Senné Annual Market Report (2022)

2022 Annual market report

Senné presents its 2022 Annual Market Report. As your trusted real estate advisory firm resource, this comprehensive report includes a retrospective of the unique attributes of the urban and suburban neighborhoods within Boston and the Greater Boston area; Cambridge, Somerville, Arlington, and surrounding towns.

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2022 presented a fluctuating year for real estate in Massachusetts. To start, year-over-year price appreciation was at 19.2%, the highest rate to start a year in recorded history according to the US House Price Index. Bidding wars were at record highs, up to 70% of transactions in some markets, and 30% of buyers were cash buyers. The robust real estate market continued at a fast pace due to our strong economy, high rate of growth, higher wages, higher employment and higher spending allowing the housing market to continue to skyrocket during the 1st half of 2022.

During the second half of 2022, interest rates rose at an unprecedented clip from 3% to 6% in one year, additionally we experienced a volatile stock market, rising inflation and supply chain issues which all contributed to a slow down in the market. The Freddie Mac 30 year fixed rate closed out 2022 at 6.42% in stark contrast to January 2022 where rates were at 3.2%. This led to decreased affordability and poor consumer sentiment. As a result demand began to wane and supply increased leading to a shift in our market. While the significant mortgage rate increases have altered Buyers’ desire to buy and Sellers have chosen to remain in their homes as it is unclear where they would go next, we continue to observe strong trends across most market segments.

On a macro scale, the Massachusetts market, especially the Greater Boston region, is healthier than it has been in a long time. As Eastern Massachusetts remains at the forefront of the healthcare and technology industries, we have seen continued growth of new homeowners and interested parties to our region of Eastern Massachusetts, In addition, the continued strength of both the education and university sector has always been a foundation of the Greater Boston market. WIth the increased focus for homeowners on quality of life, we have seen and anticipate continued growth in the broader New England market.

Because trends vary significantly from town to town, we invite you to reach out to one of our knowledgeable Associates who have in-depth knowledge and connections in your neighborhood. At Senné, we look forward to continuing to be your valued real estate advisor at every stage of your real estate journey. Whether you are just starting out and looking to rent, ready to buy that first home, your next home, or investment property, our team is here to help you!

Stacey Reifer Managing Director, Residential Brokerage

Table of Contents

Boston

Back Bay

Beacon Hill

Charlestown

Dorchester

East Boston

Jamaica Plain

Midtown

North End

Seaport

South Boston

South End

Waterfront

Greater Boston

Arlington

Belmont

Brookline

Cambridge

Concord

Lexington

Newton

Somerville

Sudbury

Waltham

Watertown

Wayland

Wellesley

Weston

Boston

A majority of Boston’s neighborhoods saw a decline in the number of transactions and an increase in sales prices. Citywide, the number of units sold decreased by roughly 12%. On the flip side, the median sales price increased roughly 5% and now sits at $725,000 while the average number of days on market decreased by one week, year-over-year. Keeping with the trends that we have been seeing for the past few years, the most competitive price point for buyers remains condos priced between $700,000 - $800,000. Homes sold on average in 24 days and for 100% of their asking price, leaving next to no room to negotiate.

As we look ahead to the coming year, experts are predicting a dynamic housing market in 2023, as the frenzied pace continues to slow down. Industry experts forecast a decline in long-term mortgage rates, but not a drop in asking prices. With median home prices in Boston well above the national average ($725,000 v. $428,000) investors were hardpressed to find bargains.

While buyers from all generations face the challenges of a tight real estate market, younger generations face steeper hurdles to homeownership.

Nationally, Millennials make up the largest share of homebuyers. In 2022, Millennials accounted for 67% of mortgage applications in the U.S. for first-home purchases (we expect this trend to continue) and 37% of those for repeat purchases.

However, in the Boston area, Millennials may feel the effects of the home-buying crunch. Millennial homebuyers place a premium on location, particularly a location that minimizes their commute to work.

Many in Generation Z have entered the home-buying market and home ownership is important to them. However, student loan burdens and early-career salaries often don’t keep pace with the rising cost of housing, so many will have to defer homeownership. Instead, they will turn to rentals.

According to National Association of Realtors, 74% of those aged 22 to 30 cited “convenience to the workplace” as the most important reason for choosing a particular neighborhood, and 65% of those buyers said that the quality of the neighborhood influenced their purchase.

This generation prioritizes amenities, especially those of the communal type, such as co-working spaces and fitness centers.

Individual communities experienced variations in the housing trends we’ve discussed above. We will explore the various communities within the Greater Boston area in more detail throughout this report.

According to a report from the National Association of

Boston Jamacia Plain 2022

Annual market report

Greater Boston

For anyone who is involved in real estate, the year 2022 came in like a lion and went out like a lamb. As has been widely discussed and analyzed, the Federal Reserve’s interest rate hikes in response to inflation has put a dampening effect on investment as the market tries to make heads or tails of underwriting and valuations. For over a decade, the market could rely on predictability, making the job of all of us real estate professionals a little less complicated.

As we enter 2023, the toughest part about our job is unpredictability. To that end, we all have to work a little harder, and we all have to listen a little more to what the market is telling us. But, like any situation which requires hard work and attentiveness, there should be a measure of success for the work, like a pot of gold at the end of a rainbow.

Comparing 2022 to the prior year, the number of homes available for sale was lower by 6.3%. There were 5,730 active listings at the end of 2022. New listings decreased by 12.1% to finish the year at 77,655.

Home prices were up compared to last year. The overall median sales price increased 7.4% to $553,000 for the year. Single-family home prices were up 8.5% compared to last year, and Condo/Townhome prices were up 6.3%.

If you’re looking to make a move or are just curious about what is going on in your town, our expert Associates are here to help.

Greater Boston Sudbury

Greater Boston Waltham