Find out what real estate insiders have to say about luxury homes in Cambridge and the Greater Boston housing market in 2023.
- Market performance
The housing market has seen steady growth over the last few years and this trend is expected to continue through 2023. Greater Boston has proved to be quite resilient during the pandemic. The housing market is well-positioned to weather any storm because it has a vast talent pool, esteemed educational and cultural institutions, and renowned medical and research facilities that continue to attract high-income earners from all over the world.
Some real estate professionals believe that luxury properties will remain strong in 2023. They also expect new construction and move-in-ready homes to outperform existing homes that require significant remodeling. Read our previous blog post on high-end interior design and home remodeling tips.
- Home prices
According to Realtor, the median price of single-family properties was $849,000 or $782 per square foot as of February 2023. Home sale prices are expected to remain high while inventory remains low, especially during peak real estate activity in the spring and summer. The sale-to-list price ratio remains robust at 98.59%.
- Home sales
Although the home-buying frenzy seen during the coronavirus pandemic has mostly died down, the most desirable properties in Greater Boston are still receiving multiple offers. Local real estate agents are also seeing a return to seasonality with more home sales in the spring and summer months, when buyers are more inclined to relocate.
Many experts believe that the equity-rich market segments, such as the high-end of the market and entry level homes, will be the most prolific this year. High-end buyers in particular will have many options because they are fairly insulated from higher home prices and interest rates. Moreover, they don’t necessarily have to sell to buy.
- Mortgage rates
The Mortgage Bankers Association (MBA) anticipates that fewer homeowners will refinance their mortgage in 2023 due to high rates. Higher interest rates are also expected to put pressure on the housing market. However, Greater Boston is expected to fare better than many other markets in the U.S. The area is known for good schools, top universities, quality healthcare, and world-class amenities, and will continue to attract homebuyers.
Moreover, the luxury real estate market will likely not be as affected by high mortgage rates as other market segments. The luxury market has many high-income and ultra-high-net-worth buyers with cash reserves, or the ability to qualify for lower rates off of private banking relationships.
- Alternative mortgage terms
More buyers may consider applying for alternative mortgage terms this year. An alternative mortgage instrument (AMI) refers to a home loan with non-standard terms or practices. This loan may not be fixed-rate or fully amortizing. It may require periodic instead of monthly payments. It may also require real property as a form of collateral.
- Buyer interest
Despite climbing home prices and mortgage rates affecting purchasing power, buyer interest remains strong in Greater Boston. Many first-time buyers may consider entering the market by rising rental rates this year. Sellers of value-priced and move-in ready properties will likely have an advantage.
- New construction
Like most large markets, Greater Boston needs a larger selection of housing to meet demand, which will likely remain high for the foreseeable future. The rapid rise in home prices has been largely driven by high demand and limited inventory at all levels over the past few years.
Some experts agree that housing inventory will slowly pick up this year, although it will still remain relatively low. There are several high-end real estate developments in the pipeline to meet some of the demand, though Greater Boston will require a healthy balance of affordable, mid-market and luxury homes and rentals.
- Housing demand
Remote work has made it possible for many homebuyers to explore smaller towns, non-urban communities, and remote areas. Luxury real estate and new construction will likely remain strong in communities that attract buyers who work in recession-proof industries.
The luxury real estate market may also see more demand this year. According to the 2022 Coldwell Banker Trend Report , 80% of high-net-worth buyers in the U.S. agree that real estate remains a safe investment. Over a third of respondents believe that real estate is the safest investment they can make compared to stocks, bonds, and cryptocurrency.
I’m Seydyss Barreto, a luxury real estate expert with over $292 million in total career sales. I’m here to help you find luxury homes in Weston, MA and other communities in Greater Boston, Northshore, and Merrimack Valley. You can reach me at 978.590.8918 . You can also contact me via email or contact form and I’ll get back to you as soon as I can.