Greater Boston area was hit by the recession in the past few years, and it saw its share of foreclosures and defaults. This was, however, true for most of the country and, looking on the bright side, Boston has been more stable in the home pricing situation than many cities across the U.S. Experts predict that the recovery from recession, at least in real estate – both commercial properties and residential, begins this year. It will not be immediately noticeable; in fact, there’s a chance that real estate prices will go down before starting to level up and increase. But one thing’s for sure (if they’re right): the process of recovery will begin in 2012 and, by 2013 pick up the pace.
Boston is poised to lead the charge in this year’s real estate market rebound – again, assuming real estate forecasters have it right. The specific Massachusetts area housing markets that experience significant rising prices or new construction are likely to be those that start the year with stronger area job growth and fewer empty homes holding back the market. Based on these factors, for discerning investors, it is a good idea to keep an eye on the Boston area: The Cambridge-Newton-Framingham market just west of Boston is a strong job generator and, like most of New England, it missed the worst of the housing bubble. Also, the area west of Boston is a technology center, with high-skill manufacturing industries and education levels that are well above the national average. As the recovery proceeds, smart cities such as Boston are the vanguard. One expert aptly calls it ‘the revenge of the nerds’!
image by wikipedia
Just like last year, the technology, medical and education sectors will continue to spur positive net absorption. This translates into a greater demand in Cambridge, Back Bay and Waltham – pushing them to the forefront of the current expansion cycle. Premium properties in these areas will experience rent increases and an ongoing decline in vacancy. Commercial property growth will have an impact on residential home prices. However, in all probability, things won’t change much for older properties at the back of the market, specifically on Route 495 and Route 3, because of their location and the fact that many are functionally obsolete.
As always, the general economic state of the country (and the world of course) is the major determining factor in real estate forecasts nationwide. If it stays the way it is, home prices shouldincrease. Although they might dip a little more initially, it is unlikely to be big and, after that, the process of recovery is thought to begin. Many experts are of the opinion that now is the ideal time to consider a home purchase. Waiting until the last moment could face borrowers with an uptick in prices that put some homes out of reach. The prices may be low right now. But looking ahead, they’re going to climb – and it’s something that is bound to happen sooner rather than later by the looks of it.