MA and Boston Multi-Family data update

[Jonathan Bombaci]

The Massachusetts Multi-Family Market has seen quite a few changes over the last 24 years. The number of Listings, or Active Inventory, is very low compared to prior years which is driving this very strong sellers market over the last few years. This shortage of inventory is driving the average listing price significantly up. As you can see 2019 was our all time high, in terms of average multi-family listing price and then it dropped in 2020. This was from the impact of COVID on the Greater Boston market. Boston, with it’s high prices, drives the majority of the MA real estate market averages at a state level. When Covid hit the prices in Boston were impacted while the suburbs, 30+ minutes outside of Boston, continued to appreciate. Now in 2021 we have bounced back to and as of November 2021 the average listing price is up over $750,000 (graphs below showing monthly data), making right now the most expensive MA multi-family real estate market of all time.

Monthly data through November 2021 for BOSTON shows a very strong cyclical market. Boston is where most of the multi-families are and it is a good indicator as to how the rest of the state is doing. We saw inventory tick up a little bit in September, then level off in October, and it actually came down a bit in November. Looking back at 2020 we can see that this slight uptick in inventory is likely a result from entering into the winter months and experiencing a seasonal softening. That being said there is even less inventory on the market this winter than there was last winter. Last year was a VERY STRONG sellers market and with inventory levels running low this is setting us up for an even stronger sellers market going into the spring. We will keep an eye on the multi-family inventory in MA going forward since if we see a sharp increase in inventory this will be a good forward looking indicator that prices may start to come down. Average multi-family listings are at an ALL TIME HIGH. However, based on what we see in the low listing numbers and the very low, less than 3 months of supply, of inventory currently on the market we do not see any indicators in the data to suggest the market will be changing anytime soon.

Given the all time high prices we often get the question of if we see another housing bubble in the future. While I do not have a crystal ball, looking at the data, I think in order for the housing market to crash we will need to see a lot more inventory to come onto the market. This will take some-time to happen and we do not see any indications showing that this has begun. To that point, we are still buying properties in MA and NH ourselves and plan to keep buying to lock in long-term debt with very low interest rates. In fact we added 5 properties to the portfolio and have another 2 underway, which the most active we’ve been all year.

*This is MULTI-FAMILY specific data pulled directly from the MA MLS, this data does not include any Single Family, Condo, or Commercial properties. It also does not include any properties sold off-market or anything that was not physically listed on MLS as a "Multi-Family".

[Jonathan Bombaci]

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Best,

Jon