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July 2022

The first half of 2022 saw an unprecedented rise in the value of residential real estate in Greater Boston. According to the S&P Case-Shiller Greater Boston Price Index values rose 35.4% from April 2021 to April 2022. S&P Case-Shiller Price Index.

What is next? According to The Boston Globe’s financial columnist Larry Edelman, in a July 14, 2002 article entitled, Boom times are over for US housing market. But don’t expect Boston to bust:

In overheated cities such Denver, Nashville, and Seattle the number of homes on the market is starting to climb, price growth is easing, and sales are slowing. Across the country, a growing number of buyers are backing out of sales contracts. The days when sellers could count on multiple offers above asking price may soon be over.

In Greater Boston, the data tell a somewhat different story, at least for now. The inventory of homes for sale here shrank by 19 percent in June from a year earlier, according to the most recent Zillow data.

Boston’s (relative) moderation on the way up over the last decade may mean a more moderate slowdown. The local market will also benefit (again on a relative basis) from the region’s continued allure to young, well-educated, and high-earning workers. Our progressive social policies may attract homebuyers who are now thinking twice about fast-growing but conservative states such as Florida and Texas. And Massachusetts’ long-term problems of too little new construction and too many restrictive zoning regulations show no signs of being solved.

We fared better than the rest of the country when the housing bubble burst in 2007. Absent a full-blown recession in the next year or two, Boston should be OK.

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