2019 Boston Housing Market: To Invest or Not?

Market Trends

Boston metro is home to over four million people and is considered one of the priciest housing markets in the country, following closely behind Washington D.C, San Francisco, and New York City.  With a vast number of universities, college students, and young graduate working adults, the rental market is a hot commodity to invest in.  With such high demand, rental properties go very fast.  In regard to residential real estate, forecasts predict steady annual appreciation rate increases – meaning the housing market will provide a safe investment environment.  Of course, investors prefer to put their money into cheaper markets and expect an increase in property value.  However, the 2019 Boston housing market is already speaking for itself.

According to Zillow, Boston real estate is predicated to appreciate in value by 8.9% this year, which is 2.2% greater than last year’s appreciation rate.  The median sales price of homes is $620,000 and median rental price per month is $3,300 (Trulia.com).  Boston is in the top 10% of cities national that encounters steady real estate appreciation.  This is attractive for investors obviously, meaning that they have a high chance of receiving a solid return on their investment.  In the last quarter alone, Boston’s annual appreciate rate is higher than 50% of other cities in Massachusetts.  So, what does this all mean for investors?

You want to invest!  Boston is a very attractive city to millennials.  Many students and young adults look to move to Boston simply because it is a thriving city with characteristics that greatly appeal to this age group.  The one problem is that it is virtually impossible for millennials to afford homes nearing half a million dollars.  To cater to the demand, an option would be finding an affordable property and converting it into a multi-unit rental property.  Not only would finding tenants be a breeze, you would obtain a significant cash flow monthly. 

Appreciation is also guaranteed.  The demand for property and rentals in Boston is so high and with such limited supply, meaning that property values will only continue to increase annually as more and more people flock to the city for school and work.  While it is difficult to get permits to build, once approved, the payouts will be high.

Lastly, invest in Airbnb.  Unlike in several other cities, Airbnb rentals are completely legal and are not taxed at the moment in Boston.  Taxes on short term rentals are not imposed in the city, meaning that Airbnb owners can avoid Massachusetts high tax rates.  For new investors, investing in Airbnb would probably be the best option.