Housing Market Price Trends & 2020 Outlook
2020 End of Year Review
What a year!
I think I speak for us all when I say, “didn’t see that coming”. 2020 was a trying and difficult, yet monumental year. It felt like the new decade had just begun, when the world was struck by COVID-19. With the pandemic came loss, sacrifice and challenges, but it also brought triumphant victory. Frontline workers from Doctors to Supermarket Clerks persevered and received the appreciation they deserve. Neighbors, young and old stood up and showed a public outcry for equality at an unprecedented scale.
With everything going on around us, it’s easy to overlook what’s going on in New England Real Estate. However, the housing market in 2020 is another example of humanity prevailing throughout the most difficult year of the millennium.
Greater Boston Prevails!
With COVID-19’s arrival in the States shortly after the holidays, businesses came to a stop. As we retreated into our homes for the Spring, many of us were unable to see friends and family, let alone clients and agents. However, as Spring turned to Summer, the housing market picked back up right where it left off. Even with a primarily halted Spring, towns in the Greater Boston Area realized a universal increase in average Sales price from 2019 to 2020 while maintaining the sales volume of previous years.
The industry’s rapid growth is greatly due to record-low mortgage rates in 2020. The average 30-year fixed mortgage rate with a 20% down payment hit 2.72% according to Freddie Mac, down from 3.66% in 2019. This allowed buyers to continue to buy homes even after the economic impacts of the pandemic.
Lexington’s Value Soars
Through these uncertain times, Lexington continues to lead the pack in more ways than one. Sale prices of homes in Lexington have grown an average of 8% since 2019, following the growing price trend established more than 10 years ago. Mid-year update: Houses in 2021 are selling at a 15.4% increase from 2020!
One explanation for Lexington’s growing popularity is its enriched history and outstanding education. Lexington High School remains in the Top 5 Best Public High Schools according to Niche.com. Students at Lexington hold an extremely impressive average cumulative SAT score of 1325. Our students were raised valuing self-improvement through education. It’s no wonder Lexington High School has a 99.8% graduation rate according to Boston Magazine! Meanwhile, younger students enjoy award-winning “Blue Ribbon” educations from Jonas Clarke Middle School, and three of our elementary schools. Families all over the country continue to seek homes in the historic town to provide their children with the best education possible.
Fine Boston Living Tackles New Frontiers
Along with everyone else, our team scrambled to adjust to the new world. We quickly realized that the old rulebook was no longer in play. We had to change our approach in order to provide the highest level of service possible to you, our clients, while also keeping everyone safe.
This year, the team utilized new tools to adapt to the online world. We increased our social media activity, diving into a previously under-valued platform. We live streamed open houses through Instagram and Facebook, which proved to be a smashing success. Private FaceTime calls allowed for safe individual showings as well. These tools were crucial to our team’s success and facilitated growth and sales throughout 2020, even assisting in new and exciting ventures in both Boston and Commercial spaces.
Looking towards 2021
As the country begins to turn the corner and get back to “normal life”, the housing market is stronger than ever. Prices remain competitive, providing great value for sellers. To balance this out, mortgage rates remain low and are making it possible for buyers to afford more. Should these trends continue throughout 2021, the market should stay on its upward path.
In 2020, we worked, lounged, studied, and most of all, quarantined in the comfort of our homes. This allowed those who love their homes to appreciate them and those who don’t, to figure out what’s missing. Moving through 2021 it’s more important than ever to live in a home that meets all of your wishes. Our Fine Boston Living Team is eager to assist you in your real estate needs, whether it be selling, buying or both. Please reach out to us anytime. We wish you a safe and prosperous 2021, and we look forward to hearing from you!
2019 End of Year Review
A Decade in Review
After a steep housing crash in 2008, a gloomy cloud hovered over the beginning of the 2010s. However by the midpoint of the decade, both the real estate market and the overarching economy came roaring back to life. The real estate business in particular bounced back and hasn’t stopped bouncing yet. Here at the end of the 2010s prices have hit record highs, and new construction rates can barely keep up with the influx of new buyers. The 2010s taught everyone very valuable lessons in the realms of financing and budgeting, but most of all it proved just how strong the U.S housing market really is.
Greater Boston Shines
The city of Boston is fueled by a past of hard work and patriotism. From the luscious greenery of the Boston Commons to the industrial shopping center at Downtown Crossing, residents are always finding new adventures in this coastal city. No wonder average condo prices have risen each year of the 2010s and show no signs of stopping.
The suburbs within reach of Boston have always been desirable for those who wish to be an arms-length away from all the happenings of downtown but also want top public schools and quiet neighborhoods to raise a family. In the last decade, the entire Greater Boston Area has seen rising prices of homes, and has proven to be a stable metropolis for current and future New Englanders.
Lexington Experiences Rising Prices After a Stagnant 2017
After half a decade of growing prices, 2017 seemed to be the start of a dip in Lexington home prices. However, Lexington proved to be as resilient as ever, witnessing a 6% increase in single family home prices from 2018-2019.
As of the beginning of 2020, Lexington High School is ranked at the top of all public schools in Massachusetts by Niche.com. According to Boston Magazine, the average LHS student boasts an impressive 1319 cumulative score on the SAT and a 95% graduation rate. The cultural and educational value the residents of Lexington hold make it no surprise Lexington is often top choice for those looking around the Greater Boston Area.
Looking Forward into 2020
As we rotate into the first year of the new decade, we find ourselves in a Presidential election year with superb GDP growth and unemployment rates sitting at over 50 year highs and lows, respectively. A bustling economy and aging millennials boasting steady jobs give reason to believe 2020 will be a year full of buyers. In addition, interest rates nationwide have seen copious substantial cuts, enabling buyers to afford higher value homes than they would otherwise. We expect the economy to continue its impressive growth record through 2020 and the first half of the new decade. While some kind of a correction is inevitable, and almost half of all residential builders went out of business after the housing bubble burst, we still haven’t realized full capacity. These factors along with countless others, point to a 2020 where buyers will be competing with one another for a limited supply of houses
Working with a skilled team of realtors is more important than ever for both buyers and sellers. Our Fine Boston Living team will work for you, ensuring you find your dream home in an increasingly competitive market or get the best price for your former dream home. Please give anyone on the team a call anytime. We look forward to hearing from you and are eager to talk with you about the Boston area real estate market.
Housing Market Price Trends & 2019 Outlook
How Much Did Average Sold Home Price Change The Past Year?
Nationwide, the average single family home price did not significantly change between 2017 and 2018. In comparison, Northeast home sales decreased by about 2.4%, while prices in the towns that I cover averaged an increase of 7.8%, with a wide range of town-specific changes.
Towns That Changed The Most
Concord and Weston saw increases of 12% each, which were the highest, with Lincoln and Needham both right behind them at 11%. Lincoln’s jump may be attributed to the fact that it only saw 62 homes sold in 2018 – same with Carlisle, who saw a price increase of 11% with just 76 homes sold. Every other town had at least 130 homes sold, with some even reaching over 300. Lexington, the only town to not increase in average sold price, dipped by less than 1%, while Sudbury, the next lowest, went up by 1%. Lexington is one of the few towns that has been steadily increasing in average sold price each year over the past decade, so this stabilization is likely just a correction year.
This writeup addresses single family homes, except for in the cities of Boston and Cambridge, where it covers condominiums. Boston and Cambridge have both seen an uptick in average sold condo price in each of the past 10 years. In fact, the average price in each city has almost doubled since 2009.
Outlook For 2019
In the final week of the first quarter of 2019, the average interest rate on the standard 30-year mortgage fell at the fastest rate in more than 10 years. This was a welcome change after a huge interest rate increase at the beginning of the year. Analysts predict that the downward trend will continue due to other economic indicators, including the Federal Reserve’s recent decision to hold off on its own rate increases for the foreseeable future. This should counteract the significant increase in home values during the first quarter of 2019 and encourage potential buyers to begin shopping and to spend a little more than they would with a higher interest rate.
How We Can Help
To learn more about how we can help you sell your house for the right price or find the perfect home, please call my cell any time at 781-389-4400, or contact any one of the excellent Fine Boston Living team members.
Increase for Lexington and Greater Boston Suburb Home Sale Prices in 2017
Increase for Lexington:
Increase for Lexington and Greater Boston Suburb Home Sale Prices in 2016
Increase for Lexington and Greater Boston Suburb Home Sale Prices in 2014
Nationwide, average single family home sales prices ticked up just 3% in 2014, while Northeast prices edged up 2%. In contrast, prices in those Greater Boston towns where I focus my business (see list, below) jumped 8% on average, with a wide range of town-specific increases.
The range in increases for these desirable towns spans from 5% in Sudbury and Winchester to 14% in Lexington and Burlington to a high of 17% in Weston. 2014 is the first year since 1999 with an overall price increase for almost all of the above listed towns. As an exception, Lincoln showed a 6% decline in sale prices between 2013 and 2014 but keep in mind that Lincoln also had the least number of sales among these towns. Specifically, 64 homes sold in Lincoln versus 195 in Winchester and 316 in Wellesley. Wide swings are common with a limited number of sales. In fact, Lincoln saw home sales prices jump 17% during the combined sales in 2013 and 2014.
What Factors are Driving up Average Home Sale Prices?
Two of the biggest factors elevating prices are a strong economy and exceptionally low interest rates. For example, the growth and expansion of Lexington-based pharmaceuticals are encouraging employee relocations and families are choosing to live near the companies. Interest rates are still at historic lows and many buyers are borrowing with attractive 3%-4% rates. Banks are increasingly offering aggressive Jumbo loan rates making it easier for buyers to consider higher priced homes. Also, the desirable location, schools, culture and amenities available in most of Greater Boston keeps the area competitive.
Towns offer unique amenities and vary in terms of what you get “for your money.” For example, homes in Concord and Lexington have sold in 2014 at roughly the same average price ($1,129,000 and $1,139,000, respectively) but the charming, inviting town of Concord will likely buy you more land and a short drive two Boston’s Commuter Rail, while beautiful Lexington offers more inventory, a variety of housing styles from vintage to new construction, and easy access to a vibrant town center parks and recreation. Another example is Newton where average prices also compare to Lexington’s ($1,142,000 for 2014) –but Lexington tends to offer considerably more house and land while Newton’s value is its close proximity to Boston.
It’s no surprise that Lexington prices are pushing gently but firmly upwards.
If any Boston suburb has proven recession proof, it’s Lexington. I know from personally tracking average sales prices in the MLS over the past 20 years that the town rebounded within two years from each of the last two recessions.
Lexington offers an ideal blend of urban and suburban. A historic and vibrant town center has preserved its appealing “small town” feel. Below the surface you’ll find the best schools in Massachusetts, desirable restaurants, a Relais and Châteaux- status “Inn at Hastings Park,” music venues, art galleries and great shopping. The Hayden Recreation Center and Ice Skating rink (home to casual skating as well as world class skating teams), outdoor exercise trails, artificial turf fields, swimming pools and tennis courts, as well as acres of unspoiled nature trails and much more, offer a depth of recreation and sports facilities.
It’s logical that “big money” previously investing in Wellesley, Weston and Belmont Hill, is seeing the value of Lexington. The number of $2mm and higher sales has multiplied more than seven times over the past six years. There were 27 $2mm+ sales in 2014, up from just 3 in 2009. Local families have been building $5mm – $14mm custom homes in Lexington, but now we are seeing developers building close to $5 million “on spec,” rather than “custom.” (hint: watch the late spring 2014 market!)
Weston, where sales jumped 17% last year to a peak of $1,761,000, seems to react well to a strong economy and many buyers are choosing this well-located suburb.
Its top tier brick and ivy schools rival that of the best New England preparatory schools. It boasts gracious estates old and new, abundant hiking and cross country skiing trails and a quaint, sleepy town center (complete with ice skating rink) that would be comfortable in a Norman Rockwell painting. Weston family life means rubbing shoulders with CEOs and CFOs at the local PTA meetings, the chance to belong to the exclusive Weston Golf Club, and the opportunity to own a large parcel of land in a bucolic setting only 15 minutes from Boston’s financial district.
Burlington, shows a whopping 27% combined increase in sales prices over the past two years.
Young professionals and empty nesters from “tonier” neighboring towns appreciate the central location and easy access to the major commuting routes and have snapped up the smaller homes and condominiums at several new developments.
Along with abundant new construction, Burlington now has destination shopping and dining. For example, think Wayside Commons (LL Bean, Season’s 52, Capital Grill) and the Burlington Mall (Nordstrom’s, Cheesecake Factory, Macy’s). The most recent buzz is about Northwest Park, nestled among high-tech companies such as Oracle. This development is intended to feel like shopping on Boston’s Newbury Street and the anchor stores in this new urban-style restaurant and shopping center include Wegman’s, Kings Bowling and the upscale steakhouse, The Bancroft.
Massachusetts and the US are recovering slowly and steadily, but prices are leaping and bounding in the Greater Boston Suburbs for reasons that are easy to understand.
Click here to see Coldwell Banker’s easy-to-read Average Home Price map for every Massachusetts Town.
Click here to see Coldwell Banker’s Updated 10 Year Price Charts
What does this mean to YOU?
Attractive, well-priced homes will continue to move quickly in the highly desirable Boston suburbs. But the only two things that really matter to you are: The price of the home you will sell and the price of the home you will buy.
To get a clear estimate of YOUR real estate market, please call me at 781-389-4000 or email me at firstname.lastname@example.org. I look forward to talking!