That’s when the Federal Reserve started tightening the screws, ending our sugar high of historically low interest rates in an attempt to get a hold on inflation. The post-covid-lockdown period has certainly come with a variety of challenges and uncertainty.
As we start to transition into this period, it’s worth asking what the housing market is transitioning to. Do you think it could be...normal? 3% interest rates are certainly not normal. Having 50 buyers bid on a house is not normal (as nice as it was for sellers).
I’m not trying to say that high interest rates are a good thing. But what, historically, is a high interest rate? 5%? 6%? Is even 7% a high rate? Not historically. Just for perspective, I’ve got folks in my office who laugh and tell me, “I bought my first place at 15%!” (BTW, not normal either)
Even at higher interest rates, the sky will not fall. Sellers will still be getting a nice return on their home. Buyers will not have to get into ridiculous bidding wars over homes. There is no bubble to burst. Will a recession come? Yes! They always do!
I bought my previous home in August of 2008. I paid $640,000. In 2010, in the middle of the meltdown, the unit next door to mine, essentially the same unit, sold for $575,000. In 2020, I sold my unit for $1.1m.
Let’s get a grip on what we have here in the Boston area. A super-strong economy with varied industries that is creating thousands of jobs. A vibrant city that is the envy of most of the rest of the country. Over the last decades, Boston real estate has been a super investment. Even in the 2009 meltdown, we saw minimal losses and a vibrant recovery. At this time, our market is much healthier. Home equity far surpasses what it was then. The average credit rating of current mortgage borrowers is significantly higher. The structural problems in the mortgage industry have been mitigated to a high degree.
Here is the detailed market report for *all* Boston neighborhoods and inner suburbs.
If you have questions about buying or selling Boston real estate, please call me at 617-584-9790, or send me an email at firstname.lastname@example.org.