State of the Market - Boston (Suffolk County) MA

[Charlie MacPherson]

The numbers are out for Q4, 2018 and the results (vs Q4 2017) show:

• Median Sales Price: $547,000 - up 4.6%
• Average Sales Price: $729,801 - up 5.0%
• % of Original Price Received: 98% - down 0.3%
• # of Home for Sale: 143 - down 1.4%
• Closed Sales: 364 - up 10.0%
• Months Supply: 1.3 - up 1.2%
• Days on Market: 35 - down 13.1%

Translation:  

Prices are up and still rising.  

There's a almost no wiggle room in asking prices.  That's because...

At 1.3 months supply, there is still a wild shortage of homes for sale.  Anything less than 6 months is a seller's market.  1.3 months means that sellers, not buyers are in the driver's seat.

Homes are selling a bit faster at 35 DOM on average.  That's measured from the listing date to closing date.  That number implies that there are a lot of cash buyers as most lenders cannot close that quickly.

I'm skittish on whether investing in the Boston market is still wise.  I reserve the right to be wrong, but I think Boston has to be at or at least very close to peak pricing.  When the average 3-plex on the market is listed at $1.12M, it just feels like there can't be much more headroom.  The 1% rule says you have to get over $3700/month in rent per unit.  In a 3-plex. 

A fix & flip, maybe.  You should be able to get it done before the market does anything "interesting".  I'm nowhere near as confident in a long term buy & hold.

[Charlie MacPherson]

@Steven Rubino Here are the Middlesex County results.  Very similar to Plymouth and Suffolk.

Massive shortage of homes for sale, prices up.  Days on market slightly up.

If you're going to sell, it's an extreme seller's market.