Realtor.com, a national site for real estate listings and information, found that the Boston housing market is the second most recovered out of the 50 largest metro areas in the country as of the week that ended June 13. Realtor.com’s Weekly Housing Index relies on search traffic on the site, median list prices, new listings, and median time on the market, all compared with the January 2020 market trend. The firm’s data indicate that Boston was on track to see the busiest housing market on record in the spring until the pandemic hit.
“Our data shows the Boston market is experiencing a swifter recovery than the US overall,” said Javier Vivas, director of economic research for realtor.com. “Asking prices are growing at near double digits, and while sellers have yet to come back in full strength, the pace of sales is comparable to this time last year, bucking the national trend that has yet to see time on market catch up. The number of active home shoppers remains high and growing, as lower mortgage rates and a resilient tech sector continue to power demand.”
Part of the recovery, unfortunately, includes bidding wars. Approximately 64 percent of Boston buyers working with Redfin real estate agents faced competition in May, according to the Redfin real estate brokerage.
“The Boston real estate market is extremely competitive because there aren’t enough homes for sale to keep up with the demand,” said James Gulden, a Redfin agent in Boston. “The pace and competition right now is crazier than I’ve ever seen, with homes often selling in days with five, six, seven, or more offers. And because of COVID health concerns, sellers don’t want to allow any more showings than necessary, so if they get a strong offer on the first day, they are moving up the offer deadlines. Instead of a more typical Monday or Tuesday offer deadline to allow all the buyers to see the home over the weekend, I’ve seen offer deadlines on Thursday and Friday evening and Sunday morning. So this adds to the chaotic, frenzied nature of the market.”
Boston’s pent-up demand from the truncated spring market and years of limited inventory make it ripe for a quick recovery after the economic shutdown.
“Lower interest rates have certainly increased buying power, and Boston is uniquely positioned for recovery due to the strength and diversity of its economy,” said Neda Vander Stoep, a real estate agent with Coldwell Banker Realty New England. “In addition to the tech sector, pillars of Boston’s economy include financial services, education, and health care, including biotech, pharma, hospitals, and insurance companies.”
Realtor.com’s report found that the top five markets that recovered above their January 2020 level were tech hubs: Denver, Boston, Seattle, San Francisco, and San Diego.
“While no industry has gone unaffected this spring, the tech sector has remained relatively well insulated, with the brunt of job losses occurring in the retail, food and hospitality, health care, and service industries,” said Vivas. “The Boston/Cambridge hub is a prime example, where tech jobless claims have been large in volume, but small as a percentage of the total tech workforce. Declines in employment in the Boston tech industry have been three to five times smaller in share than the most affected industries.”
Most of Gulden’s clients can work from home, which contributes to the housing recovery.
“The buyers I’m working with have continued working and feel confident in their employment, which has kept demand and competition high,” said Gulden.
One possible headwind for the housing market is whether universities will reopen in the fall, said Gulden. If not, there could be a negative impact on the downtown rental and condo market, he said.
“The response to the pandemic, in Boston and Massachusetts as a whole, has been comprehensive and aggressive compared to other areas of the country,” said Vander Stoep. “As such, there may be a perception that the situation is under control and that the Greater Boston area will come through the other side.”
The quick response and early peak of COVID-19 cases also allowed home showings and closings to resume more quickly in Boston than in some other markets, said Vivas.
Median time on market: 35 days (-5 percent year-over-year)
Median asking prices: +9 percent (year over year)
New listings: -10 percent (year over year)
Realtor.com home searches: +33 percent (year over year)