Six Real Estate Trends Homebuyers Should Watch This Summer
Boston homebuyers and sellers are taking the time to enjoy the first summer following a year of lockdowns, and it is shifting trends in the real estate market. To help homeowners decode the changes in the market, the team at Prevu Real Estate compiled a list of trends buyers should keep on their radar this summer.
Rational Behavior Returns to the Markets
Desperate for additional space and fueled by historic low interest rates, Boston homebuyers scrambled to scoop up spacious real estate across the area throughout 2020. The frenzy resulted in home prices rising almost 15% across the Greater Boston Area as homebuyers grabbed single family residences. The trend continued into spring 2021, but months of competitive searches and endless bidding wars pushed buyers to wait for a return to rational pricing.
Housing inventory remains constrained in Boston, but the market is balancing out. Buyer’s agents report that competition is rationalizing. Instead of juggling 15 plus offers on a property, sellers are receiving three or four offers from competing buyers.
Embattled Buyers Savor the Summer
The rising prices seen throughout 2020 and spring 2021 are plateauing as Boston buyers and homeowners take a rest from the erratic real estate markets. Some buyers are sitting out the summer after losing out on their dream homes due to other buyers making all cash offers, losing out in bidding wars, or just bad timing.
But buyer fatigue is only one factor; Many Americans are taking a moment to enjoy their first summer vacation since the covid shutdowns and Boston residents are traveling en masse, vacationing on the Cape and beyond.
As a result, competition eased in July, and buyers who persisted with their searches over the summer may have a greater chance of securing a home in August or early September.
Tight Inventory Continues in Coming Months
Boston homeowners have been riding the wave of rising prices as they sold their homes in the hot market, but not all are rushing to list their property.
Sellers strive to get the best price for their house but do not want to reinvest the gains into an overvalued dwelling. Homeowners resist chances to cash in on the appreciation out of fear they will have to compete for their dream home or downgrade their lodgings to make the most of their newfound financial gains.
Prices remain high, pushing some homeowners to plan summer trips as they wait for equilibrium to return for the fall selling season. Ultimately, this means that while buyers face less competition, available listings remain scarce as potential sellers wait.
Commission Rebates Gain Popularity
High prices created a feverish real estate market throughout the spring buying season, and Bostonians are bucking the norm when partnering with brokerages.
Boston homebuyers are researching and interviewing multiple brokers, hoping to find partners that provide money-saving commission rebates. The competitive markets pushed buyers to make numerous concessions in their offers to woo sellers, and Boston buyers have had to get creative to remain in the hunt.
But savvy buyers discovered a money-saving concept that improved their buying experience with huge savings. Empowered with commission rebates, buyers could make stronger offers knowing they would get money back in their pockets by receiving a portion of their broker’s commission. Legal in 40 states, including Massachusetts, commission rebates enable brokers to award buyers a slice of their commission fee when they close on a home.
Prevu Real Estate rewards Boston homebuyers with the largest commission rebate in Massachusetts—coming to a total of 2% of the purchase price of the home.
Commuting is a Concern Again for Buyers
Workplaces across America changed in 2020, as millions of Americans suddenly began using oft-forgotten home offices as primary workplaces. The resulting lack of space impacted Boston residents, and many purchased larger properties outside Boston to facilitate working remotely.
But, as employers craft hybrid work from home plans to return to office, buyers who moved to the outskirts of the Greater Boston Area begin to realize they may not want an hour-plus commute. This shift in priorities affects the real estate market, and the demand for suburban housing outside Boston is waning as demand rises for properties in Back Bay, the South End, and Seaport.
Interest Rates Remain Low
As the US economy pushes forward towards a stable reopening, interest rates on mortgages remain low, inspiring buyers to take a step on the property ownership ladder. While interest rates do fluctuate, rates for 30-year mortgages currently sit below 3%, and 15-year mortgages hover around 2.25%.
These rates create an attractive environment for Boston residents to purchase homes, considering the low cost of borrowing.
Considering the confluence of buyers and sellers taking respective rests from the market and the low interest rates, the remainder of the summer season is rife with opportunities to find the perfect Boston home before competition comes back from summer vacations.This is a paid partnership between Prevu and Boston Magazine's City/Studio