The 2017 year-end numbers are in for South Boston and for the eighth year in a row median sales prices for all types of property have increased. It is up 7.7%, where the medium sales price in 2016 was $650,000 and now has risen to $700,500. The reason for this rise in prices is Southie’s desirable neighborhood with waterfront property, the Seaport and downtown close by. But also there is still a shortage of inventory, despite all the building in the neighborhood, exerting upward pressure on prices.
In the early 2000’s it wasn’t uncommon to see 300-400 properties on the market, and as of this report there are only 78 properties listed. This only represents 1 month’s inventory, which is far less than average inventory of about 4 months. While the prices of property have gone up, the number of sales have stabilized- or gone down. The resale market for condominiums are down because people are holding onto their property, aren’t finding suitable real estate in suburbia, or they’ve chosen to rent their property. This will likely change in the next few years as there are signs that the rental market is softening.
With interest rates trending up, sooner or later this will put pressure on the housing prices, perhaps creating some softening in sales. Given all the construction on the Seaport, with new companies moving into our region we could withstand a national interest rate hike: but sooner or later rising rates are bound to affect the market. So what does this mean to buyers? Buyers might decide to make a purchase now before rates go up, so 2018 should show some activity in sales.
Another way to view the market is to estimate where we are in the current cycle. While we consider it still a seller’s market, market fluctuation will occur and could spell the end of the positive eight-year cycle. So the question will be asked in this interesting market is are we going into the 9th year of a real estate boom, or will things soften. For the future we are cautiously optimistic given the strength of the general economy, Boston’s continued building boom, and the location of our neighborhood to significant commercial interests.
Information for this article was gathered from the Warren Group, MLS Property Information Network, and Rooney Real Estate data.
Jackie Rooney is one of the premier Real Estate Agent in South Boston with 30 years’ experience in real estate sales. He can be reached at 617-645-5370 or by email at Jackie@rooney-re.com.