What’s happening in the MA Multi-Family Market?

[Jonathan Bombaci]

MA MLS Multi-Family Market Data as of October 15th 2022

Monthly data through October 2022 for MA in total shows a very strong cyclical market. The big story here is the very, apparent, and continual, lack of inventory in the Multi-Family marketplace. We saw inventory pick up a little bit going into Q4 last year, then decline rapidly. Last year, we had a VERY STRONG seller's market and with inventory levels running similarly this year it is setting us up for a continuation of a seller's market. Looking at the Sold vs List price chart, we can see listings are now selling +1.8% over asking price on average, we are still seeing strong bidding wars on the best properties. Interest rates have moved significantly since January and we are feeling its impacts of less buyers being in the marketplace at our open houses and have been receiving less offers. We've been seeing more price decreases on MLS but if a property is priced right, it will still move very quickly and for significantly over asking. We have experienced some of our buyers getting priced out of the greater Boston market due to the higher interest rates. However, "starter home" and Small Multi-Family markets are still going very strong due to the pent-up buyer demand, lack of inventory, and increasing rental prices.

We are keeping an eye on the multi-family inventory in MA very closely and also monitoring the average sale price vs list price so we can provide better guidance to our clients. If we see a sharp increase in inventory this will be a good forward-looking indicator that prices may start to soften. Average multi-family listing prices continue to be at an ALL TIME HIGH. However, based on what we see with very low inventory on the market we do not see any indicators in the data to suggest the market will be changing in a significant way in the short-term.

*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".

Historic Data going back to 1997 for Comparison

The Massachusetts Multi-Family Market has seen quite a few changes over the last 20+ years. The number of Listings, or Active Inventory, is very low compared to prior years which is driving this very strong seller’s market over the last few years. This shortage of inventory is driving the average listing price significantly upward. As you can see, we are at an all time high, in terms of average multi-family listing price. This is being driven up by the rapid recovery we saw in Greater Boston market as the impacts of Covid started to taper off. Boston, with its 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. Values have bounced back making this the most expensive MA multi-family real estate market of all time.

Big thank you to Ian Hogan who is a great investor focused agent on my team, and investor in the Worcester MA market, who pulled this data together for us. He has similar data for many other cities in the Commonwealth.