This year, for the first time in half a decade, property owners who wanted to sell breathed a big sigh of relief. Because, finally, this spring, Boston’s housing market rose out of the recession doldrums. In fact, not only were houses fairly flying off the chopping block, most were fetching above asking price.
After a traditionally quiet summer season, other parts of the country are reporting a stabilization in the market, and an increased inventory, as many homeowners hurry to take advantage of still low interest rates. A fear of more federal increases in the prime lending rate that slowed the market is coaxing many to sell. In Boston and Cambridge, however, the market has picked up where it left off in spring.
“To the surprise of some people, the market is still extremely active in Boston, Cambridge, Brookline and other towns,” Henry Amar of Zip Realty tells Metro. “And we still see multiple offers at seven to 12 percent over asking in Boston for certain buildings, and multiple offers over asking by five to 12 percent in Cambridge, too.”
There is more bad news for buyers: “ Inventory is even lower than in the spring, actually,” says Amar. “The interest rates jumped from around 3.25% to 4.5% on average, but this did not slow down buyers. There are a couple of reasons for that," he adds. “Historically, the rates are still low and there is the threat of an increase greater than that next year. So buying now rather than waiting seems attractive.”
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Assured by a large and consistent transient population, be it for school or business, the Boston market attracts foreign investors, many buying properties to use as rental units, which sucks up inventory and drives up prices. “Depending on which part of the city, we see 50 to 75 percent of the accepted offers as 100 percent cash offers with lots of foreign investments from Chinese and European buyers living abroad," Amar says. Amar was curious at the appetite of foreign investors for properties and asked some buyers or their representatives why. “They tell me it’s because the political system is stable in the U.S.,” says Amar. “Hence, it makes a stable investment property that they then rent.”