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If you’ve scrolled through Boston real estate listings in the last year or two, you’ve probably noticed a recurring theme: properties are in short supply, and what’s available sells at lightning speed. This isn’t your imagination—concrete numbers back it. Below, we’ll dive into some key stats comparing today’s housing inventory to the pre-COVID market. We’ll explore why “used” (existing) homes are so scarce and examine how it impacts buyers and sellers alike.
A Quick Glance at the Stats
1. Months of Supply
- Before COVID-19 (2018–2019): The single-family market in Boston typically saw around 2.5 to 3.0 months of supply. (A balanced market is often considered 4–6 months.)
- Recent Data (2023–2024): We now see just 1.0 to 1.5 months of supply—sometimes even below 1 month in highly sought-after neighborhoods.
Why it matters: A drop from ~2.5 months to ~1 month signals an exceptionally tight market. If no new homes came on the market, we’d deplete existing inventory within about a month, putting tremendous pressure on buyers and pushing prices upward.
2. Active Listings
- Before COVID (Q2/Q3 2019): Boston’s single-family market often had between 1,500 and 1,700 active listings in peak months.
- Recent Data (Q2/Q3 2023): Active single-family listings hover around 1,000 to 1,200, depending on the month and specific Boston neighborhood.
Why it matters: A 20–30% drop in active listings can seriously limit buyer choices and ignite intense competition for what’s out there.
3. Median Days on the Market
- Before COVID: A median of 25–30 days on the market for single-family homes.
- Recent Market: A median of 10–15 days, with many properties accepting offers in under a week.
Why it matters: Homes are moving far faster than they did just a few years ago. Buyers have little time to deliberate—and sellers benefit from multiple, often competitive, offers.
4. Price Appreciation
- Historical Annual Appreciation (Pre-2020): Boston real estate appreciated around 5–6% annually in many neighborhoods.
- Peak Pandemic & Beyond (2021–2022): Some estimates show 8–10% annual appreciation, especially for single-family homes in desirable locations.
Why it matters: Steep price climbs underscore the classic supply-and-demand imbalance. Even though rising mortgage rates in 2023 have tempered some enthusiasm, low inventory keeps prices relatively high.
Why “Used” Housing Inventory Is So Tight
- Lock-In Effect:
- Many homeowners refinanced or purchased at historically low mortgage rates in recent years. Now that rates are higher, they hesitate to sell and give up that low interest rate. This creates a “lock-in” effect, where homeowners stay put much longer than in a regular market.
- Reluctance to Sell in Uncertain Times:
- The broader economy, inflation, and shifting workplace norms (e.g., remote or hybrid work) make some homeowners cautious about selling. Add a tight rental market to the mix; many prefer to hold onto their property.
- Aging in Place:
- Boston’s population includes many retirees or near-retirees who opt to age in place rather than downsize. Fewer downsizers mean fewer “used” homes hitting the market, exacerbating already tight supply.
- Limited Move-Up Opportunities:
- In a high-priced, low-inventory environment, homeowners ready to “move up” to a larger or more modern property can’t find suitable replacements. This stalls the entire chain, preventing smaller or starter homes from hitting the market.
Why New Construction Hasn’t Solved the Shortage
- High Construction Costs: Lumber, steel, and labor costs have all soared, pushing many new builds into higher price brackets that first-time or mid-level buyers can’t afford.
- Zoning & Regulatory Barriers: Boston’s dense, historic neighborhoods have strict height restrictions and complex approval processes, slowing the rate at which developers can deliver new units.
- Long Lead Times: Even if a developer breaks ground today, it can take years before units are move-in ready. That doesn’t address the immediate shortage.
- Buyer Preferences: Many Bostonians love the charm and character of older properties. New developments—often in targeted areas like Seaport or East Boston—may not meet buyers’ preferences for an established neighborhood feel and price.
How This Impacts Buyers and Sellers
For Buyers
- Act Quickly and Strategically:
- With median days on the market down to 10–15, you must move fast. Get pre-approved for a mortgage and be ready to make a firm offer.
- Expand Your Search Parameters:
- Consider neighborhoods slightly off the beaten path. You might find more options and less competition outside the most in-demand zones.
- Look for Hidden Value:
- Homes needing light renovations or cosmetic updates can sometimes be less competitive. A smart remodel could transform an overlooked property into your dream home.
For Sellers
- Competitive Pricing Still Matters:
- Though it’s a seller’s market, a reasonable listing price can spark bidding wars that drive final offers even higher. Overpricing can still deter buyers.
- Maximize Your Home’s Appeal:
- High-quality staging and professional photography can help your listing stand out in an environment where buyers act quickly based on online impressions.
- Plan Your Transition:
- If you’re selling and then buying, the tight market can challenge both sides. Consider contingencies like rent-backs or longer closing windows to give yourself time to find your next property.
What Lies Ahead
While new construction projects are in the pipeline, they won’t single-handedly resolve the shortage of existing homes—especially in land-constrained neighborhoods. Factors like local zoning laws, the lock-in effect from low mortgage rates, and strong demand for “used” housing suggest the inventory crunch will continue for the foreseeable future.
Staying proactive and flexible is essential for buyers. If you’re a homeowner contemplating a sale, now could be a strategic time—provided you have a solid plan for your next move.
Ultimately, Boston’s ongoing inventory shortage underscores the importance of market-savvy decisions. Whether you’re aiming to buy or sell, partnering with a knowledgeable local real estate professional can help you navigate historically low inventory levels and find success in this competitive landscape.
Need personalized insights?
The data tells a compelling story: Boston’s “used” housing market remains at record lows, driving fast sales and firm prices. If you need guidance to make the most of these market conditions—buying or selling—reach out for a consultation. You can thrive in this environment despite the challenges with the right strategy.
