Massachusetts is expected to see a highly competitive housing market this summer, despite increased interest rates. With limited inventory and a large buyer pool, prices are likely to remain high. David McCarthy, president of the Massachusetts Association of Realtors, highlights the drastic decrease in available housing stock over the past 15 years.
High Rate Downer
Higher interest rates have discouraged potential sellers from listing their homes, worsening the inventory issue.
Furthermore, new home construction in the US has not fully recovered since the 2008 financial crisis. McCarthy argues that many Massachusetts communities have implemented rules that obstruct new construction.
To address the housing crisis, the state has required 175 communities to submit plans for multi-unit housing near public transit stops, a mandate established under former Gov. Charlie Baker’s administration.
Although the impact on the housing market will take years to materialize, McCarthy sees this as a positive step and urges Gov. Maura Healey’s administration to further incentivize construction.
Commercial Real Estate: A Mixed Picture
The commercial real estate market presents a mixed picture. Charity Edwards, president of the Realtors Commercial Alliance of Massachusetts, reports that vacancy rates have not fully recovered from the pandemic.
However, industrial spaces, such as warehouses and manufacturing plants, are thriving due to large companies like Amazon.
Cannabis businesses are also expanding their real estate presence. Some politicians and housing advocates suggest converting vacant office buildings into housing, though Edwards emphasizes that this process is more challenging and costly than it may seem.