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Interesting to see that as the Boston real estate market slows, demand for the rental market is picking up and rents are rising in the city for the first time since 2001. This would indicate to me that there is a surplus of people sitting on the sidelines waiting to see the direction of the market. When we see the proverbial bottom of the Boston real estate market, prices should rebound fairly quickly as demand will be strong.

It is interesting to watch the group think of real estate buyers. A year ago we were seeing homes selling so rapidly that people were making irrational decisions. Now with the market pulling back, everyone is waiting for the Jones to tell them that it is safe to buy again. Once that happens prices will shoot up with all of this extra demand.

Surging mortgage rates, high home prices, and a belief that prices may tumble are driving more people to give up on or postpone buying a home and to rent instead.
Buying property “is less attractive than it was a year ago,” said Tom Meagher, president of Northeast Apartment Advisors Inc., an Acton research and consulting firm. In a housing boom, he said, people “make sure they don’t miss the train when rising prices might freeze them out of the market. It works in reverse if prices are in decline. People don’t want to be a homeowner.”
The average monthly rent in Greater Boston climbed to $1,355 this spring, up 3.6 percent from a year earlier, according to a survey by Northeast Apartment conducted over four weeks during late March and early April. The survey stretched as far west as Worcester, and from New Hampshire to Rhode Island. The rental rate is now the highest it’s been since 2001 and halts four years of declines. The national market also peaked in 2001 but has started to rise again recently, too. via the The Boston Globe.

Related posts:

1. Boston Condo Market Peaked - Huge Inventory Available
2. Boston Housing Bubble Bursting? And is that bad?
3. Boston Real Estate Flippers Face Tough Condo Market
4. As Housing Drops, Rents Increase at Rapid Rate
5. Poorer Boston Communities See High Mortgage Default Rate and Double Digit Appreciation