Massachusetts Real Estate Market Cooling Down
The Massachusetts housing market, particularly in the Boston area, has finally started to cool down after a blazing hot summer that saw relentlessly rising home prices. Although the fall and winter are traditionally slow for real estate sales, this year is seeing an unseasonable reduction in home prices. This is good news for home buyers, especially since interest rates are still at historic lows but are predicted to begin an upward climb due to financial analysts’ belief that the Federal Reserve Bank will allow interest rates to rise by sometime next year. Now is definitely the time to buy.
The third-quarter downward trend showed in a number of areas as diverse as Cape Cod and the Berkshires. The market is transforming from a seller’s kingdom to the realm of the buyer, in both high-end and more humble parts of the Commonwealth. Sellers are enticing buyers with ever-improving deals, including steep price reductions. The online real estate site Zillow.com has published data indicating that 42.7 percent of all home sellers who listed their property for sale reduced their asking price at least once during the three-month span ending Sept. 30, 2014. Sellers reduced their asking price an average of five percent. In the second quarter of 2014, sellers had only reduced listed prices in 33 percent of homes for sale, and the average price cut was slightly less than in the third quarter, at 4.3 percent.
Downward Trend Began in Second Quarter 2014
This trend began in the second quarter of 2014, which also saw buyers literally moving toward the suburbs and away from the Boston city center. Their decision may have been related to the fast and furious condo markets in Boston, but some analysts theorize that home buyers are seeking a return to the classic suburban lifestyle, made famous by the television show Leave It To Beaver. Whatever the reason, the suburbs are back in style.
A Boston Business Journal analysis of reported home sales in the second quarter revealed that home buyers are attracted to the classic semi-rural suburbs surrounding Boston’s core, particularly in the northwestern belt inside Interstate 95. Such communities as Arlington, Winchester, Belmont, and Watertown were experiencing a boom in home sales, as were dozens of towns in their vicinity.
Buyers Moving Away from Boston and Toward the Suburbs
In the 18months prior to the third quarter, the most home sales were happening in the condo-dominated markets of East Boston, the North End, Charlestown, and the Fenway. Not so in the third quarter, when the suburbs reversed the trend and took the dominant position as the favorites of home buyers, according to the BBJ’s reporters.
Using as their major source the Zillow.com database, the BBJ real estate specialists analyzed sales and pricing data by using a weighted formula to identify the most and least in-demand housing markets in the three-month period ending in June 2014. Their research was exhaustive, encompassing data for 355 ZIP codes in the state and neighborhoods from the tip of Cape Cod to Berkshire County.
According to Zillow, the middle-class city of Melrose, population 27,000, was a first-time real estate star, experiencing a boom in sales prices of 7.4 percent since the end of March and posting a 19 percent gain since the same time period last year. This upward trend slowed in the third quarter but was consistent with the overall favoritism that buyers were showing for the suburbs.
As experienced Massachusetts real estate attorneys, Pulgini & Norton can help you with all of your real estate legal needs. If you have a question regarding buying or selling a home, give us a call today at 781-843-2200 or contact our office online, and we can help legally clear the way for you.
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