Boston’s real estate market is showing early signs of downturn following a decade of record breaking price growth. Boston real estate prices have more than doubled since 2012, and now in 2022 the city’s 1-year median sale price is $810K for single-family homes and $719K for condos. However, a price correction appears imminent due to rising interest rates and demand destruction.
Are Real Estate Prices Going Down in Boston?
As of July, real estate prices have not dropped in Boston. For single family homes, the 1-year median sale price in Boston is up +3.66% compared to January ($781K) and +7.29% since September of last year ($755K). For Boston condos, the 1-year median price has increased by +2.69% since January ($699K) and +5.71% since September.
| Area | 1-Year Med Price Jul 2022 | 1-Year Med Price Sep 2021 | % Change | 1-Year Med Price Jan 2022 | % Change |
| Boston Single Family Homes | $810,057 | $755,000 | 7.29% | $781,474 | 3.66% |
| Boston Condos | $718,814 | $680,000 | 5.71% | $699,989 | 2.69% |
Will housing prices in Boston go down?
At this point, it does appear that home prices will go down in Boston in the near future. Median home price growth has decelerated by 50% during the first half of 2022 and total 1-year sales are down -3.82% since January 1. Over the same time span, total real estate inventory is up +124.16%. With inflation still rampant and more rate hikes on the horizon, housing demand will be stifled as we head towards 2023. Look for median price growth to level off and begin to turn downwards during the final quarter of 2022.
| Area | Jul 2022 | Jan 2022 | % Change | Sep 2021 | % Change |
| Total 1-year Sales | 7,457 | 7,753 | -3.82% | 7,397 | 0.81% |
| Total Inventory | 1,605 | 716 | 124.16% | 1,113 | 44.20% |
Is it a good time to buy property in Boston?
Regardless of the speculative price drops, it still is a seller’s market in Boston. Prices may be peaking at this very moment, so this is not the best time to purchase real estate in Boston. Over the year, prices will likely come down by 5-10% due to the impending recession. The best time to buy a property in Boston may be in 9-18 months depending on the market recovery outlook at that time.
Is Boston real estate overvalued?
Boston real estate is not overvalued due to the changing demographics of the city. Over the past decade, Boston has emerged as one of the largest tech hubs in the world. Boston attracts the 3rd most venture capital out of all US Metros according to Pitchbook. This has attracted many high-salaried working professionals to Boston and placed enormous pressure on the already tight supply of properties.
With Harvard and MIT pumping out arguably the best recruiting pools in the country, Boston will continue to attract opportunity and white-collar workers in the years to come. So even if real estate prices dip over the next 1-2 years in Boston, expect home prices to resume an upward path when the economy recovers.