Where is the market going is the question everyone is asking and not without justification, the trends are not clear?
Comparing the median selling price of Single Family homes during first quarter and second quarter of 2016 shows a trend that looks like a declining market. However, there was the same trend during 2015 and if you compare Q2 of 2015 with Q2 of 2016 there was an increase in Median selling price in most cities we looked at in the area. So it might just be that the winter (which is represented in the first quarter) is the best time to sell your home. Another interpretation could be that the slight increase in interest rates affected the price of homes sold. If that was the case, we should expect an increase in median selling price during the Q3 as interest rate are down in past few weeks.
What was the trend with condos?
Since condos are more common in the big cities we looked at the condos selling trend in Boston and surrounding towns. The median price for condos continues to go up in most towns and cities during the second quarter of 2016 and also year over year when compared to the second quarter of 2015.
What we are seeing is that most millennials are buying condos and many of them prefer small in the city (Boston, Cambridge, Somerville) over big in the suburbs. This might be the explanation for the continued rise in the median selling price of condos.
So where are we heading?
This is the question everyone asks me and I wish I had the answer .
Here are a few factors to take into consideration:
- The public was expecting to see increase in interest rates. Instead the opposite has happened. This can drive the market back up and increase demand again.
- Investors are being outbid by private home owners as prices are too high and the ROI is too low if not negative. This will stabilize the market.
- We are in a very interesting election year. Markets don’t like the unknown. This together with the withdrawal of England from the EU can affect the stock market and bring prices down.
- My very personal expectation is that we’ll see a decrease in sale prices over the 3rd and 4th quarter and that should be an excellent time to buy.
Only time will tell as every day is a new day and it is not for us to predict the future…