Within national media stories on real estate, read past alarming headlines, and read in between the lines, to truly understand the state of the market. For example, Realtor.com recently proclaimed “11 Cites Where Home Prices Are Falling—and the Steepest Drop Will Shock You.”
Between the lines: In that list of the 11 cities with price drops – headed by Miami – these communities all faced extremely high price increases over the two years prior. Many of these cities possessed huge tracks of land to build new homes. Further, some of these communities faced overbuilding that led to modest price drops.
Yes, mortgage interest rates remain stubbornly high, adding to the cost of owning a home, which may deflect buyers. However, mortgage rates at or near 7 percent should be put into perspective; historically these rates are either in line or even low when compared with mortgage rates over the last 20 years.
Back home, in the Boston and Plymouth areas, on-the-market homes remain scant by historical standards, and little room exists to build more dwellings. Given the steep appreciation hikes over the last couple of years, economists are predicting a return to slower appreciation, but not a dip in prices. With no crystal ball (pardon that overused metaphor) buyers and seller trying to predict market direction may do better to apply what we do know: Over time, on average, homes will continue to appreciate four percent annually.
Perhaps that is the most important metric we should cling to in order to determine whether and when to buy and sell. History shows that real estate remains your best investment.
Yes, interest rates impact a buyer’s ability to afford a home — and dictate how much home one can afford. However, you can refinance if rates come down. If you have compelling reasons to move, why are you waiting?
Are you a baby boomer ready to downsize close to your existing home, or pursue a desired new lifestyle near the ocean or on a lake, or warmer temperatures year round? Are you seeking a smaller home or a similar-sized home to accommodate family and friends when they come to visit, or to care for an elder parent — either near where you live now or out of state? Do you want to remain close to good doctors and medical care?
Are you ready for condo or communal living? Ask for our short, simple questionnaire to gauge where you sit on the home spectrum, which will help you plan your next move, whether it is soon or years away.
To discuss the market further, contact Beth Davis (617-504-8499; Beth.Davis@kw.com) and Steve Feldman (617-417-3125); SteveF@kw.com.