Even as the economy went into freefall last year, one part of it only got hotter: large segments of the real estate market soared.
Justin Taylor of Stoneham was very nervous about trying to find a single-family home with his partner. “We heard the market would be so competitive.”
Like a lot of homeowners, Taylor found his condo was no longer an option as the pandemic continued. “We just needed a bigger place. A one-bedroom condo wasn’t going to do it with both of us working from home.”
When they found a house in Medford that fit most of their needs, they pounced on it, even though it needed a new kitchen and bathroom. “We got a place in the location we wanted, with the size we wanted, but we’re going to have to put a lot more work in than we expected.”
Just finding a place is a lot of work these days. The Greater Boston real estate market was on fire last year.
Broker Marie Presti, owner of the Presti Group with offices in Stoneham and Newton, said she had her best year in residential real estate last year. "I wasn’t expecting that," she added.
It looks like 2021 is starting right where 2020 left off.
"Right now, it’s still very busy," explained Presti. She said November sales year to year were up 15% and prices climbed another 16%.
The pickings are slim in the suburbs as we start a new year. Presti explained that there under two months worth of inventory in the suburbs around Boston. “That’s completely different than downtown Boston which has over seven months supply of inventory.”
Buyers continue to want bigger houses since they’re spending so much time in their homes. Spacious yards are a must too. The idea of sharing an elevator or a common space can still be scary.
"The vaccine has just started to come out, so I think the attitude is very optimistic that eventually everything in downtown Boston will go back to normal," said Presti. "But, the really big question is when."
One of the big catalysts for the real estate boom was historically low interest rates. Bob Driscoll, senior vice president for residential lending at Rockland Trust, said it was a frenzy as people tried to buy or refinance properties. “I do think we’ll be in the low rate environment for at least a couple of years coming or so.”'
Driscoll says fixed-rate mortgages in the 2% range prompted some new buying trends. “One of the things we’re seeing right now in this market is the second home, Cape Cod, New Hampshire, the regional New England. I think what’s happened with the pandemic is that people have re-thought what they’re going to do.”
Still, buying even a starter home can be a stretch for some people, particularly as prices spike. This year, renters might get some relief.
The rental market has softened, according to Presti. "I’ve got some landlords who have had to take a drop in what the true market value of a rental is, to get someone in there."
Images of people lining up for food remind all of us that the pandemic has left many families struggling to pay for the basics – including housing.
Alex Ponte-Capellan, a community organizer with City Life/Vida Urbana in Jamaica Plain, says his caseload for those facing a housing crisis continues to climb. He says many thousands of people locally are living with the specter of foreclosure or eviction.
"Right now, eviction filings are steadily increasing, and in 2021, we’re going to see more and more eviction filings if nothing is done," added Ponte-Capellan.
His group is advocating for more help from Beacon Hill, fearing we’re about to enter a devastating cycle.
“It’s hard to think about finding a new job or going to work if you’re on the street. If you’re in a shelter,” said Ponte-Capellan. “It’s going to be a huge detriment for people being able to get back on their feet.”
The year ahead