Trends in MA Real Estate
The Massachusetts Association of Buyer Agents (MABA) monitors the state’s real estate market on a regular basis, identifying trends as they emerge and offering insights for prospective home buyers to help them make informed real estate decisions. As part of this effort, MABA issues a commentary – an analysis of market conditions and key factors driving prices – following the release of Massachusetts home sales data each month. Below are MABA's comments on this month's home sales data.
Trends in MA Real Estate - December 2013
December's numbers and the year end compilation confirm that 2013 was a turnaround year for Massachusetts real estate, with all indicators showing a strong market. Despite an increase in the number of 2013 sales to numbers that almost rivaled 2005 and 2007's sales volume, strong buyer demand exceeded the available inventory for most of last year.
Throughout the year, the number of buyers continued to increase more than the inventory increased over the previous year. Since real estate is all about supply and demand, buyers bid prices up when competing with other buyers for the same home. We expected that buyer demand will exceed inventory well into 2014.
Here are the predictions for the 2014 real estate market from the Massachusetts Association of Buyer Agents:
- Interest rates will most likely increase between 1/2 and 1 percent by the end of the year
- Financing will be readily available to those who qualify, however, 10-20% of the buyers that were pre-approved in 2013 will not be able to meet 2014's revised secondary market lending guidelines
- Private lenders will begin to emerge to fill the financing void for self employed borrowers and those that fall outside of secondary market guidelines
- Prices will increase between 3 1/2 and 15 percent, depending on the neighborhood
- Communities with the most desirable school systems will see the biggest gains in appreciation
- Multiple offers will be the norm for properly priced and presented property listings through the first half of the year in much of the Greater Boston area
- Outlying areas will see more buyer demand in 2014 than in 2013 as buyers expand their home searches into areas that are more affordable
- New listings will continue to sell quickly if they are properly priced, presented and marketed
- The demand for Greater Boston area investment property will continue to be very strong in 2014, however, many investors will become frustrated with the highly competitive buying market and will move their money into other investment vehicles that are easier and faster to purchase (i.e. stocks and bonds)
- The state-wide volume of sales for 2014 will exceed the volume for 2013