When COVID-19 and subsequent lockdowns spread throughout the United States in March of 2020, urban centers emptied out as though who could escape flocked to summer houses.
What Does the Real Estate Market Look like now?
The coronavirus has radically transformed practically every aspect of life. The places we choose to live are no exception. There is a lot of inventory in the Greater Boston market right now, since many chose to leave the urban city once the pandemic began sweeping the nation. Interest rates are also at a record-low, making it an ideal time to refinance a mortgage. Long-time city dwellers have moved out, but no one has moved in yet to fill in those units. A lot has changed, so here are three changes the Boston market has faced due to the COVID-19 pandemic.
Exurbs are the New Suburbs
As working from home becomes the new norm, many have decided to leave the city for good. Work is one of the main factors bringing someone to a new place. If you didn’t have to spend thousands of dollars a month on rent for a small apartment, why would you? In the Boston area, many people are leaving the city for good and relocating to quieter neighborhoods. Western Massachusetts, the North Shore, and Cape Cod have all had population increases during the pandemic.
Even once COVID-19 has subsided in Boston, these trends are likely to be here to stay. Many jobs are committed to providing flexible work. Which is allowing their employees to work remotely, in person, or a mix of the two. This shift will radically alter the way people live and work. No longer will people have to live near a city center. Families can prioritize outdoor space and good schools over being near work.
The suburbs have not gone out of style fully, but the low inventory has motivated buyers to look elsewhere. Still, familiar ’burbs such as Arlington, Winchester, Medford, and Lexington have continued to thrive, says Steve McKenna. She is a Gibson Sotheby’s realtor based in Arlington. “People still want the walkability and they don’t want to have to get in their car for everything, especially those coming from the inner city.” So accessibility to shops, sidewalk-lined centers, and proximity to the city are still attractive features for buyers.
High Demand for Single-Family Homes
Another of Gillach’s customers was initially hoping to stick to the nearby rural areas of Boston, like the neighborhood, Medford. They stuck to Beverly, a town on the North Shore, about 25 miles north of Boston. The cost of a single-family home increased from 4.5% from June 2019 to June 2020. Houses in the greater Boston area cost around $680,000 on average, which is significantly higher than the national average.
Redfin reported that 72% of listings in Boston experienced bidding wars in June. There is an extremely high demand for housing in the Boston area. That is why everyone is fighting for the limited amount of inventory available. When those are employed, if a house receives another offer, the bidder’s offer is stepped up to a predetermined maximum price above their initial asking. That way the buyer doesn’t have to keep coming back with new numbers. The seller doesn’t have to accept the new offer at that point, but increasingly, they are.
“We’re seeing a greater number of merchants acknowledge the best offer instead of going into the most noteworthy and best situations,” says Jason Gell, a Brookline-based specialist for RE/MAX Unlimited. “Heightening provisions are important for what is driving this, however so is the longing to restrict openness, particularly with involved homes. The venders are getting incredible offers and they’re tolerating them and proceeding onward as opposed to battling for each dollar.” After all, who needs the additional pressure of an outbidding furor during a pandemic?
The Condo Market Isn’t What it Used to Be
It’s not hard to see where the single-family home fever is coming from. Beyond feeling less tethered to the city and more able to explore suburban pastures, COVID-era house hunters are above all looking for more space to themselves. “Over 70% of our buyers in Arlington are young urbanites,” explains McKenna. “And they’re saying, we need two home offices, we need a homeschooling space for the kids, we need a family room, and we need separate spaces.”
Smaller or open-concept condos, it seems, just aren’t able to supply so-called Zoom rooms and all those other new must-haves. According to the GBAR’s June data, not only did the volume of condo sales go down significantly—from 1,253 sales in June 2019 to just 706 this summer—but the median sale price went the opposite way of single-families, decreasing by 4.4% to $592,500 this June.
Playing into the decrease in prominence is the way that the common territories numerous townhouse structures once promoted as worth adds presently read as unsafe aggravations. Who needs to sort out some way to remain six feet separated in a lift? All things being equal, townhouse to single-family changes are settling on less gleaming conveniences. However the tranquility of shedding their face cover when they stroll through the front entryway. Also there’s no avoiding the reality that even at their least expensive, city condominiums are pricier than more extensive homes on the edges. Regardless of whether the move is inspired by a requirement for more space or greater reasonableness, “You essentially get more for being outside the city,” says Gell.
