Hottest Markets in Massachusetts (Update & Recap)

[Ian Hogan]

The past year (2021) was a great year in real estate. Below is a list of the top 15 Massachusetts markets in relation to number of units closed and increase in average sale price as a percent change from 2020 to 2021.

Massachusetts 2021 Top Multi-Family Markets
1 - Southbridge
2 - Webster
3 - Gardner
4 - Methuen
5 - Fall River
6 - Belmont
7 - Worcester
8 - Marlborough
9 - Revere
10 - Fitchburg
11 - Taunton
12 - Haverhill
13 - New Bedford
14 - Waltham
15 - Westfield

Factors:

While comparing the 350+ towns in Massachusetts, several factors were taken into consideration to rack and stack the different markets. When analyzing the data, smaller markets are susceptible to being influenced by a small number of properties. An over-exaggerated example of this would be a market selling 4 properties in 2020 and 8 properties in 2021 realizing a 100% growth year over year. This change relative to most markets is miniscule, yet shows a large growth when taken out of context. To avoid this issue, markets with too small of a volume are filtered out.

When looking at a market to invest in, two of the primary factors to consider are how much volume exists, as well as the change in sale price or appreciation of the market. If a market does not have enough volume to keep up with demand, it can be difficult to enter the market and the prices can rise at a faster rate than what rents can afford. In other words, the bidding wars can become so competitive that investors will begin to make offers that lower the return on investment (ROI) just in order to win the investment. For a growing investor for whom ROI and cash flow are important to obtain more financing, this can become detrimental to their growth and would be a bad deal to invest in.

2022 Update:

Revisiting the same methodology and factors, we can take a look into the changes that we have seen in 2022 by comparing the relative time period (January to May) from 2021 vs 2022. It can be noted that some of these cities from the previous list have completely switch from the bottom to the top, vice versa, or have completed been knocked out of the top 15. Also notably some of the lower volume cities will be far more susceptible to large influence by a singular outlier purchase, heavily influencing the numbers.

1 - Quincy
2 - Waltham
3 - Belmont
4 - Marlborough
5 - Fall river
6 - Attelboro
7 - Taunton
8 - Worcester
9 - Webster
10 - Lowell
11 - Haverhill
12 - Medford
13 - New Bedford
14 - Fitchburg
15 - Southbridge

Conclusion:

How does this compare to what your seeing? What factors do you include that I should look into? Where are you investing now in this dynamic market?

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Ian Hogan