Boston Real Estate Market Update at a glance, December 2024 Trends

The Boston real estate market is witnessing notable trends and changes this December, reflecting a shift toward a more balanced environment. Buyers, sellers, and industry observers are adapting to evolving market conditions as we head into 2025. Here’s what you need to know:

Increased Buyer Activity

Despite ongoing high mortgage rates, buyer activity has surged as the year comes to a close:

• Home Tours and Mortgage Applications: As of mid-December, there has been a sharp uptick in home tours and mortgage applications. The Homebuyer Demand Index has reached its highest level since September 2023, showing a 7% year-over-year increase.
• Buyer Strategy: Buyers are adjusting their strategies to capitalize on current market opportunities, taking action before the year ends despite economic uncertainties.

This renewed interest signals that buyers are becoming more proactive as they navigate today’s market challenges.

Evolving Market Dynamics

While buyer demand is increasing, sales data highlights a broader shift in the market:

• Decline in Home Sales: Single-family home sales fell by 1.3% year-over-year, marking the lowest monthly sales volume since September 1995. Condominium sales also experienced a significant drop of 10.6% compared to last year.
• Rising Inventory: The number of homes available for sale has increased, giving buyers more options and reducing the pressure to make quick decisions. This rise in inventory is contributing to a more balanced market where buyers gain greater negotiating power.

For the first time in years, the competitive edge is beginning to tilt slightly toward buyers, fostering a healthier housing environment.

Price Trends Show Softening

Housing prices, which have seen significant growth in recent years, are showing signs of moderation:

• Single-Family Homes: The median selling price has remained flat year-over-year but decreased by 7.4% month-over-month, marking its lowest point since February 2024.
• Condominiums: Condo prices have experienced slight annual declines, reflecting a broader trend of softening price growth as the market adjusts to current conditions.

While prices remain elevated compared to pre-pandemic levels, these adjustments indicate a gradual move toward more sustainable pricing.

Future Outlook for 2025

Looking ahead, experts anticipate continued shifts in the Boston housing market:

• Lower Mortgage Rates: Economists predict that mortgage rates may decline in 2025, which could further boost buyer activity and encourage more homeowners to list their properties.
• Modest Price Growth: While price growth is expected to remain tempered, projections suggest a modest 2-3% annual increase through 2025.
• Economic Uncertainty: Rising interest rates and broader economic challenges may still influence buyer confidence and market behavior.

These trends point to a stabilizing market that balances buyer and seller interests, creating opportunities for those ready to make a move.

A More Balanced Market Emerges

The Boston real estate market in December 2024 is characterized by increased buyer activity, rising inventory levels, and softening prices.

Buyers are showing renewed confidence, while sellers are adapting to the changing landscape. As we move into 2025, the market is expected to stabilize further, with modest growth and improved opportunities for both buyers and sellers.