Boston Was Named the Nation’s Third-Hottest Real Estate Market
Realtor.com recently released its 2017 real estate forecast, in which it bestows wisdom about the post-election market, new housing trends, and the hottest U.S. housing markets. The good news? We made the list.
Out of the 100 largest metro areas in the country, Boston clocked in as the third-hottest real estate market for next year. The property search site examined housing markets based on levels of price and sales gains—Boston was beat out by the likes of Los Angeles, Calif., at number two, and Phoenix, Ariz., at number one.
Realtor.com anticipates strong local economies and population growth will continue to fuel these top U.S. markets. Boston is expected to see a 6.1 percent increase in price and a 6.3 percent increase in sales, outpacing the predicted national growths of 3.9 percent in price and 1.9 percent in sales. The report says the top 10 housing markets have a few common themes: low unemployment, large populations of millennials and baby boomers, and—wait for it—relatively affordable rent prices. (The latter is perhaps not so accurate for Boston.)
While things are looking up for the markets realtor.com has dubbed the hottest, the housing market overall will remain moderate in 2017. In fact, higher mortgage rates will result in more sluggish gains, making for a year of slowing, yet moderate growth. Prior to the election, there was predicted to be an increase in first-time home buyers in 2017. But recent mortgage increases during the past few weeks have shown qualifying for a mortgage and finding affordable homes may become more challenging.
“We don’t expect the outcome of the election to have a direct impact on the health of the housing market or economy as we close out 2016. However, the 40 basis points increase in rates in the days following the election has caused us to increase our interest rate prediction for next year,” said Jonathan Smoke, chief economist for realtor.com. “With more than 95 percent of first-time home buyers dependent on financing their home purchase, and a majority of first-time buyers reporting one or more financial challenges, the uptick we’ve already seen may price some first-timers out of the market.”
And the top housing trends that’ll sweep the nation? Millennials and baby boomers are expected to dominate the market. Americans will continue to migrate to the Midwest (leaving so soon?) even as interest rates climb. Increasing prices will slow down, which is good, but fewer homes will hit the market and they’ll be scooped up quickly. Next year will also keep the western U.S. on top for both home prices and sales.
So, what’s the takeaway here? Boston’s real estate market is still going to be fast-paced and high-priced compared to the rest of the country. Donald Trump won’t obliterate market, but his election may make home buying more difficult for first-timers. And apparently, the Midwest is where it’s at.