The Boston real estate market has taken a big step forward thanks to an influx of millennial homebuyers seeking employment in the education and healthcare industries.
Real estate in Boston is expected to experience a sales growth of 3.6%.
Boston real estate investing should benefit from both increasing prices and demand for the foreseeable future.
As a primary city with plenty of demand already, the Boston real estate market is expected to play host to even more buyers and renters in 2019. Millennials, in particular, are already flocking to Boston in lieu of a robust and strengthening economy. Thanks, in large part, to the city’s impressive science and technology industries—which are expected to grow exponentially in the next decade—young adults on the brink of homeownership should make sizable contributions to an already bullish economic forecast. As a result, it’s safe to assume the influx of a highly educated workforce will bode incredibly well for real estate in Boston. Therefore, investors who act sooner rather than later may benefit from both demand and appreciation, and those with rental properties may be able to capitalize on an equally attractive rental market.
Boston Real Estate Market Overview
Median Home Value: $599,400
1-Year Appreciation Rate: 6.5%
Median Home Value (1-Year Forecast): 8.1%
Median Rent Price: $2,925
Median Days On Market: 67
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Median Home Price Boston
Few real estate markets are currently as hot as the Boston real estate market, as evidenced by the city’s latest bout of appreciation. Home values have steadily increased for the better part of a decade. At this time in 2012, in fact, the median home value in Boston sat somewhere in the neighborhood of $333,000. Today, real estate in Boston has a median home value of $599,400. In the last year alone (December 2017 to December 2018) home values have increased 6.5%. It is worth pointing out, however, that while most of the country is expected to temper its appreciation rate, Boston appears set to increase home prices over the next 12 months. Whereas Zillow expects the median home value in the United States to increase 6.6% in the coming year, it’s reasonable to expect Boston’s appreciation rate to reach 8.1%.
Boston Foreclosure Statistics
According to RealtyTrac, a popular real estate information company and online marketplace for foreclosed and defaulted properties, there are currently 190 “distressed” properties in and around the Boston real estate market. More specifically, there are 190 homes that fit at least one of three descriptions: default, auction or bank owned. The highest distribution of these properties can be found in the following neighborhoods:
02120: 1 in every 2,537 homes is currently distressed
02125: 1 in every 4,459 homes is currently distressed
02122: 1 in every 4,580 homes is currently distressed
02124: 1 in every 4,965 homes is currently distressed
02121: 1 in every 5,547 homes is currently distressed
The Boston real estate market is incredibly hot at the moment, and years of appreciation have served to significantly reduce the area’s foreclosure rate. In fact, only 25% of the city’s distressed properties have actually been foreclosed on, which is drastically lower than the national average. The remaining 75% of Boston’s distressed property market consists of pre-foreclosures, or homes that are merely at risk of falling into foreclosure. Nonetheless, these homes represent a great opportunity for Boston real estate investors, or anyone looking to acquire a property at a discount.
Motivated sellers are more likely to part ways with a home for a cheaper price. Therefore, those looking to acquire deals below market value may want to take a trip to the local courthouse in the Boston real estate market, as pre-foreclosures are public record.
Boston Real Estate Investing
The Boston real estate market has found itself the primary beneficiary of increasing demand. In particular, millennials are flocking to the city in lieu of growing technology, health, science and education industries. According to Mashvisor, “Science and technological industries, which are a staple of Boston’s economy, are projected to grow 73 percent faster than the broader job market through 2026.” Meanwhile, inventory within the city limits is becoming harder to come by. Not only is the city’s strong economy starting to overwhelm available inventory, but Boston is ripe with historical districts that limit new construction, making it difficult for newcomers to buy. As a result, more people are turning to renting, which bodes incredibly well for the prospects of Boston real estate investing.
Investors in Boston are already more than aware of how expensive the market is, and the trend isn’t expected to change anytime soon. In fact, prices are expected to increase more than the national average for the foreseeable future. Now is as good of a time as any to look into rental properties. While prices are on the high end, buying and holding onto a real estate asset (with the intention of renting it out) could help offset the higher acquisition costs. According to Zillow, the median rent price in Boston is $2,925, which should make it easier to absorb the initial cost of the home. Not only that, but demand should remain intact as long as Boston’s healthy economy continues to bring in new residents.
Boston Real Estate Market Summary
The Boston real estate market is arguably one of the hottest in the country, which has played particularly well to investors in the area. Buy and hold investors, in particular, could be in for a great run, as the majority of Boston’s residents reside in a rental property. That, combined with the influx of new millennials who can’t afford to buy in the area, spells great news for those who can find tenants for their own homes.
Have you thought about investing in the Boston real estate market? If so, what are you waiting for? We would love to know your thoughts on real estate in Boston in the comments below.
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