After many years of expansion and growth nationwide, most co-op and condominium markets saw both turbulence and some overall decline in 2018. The market has turned from one favoring sellers to one more hospitable to buyers. Markets like stability – and 2018 was a year marked by uncertainty. This uncertainty can be pegged to several trends, the most prominent of which were fluctuations in interest rates; changes in tax laws thanks to the 2017 tax bill depressing the tax benefits of home ownership; overbuilding (and potential overbuilding); and – despite the generally good employment figures – an undercurrent of declining confidence in the overall economic picture.
“The trajectory of Massachusetts’ skyrocketing real estate market flattened as winter loomed,” reported realestate.boston.com, “leaving some to wonder whether we’re glimpsing the end of a 10-year-long bull run. Like people who predict the end of the Patriots dynasty each year, they will eventually be correct, but real estate experts say we’re not there yet.”
As in other pricey markets, signs on the horizon of a potential end to the Boston real estate fairy tale are centered around tax policy and rising interest rates. Like New York and Illinois, Massachusetts is a high-tax state, and the result of the reduction of property tax deductibility on federal income taxes is beginning to make itself felt. Rising interest rates have also played a role, as buyers are very sensitive to every additional penny of monthly cost, the article continues.
Bobby Woofter, Principal Broker for My Boston Condo, sees the market as very healthy. “There’s so much new industry moving into the area: General Electric, Amazon, and others,” he says. It seems like a new building is going up every week. That makes for a healthy market.” The people who work there need someplace to live. “The luxury boom continues,” Woofter adds.
He does see some dark clouds on the horizon, however. “There may be a lag due to the climbing price point. It can’t just keep going up, passing the last deal. There is more inventory than one year ago on the market – especially luxury – but mid-market is very bullish and competitive.”