The Greater Boston residential market appears to have hit bottom, once again demonstrating Boston’s strong place among leading real estate markets in the United States. Pundits cite all kinds of fancy reasons for Boston’s place in the upper tier of real estate markets, but the best answer in real estate is always jobs. And Eastern Massachusetts generates jobs. The universities / high tech / bio med engine keeps Massachusetts among the highest percentage of employed in the nation. And the first indicator is often the rental market. New hires need a place to stay. So the rental market price is up 19% from the last twelve-month period in a recent report I did for one customer.
With the slowest recovery since the Great Depression, we will follow the bouncing ball along the bottom for a while maybe to the end of the decade (definitely see Northeastern’s Housing Report Card below). But the market will trend up hesitantly barring any further disruptions to the macro-economy.
Since September I have done a number of analyses for the residential market. As part of the analyses, I use statistics from the multiple listing service going back to the height of value in the single-family market, 2005.
In the table below, Massachusetts, Needham, Sharon are following the same trends, up since 2010. Quincy is the laggard in the group (Quincy has plenty of company statewide), but the rate of price decline has slowed in Quincy. Sharon and Needham are doing better. Although very different in average price range, Sharon and Needham share the common element of well-respected school systems.
| Single Family House Prices | ||||
| Massachusetts | Needham | Sharon | Quincy | |
| 2005 | - | - | - | - |
| 2006 | -0.92% | -4.86% | -4.14% | -4.60% |
| 2007 | -0.36% | -3.50% | -4.87% | -3.44% |
| 2008 | -10.21% | 5.02% | -9.53% | -8.64% |
| 2009 | -9.01% | -2.82% | 2.32% | -2.61% |
| 2010 | 5.61% | 4.21% | 3.40% | -1.46% |
| Nov2010-Oct 2011 | 4.70% | 3.48% | 1.12% | -2.63% |
| Jan2011-Oct.2011 | 0.15% | 1.97% | 1.37% | -1.00% |
| 2005-2011 | 13.33% | 3.93% | -13.56% | -27.34% |
These statistics compare an entire year to the year before. So, we are not comparing a September 2011 with Hurricane Irene with September 2010. Each town and city is different, and each market segment is different. Different style homes, age, and size homes respond within the micro-market of your individual towns and cities differently from the larger statewide economy.
I want to again cite The Greater Boston Housing Report Card 2011 Housing’s Role in the Ongoing Economic Crisis from the Kitty and Michael Dukakis Center for Urban and Regional Policy Northeastern University released a short time ago. The Housing Report Card is the best report on real estate in Massachusetts for sure and bears careful reading. I was pleased to see that the report confirms my opinions and probably expresses the facts better and with more detail than I do.
