Blog Post  Learn about the 2022 Spring Housing Market

Spring has sprung, and just like the weather, the housing market continues to warm up.  Home purchase prices and rental costs are at record highs across the nation and in the Commonwealth. The biggest hurdle for Massachusetts homebuyers, like tenants, is the low inventory of listings on the market.

This month roughly 7,000 homes were listed for sale on the online real-estate marketplace, Zillow.  While home purchase prices are up almost 8%, the median single-family home comes in at $750,000. At the end of 2021, rents had increased by 11% compared to the same time a year prior according to Colliers International. The average 1,000-square-foot apartment currently rents for about $2,700 a month, which is the largest jump seen in decades. This significant increase can be attributed to strong demand and rapidly decreasing vacancy rates. BostonPads, a rental brokerage data tracker, estimates the current vacancy rate in Boston at less than one percent.

Outside of Greater Boston, overall housing inventory has dropped 14% with a 40% plunge in high-end supply. In the first week of February, there were only eight homes for sale in Wellesley, MA, a fifth of the amount from two years ago. The cheapest of these homes was listed for $1.1 million.

With such scarce inventory, acting fast is a necessity. As mortgage rates continue to rise, buyers are locking in purchases as quickly as possible, which is further intensifying demand. This drives up prices not only in expensive commuter suburbs but across the state. Difficulty finding homes forces consumers with million-dollar budgets to buy into surrounding towns, squeezing affordability, and increasing entry prices.

With more competition and less supply, consider these tips during your Spring housing hunt:

• Be sure you are ready to commit to a loan and move forward with the preapproval process. With a preapproval, you know exactly how much you can afford. Preapproval letters also strengthen a buyer’s offer.
• Select a reputable real estate agent who is responsive and understands your needs. Ensure you are doing business with a licensed real estate agent or broker. Check the license of the individuals you would like to work with using the Division of Occupational Licensure’s online tool.
• Decide on the compromises you are willing to make. In such a competitive market, you may not get your first choice with all the amenities you are looking for. Discuss with your family and agent the concessions you will make, such as central air conditioning or location.
• Buy adequate home insurance. Before closing on your new home, you will be required to purchase insurance. If damaged or destroyed, insurance can help pay to repair or replace your home and your belongings. Visit the Division of Insurance’s website to learn more about home insurance or verify the company you are planning to do business with.

Borrowing money and purchasing a home is a big commitment. Visit the Division of Banks Consumer Money Matters online resource for details on the home buying process in Massachusetts.