader national softening.
U.S. Macro Headwinds
The year began with renewed tariffs under President Trump, slowing economic activity across several sectors. At the same time, the U.S. faces escalating tensions between Iran and Israel, alongside ongoing involvement in the Russia-Ukraine conflict. Despite these headwinds, equity markets have rebounded, and real estate continues to trade—though at a slower pace. We’re seeing longer days on market and a modest increase in inventory, yet the Boston metro housing market remains one of the nation’s most competitive.
Interest Rates & Investment Market
Interest rates remain elevated compared to the ultra-low era from 2009–2022, when rates often hovered below 5% and at times dipped under 3%. During those years, real estate market and investment property transactions surged. Today, with higher borrowing costs around 6%-7%, leveraged properties purchased often struggle to generate enough rental income to cover debt service. We have seen a major slowdown in investment property transactions, which creates opportunity.
An Investment Opportunity
This shift has created a rare opening: attractive assets are coming to market at discounted prices. I’ve seen some of the best inventory of my career in Boston come to market — true trophy assets, offered below market value. For investors able to put down 50% equity or pay cash, they can make the numbers work and find great deals. If you’ve been waiting for the right window to invest in prime Boston real estate at a discount, now is a great time.
My favorite example: six consecutive buildings on Newbury Street—highly desirable, once-in-a-lifetime assets that remain unsold. It’s shocking they haven’t been scooped up given their long-term appreciation potential. I’ve also seen smaller, distressed single-unit opportunities in Back Bay and Downtown Boston. Call me for details.
Another strong reason to consider buying now is the potential for a major market shift once interest rates eventually drop below 5%. When that happens, I believe the market could surge to an entirely new level. There are many buyers currently on the sidelines — some have been outbid in the past, while others simply can’t afford monthly payments at today’s rates. The same goes for many investors who are waiting for more favorable conditions. When rates do come down, I expect a wave of renewed demand to hit the market, which will likely drive prices higher. Acting before that surge could be a smart move to take advantage of future appreciation. In addition, those who purchase now with higher interest rates, will have the ability to refinance to lock in lower rates.
