Not just Peak #LuxRE, Boston home values have ‘likely peaked’ – GBAR
A month after we began asking tough questions about the luxury housing market, it seems that the Greater Boston Association of Realtors is also saying Boston Housing values have “likely peaked.” This tweet reflects some of the stats underlying their prediction:
From broken link below:
1. Median sales price of SF homes = record-high $ 605K in Sept but 1.7% rise YOY marks 5th month in 2019 w/ less 2 % increase YOY;
2. SF Sales off 32.4% from Aug
3. Condo median dropped 3rd consecutive month, off 4.1% record year ago to $ 549K#BosRE https://t.co/vpy7G0z82H
— Bill Wendel (@RealEstateCafe) November 2, 2019
That’s started a debate on BostonBubble, a peer-to-peer bulletin board homebuyers have used to track the overheated housing market locally since 2005. That crowdsourcing site is no longer closely moderated so we’re inviting thoughtful comments on our intranet. Here’s a sample if you’d like to join us, on or offline.
Guest comment on BostonBubble:
Home prices always peak from April to June and take a dive in the winter months, but spring of 2020 looks to be another year of price increases because rents are still going up. We really need a recession or rent control to truly tank the housing market.
http://bit.ly/BosRE_AptRentsNov19
Our reply:
Thanks for your comment and link from Curbed Boston. Can we invite readers to address your assertions, not to be adversarial, but to inform homebuying and selling decisions?
ASSERTION #1. Prices are seasonal, don’t mistake the margin movements this Fall with softening overall.
REBUTTAL #1: Agree prices are seasonal and changes month to month are easily documented by graphs. However, the median prices cited by GBAR are Year over Year and inspired this quote:
“These conditions have the realtors association suggesting the once unthinkable: That the Boston-area housing market—so long the domain of ceaseless escalating prices, vicious bidding wars, and often paltry inventory—might be turning in favor of buyers.
‘The sellers’ market is likely over, or at least the balance has shifted,’ Jim Major, president of the Greater Boston Association of Realtors.”
ASSERTION #2. Rents are still going up so sales prices will likely increase in Spring 2020.
REBUTTAL #2: Rising rents do not increase purchasing power, they deplete it.
Further, the Curbed Boston article you shared ends by suggesting rents may begin to fall in 2020. “Perhaps now that the Boston area’s for-sale market is cooling a bit more tenants will jump into that and free up space in the rental market, thereby bringing rents down.”
ASSERTION #3. We really need a recession or rent control to truly tank the housing market.
REBUTTAL #3: The lowest interest rates in three years juiced purchasing power and prices earlier this year, but there’s only so much demand you can pull forward. Further, demography is destiny, so watch for more signs the housing market has reached a #RETippingPoint in 2020 as we enter the first phase of the Great Senior Sell-Off:
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Glad to continue a friendly debate offline over coffee or beer nearly any evening. Working on a series of topics for #REonTap. What would others, particularly potential homebuyers or sellers who fear they may have missed the top of the market — #PeakRE, like to discuss in a friendly, civil way? Hope the content and tone of what’s written above attracts thoughtful responses, here, on Twitter or inside the RealEstateCafe’s private discussion room: