In recent years, Massachusetts has experienced a massive uptick in real estate prices and a flurry of competition for properties in the best areas. Both commercial and residential properties have seen an increase in price and in buyer demand since 2019, but the markets continue to change.
Both property owners and those considering buying real estate in 2023 may benefit from familiarizing themselves with how the market has changed in the last year or so. What has changed in the 2023 real estate market that could affect someone’s transaction?
Interest rates are up noticeably
Part of what pushed the buying spree in 2020 and 2021, other than the surge in remote employment, was the continuation of historically low interest rates. That trend has since reversed, with rates climbing up to the highest they have been in over a decade. Although plenty of people will still buy despite the higher interest rates, there has been a bit of a cooling off in demand because of those higher rates. The pressure of higher interest costs has slowed the rapid growth of home prices.
Supply improved but remains low
There are more properties to view now than just a few years ago, and they may sit on the market a bit longer than previously before selling without multiple offers. Especially when it comes to residential properties, the number of listings continues to remain lower than average, in part because sellers worry about their ability to secure alternate housing. Certain kinds of commercial properties are easier to come by on the market than others. Multi-unit homes remain popular, as do retail facilities in or near residential neighborhoods. Higher interest rates and a shifting economy have started to put pressure on certain aspects of the commercial real estate market, including multi-office buildings.
With fluctuating prices and interest rates, having protective documents in place during a real estate transaction has arguably never been more important for both buyers and sellers. Adjusting one’s plans to reflect the current real estate market and being proactive about embracing protections, like contingencies in offers, will be important for those who are attempting to navigate the real estate market in Massachusetts.