Spring Market Preview 2024

Spring Market Preview 2024

Spring is rapidly approaching!  While there's a commonplace term called "spring market" that implies a higher level of inventories in the spring, I thought I'd provide a data-based glimpse on what that term actually means.   I’ve incorporated data from last year’s spring market preview, where I also went into depth the reasons why the spring generally sees more inventory.   For a sense of what bidding wars looked like during the 2023 spring market, check out this article and scroll down to the lists of towns and #s of offers.  

Annual Inventory Levels

One dynamic you’ve probably all read about is how 2023 was a historically low point for home inventories.  The below data in the table confirms it.    

In the first three rows, you can see a general trend of decreasing inventory through last year.  Cambridge had a little bump in 2021, but only because no one was buying city condos at the height of the pandemic.  But you can see the steep drop off in single family homes in Acton in 2023 compared to previous years.  There’s a lot of articles online that pretty much say the same thing, that current owners have nowhere to go since their current mortgages are at such a low rate and any new home would have a disproportionate monthly cost due to high mortgage rates, so it keeps people from selling.  

I did the Randolph and Newton searches to highlight the downward trend in affordability.  And this doesn’t even take into account the ~50% increase in monthly cost due to mortgage rates increasing from 2.5% to 6-7%.  $450k has generally been considered to be a high quality entry level home once you get near I-495 in most any direction.  But note how much less stock there is as time goes on–and even with inflation, the cost of the $450k home is much higher than it used to be.  

How much do interest rates affect home cost? 

Here’s a look at how much a $450k home and a $1m home cost based on the average mortgage interest rate of any given year since 2019.  Assuming 20% down payment. Annual averages taken from Bankrate.com.  Below are the monthly costs that include only the mortgage interest and principal.  Don’t forget to include insurance, taxes, and maintenance costs when doing your monthly budgeting! 

Six years of monthly inventory data

Check out our Market Update from last year for an explanation of why property listings are so seasonal.  Also note the 5 year listing data showing what months of the year listings usually come up.  For this year, I’ve just pulled data from the previous 12 months so you can get a sense of what’s been happening.  You’ll see that spring generally has more listings.  

A few quirks to the data below:  (1) I went from February to February, so the January data is actually from 2024 not 2023.  January is generally slow, so it doesn’t really change much.  (2) Prices keep evolving, mostly upwards, so the data sets where I bounded by price show slightly different types of properties from years past.  I wanted to show apples to apples as much as possible, and decided to just keep the same price limits where noted.  (3) Some of the data sets below have very few data points, so keep that in mind it's harder to read into it.  

We see a pretty standard distribution of listings here, as the data set is pretty large and uniform for Cambridge condos. 




Here we see a bit of an aberration with the fall market looking much better than the spring.  This is attributable to the $600k-$900k price point being more sensitive to interest rates.  There are multiple ways to make this connection, for example, people at that price point probably purchased at a much lower price, and might have lower incomes; or might be at a later stage in life and needing to maximize the sale price to help fund retirement.  Either way, the high interest rates and volatile economic conditions kept people from selling their homes.  By the end of summer 2023, we saw rates come down a little and the economy stabilize, which helped people feel more confident about selling in the fall.  

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