Back Bay is a luxurious area of Boston along the Charles River Esplanade. Until the late 1800s, the area was nothing but a bay off the river and not the stunning beauty it is today. A project to clean up the area and bring in a flat waterfront region development began and turned the area around. This sparked the wealthy to purchase land and build stunning Victorian and Edwardian brownstones.
Inspired by the streets of Paris, the charming shops lining Newbury Street, sidewalk cafes, and river walk all offer a trademark charm only Boston knows. Living in Back Bay offers residents a sophisticated urban center with a historic residential feel. Its prime position within the city provides clusters of restaurants, shops, and culture at your fingertips. The residential buildings located among the Newbury Street boutiques lend to the overall appeal and feel of the area, perfect for morning strolls.
Homes in Back Bay range from luxury condominiums carved from historic mansions to stately brownstones and single-family row houses along tree-lined streets. Many condominiums and luxury residential buildings offer amenities like concierge and on-site attendants. With elegant features like carved oak doors and well-manicured lawns, it’s easy to spot the pride of ownership in this affluent spot. From the exquisite architecture and peaceful, tree-lined residential streets to the high-end shopping and dining, it’s easy to see why many are moving to Back Bay.
With a large population of affluent residents and many excellent amenities, you might be wondering about the area’s real estate market. Here is the 2023 real estate market forecast for Back Bay real estate.
Current market statistics
Recent market trends across the Boston area have caused a transitional period. The increase in mortgage rates has created a stalemate, with homebuyers taking a step back and thinking twice before purchasing homes. This has helped inventory levels to improve, but home prices have yet to drop. As mortgage rates remain unstable and the potential for a recession, residents wonder what will come of the housing market.
Affordability remains a hurdle to many Americans, especially with increased home prices and mortgage rates. Although the median housing price in Back Bay has decreased since its significant numbers in the past few years, buyers still aren’t willing to pay over the asking price. The median list price in Back Bay sits around $2.99 million, a 10% increase. That said, the average sales price has gone down 5%, to $2.26 million. Meanwhile, there are approximately 18.17 months’ of inventory on the market.
What’s the difference?
A seller’s market means the demand for homes exceeds the supply, while a buyer’s market means there are far more homes than the demand. The housing market has seen a slight decrease in home prices while the number of available homes has only slightly increased. This insignificant increase doesn’t necessarily shift it toward a buyer’s market, but the time homes sit on the market might.
With homes averaging 97 days on the market this year versus 65 last year, we can see a lean in favor of buyers. The positive news for buyers is that they aren’t likely to engage in bidding wars. A bidding war is when one buyer competes with another for a particular property. This is typical when demand exceeds supply in a given area. While it benefits buyers and sellers, buyers have it easier when they are in control and not in competition. Though buyers may have it easier, the cost of living in Back Bay is still high, and so are mortgage prices. So, what options does this leave for buyers?
Luckily, buyers have several options when it comes to seeking a mortgage and saving money. A commission rebate is relatively simple, and utilizing one in any market is a great way to save money in any market. In this case, a real estate broker would give the home buyer a portion of the commission received for representing the buyers. Working with a brokerage that offers commission rebates helps homebuyers save thousands of dollars, which is excellent in a high market. These savings can help toward closing costs, rebuilding savings, or furnishing the new home.
Future predictions
While the days of low mortgage rates and home prices are over, not all is lost, and there is plenty of evidence showing the inflation trends are beginning to mellow. Many homebuyers are seeing lower rates than last year, and assuming this downward trend continues; homebuyers will gain new confidence.
The potential issues fall within the inventory, which has declined due to the historically low rates of 2020 and 2021. Though we are seeing improvements in inventory, the increase in Back Bay homes for sale is lower than in other areas of the nation. The hope is that with mortgage rates evening out, sellers will begin to list their homes again, generating more outstanding inventory. Many residents want to keep their homes and current rates, often wondering why they should sell only to find something smaller or with a larger monthly payment. If the rates continue a downward trend, the hope is that homeowners will feel confident in selling, opening up opportunities for buyers.
Looking for Back Bay real estate? Work with a qualified agent
The Back Bay real estate market is seeing a slow but steady movement toward a balanced market. Mortgage rates are beginning to decline, inventory is slowly rising, and current home prices remain reasonable. Real estate markets often fluctuate, sometimes daily, so it’s not easy to make specific predictions about what might happen. With these trends, the hope is that rates will continue to fall, allowing homeowners to list their homes and buyers to snag them for reasonable prices. If you’re ready to look at available homes in Back Bay, contact Will Argabrite. As a trusted realtor in Back Bay, he’s happy to help.
