The outlook for Boston’s residential real estate market in 2015 is similar to the housing forecasts being issued nationwide. Experts expect additional home-price gains through the end of the year, but they’ll probably be more modest when compared to last year’s gains.
Here is an update on housing market conditions in Boston, Massachusetts, along with a forecast for the rest of 2015.
Boston Real Estate Market Predictions for 2015
Ask ten different housing economists how the Boston real estate market will behave for the rest of 2015, and you’ll likely get ten different answers. The reason why opinions vary is because they are just that — opinions. Economists and housing analysts look at current trends and conditions within the Boston real estate market, and they make predictions and forecasts based on those conditions. It’s far from an exact science.
But there’s one area where most of the experts seem to agree: Home prices in the Boston metropolitan area will probably continue moving north through the end of 2015. But those gains will likely be smaller than what we saw last year. This mirrors the “cooling” and “leveling” forecasts that have been issued in recent weeks for the country as a whole.
Zillow is a good example of these more moderate predictions. The real estate information company tracks home prices in cities across the United States, using their own proprietary formula known as a “Zestimate.” As of March 2015, they were reporting a one-year change in Boston home prices of +6.8%. That means house values rose by around 6.8% from March of last year to March of this year.
But looking forward, their one-year forecast for the Boston housing market was more modest in comparison. The company’s economists were predicting a one-year gain of only 2.0% over the next 12 months (from the date of publication).
So, here is the general consensus among the Boston real estate predictions and forecasts I’ve encountered: Analysts expect home prices to continue rising through the end of this year, but probably less than they rose last year.
Current Housing Trends and Conditions
The Boston residential real estate market is fairly stable right now, compared to some other metro areas. While home prices rose significantly over the last year or so, they are now beginning to level off.
There is a leveling trend in the inventory department as well. Over the last few years, there has been some major inventory shift as far as the number of homes listed for sale. But that seems to have faded. Currently, there’s a pretty good balance (or at least a better balance) of housing supply and demand in the Boston area. This partly accounts for the slowdown in home-price appreciation.
According to a recent report by Realtor.com, the number of homes listed for sale in the Boston metro area dropped by 3% last year. Some other large markets, like Las Vegas and Los Angeles, experienced inventory declines of more than 30% during the same 12-month period. In this respect, Boston is more stable when compared to many other metro areas.
Home affordability is currently an issue for many residents across the metro area. According to a recent “housing report card” produced by the Boston Foundation, local residents are spending more and more of their paychecks to keep a roof over their heads. The number of homeowners who spend more than a third of their income on housing has risen from 27% in 2000 to 38% today.
Disclaimer: This article compiles Boston real estate market predictions and forecasts for 2015 from third-party sources that are deemed reliable but not guaranteed. Readers should view these forward-looking statements as an educated guess. The publishers of this website make no guarantees, claims or assertions about the future of the Boston housing market in 2015 or beyond.