Metro Boston house prices have officially dropped 12% lower than their peak!
I’ve been seeing headlines like that put out by other Boston-area brokers and agents recently, so I just finished digging into some different stats than I usually do to try to see if I could shed some light on claims like that.
While technically true, it seems that stats like the one in the subject are being taken out of context. Some data is easier than other to pull from MLS based on how it’s sorted, so I had been putting off compiling data for larger areas like Metro Boston since it involves individually pulling data for smaller subsections before manually putting it all together into a chart. Wild headlines like the one in the subject line provided a good reason to take the extra time to see if I could verify the claims.
As a side note, I also needed to figure out what geographic area to analyze before I could start. A quick Google search gave me the impression that there’s no standard for what the terms “Greater Boston” or “Metro Boston’ mean, so I used the version that seemed to be the most reasonable. For these purposes, I’ll be referring to the towns shown in blue as Metro Boston:
Next I pulled data on single-family homes sold for each month from Jan 2014 through Dec 22 for that area and plotted them to see if I could see anything that looked visually obvious regarding the supposed decrease in sale prices. Here’s one of the better ones that does a great job of showing how much prices vary seasonally (price per square foot):
As you can see, there has been an obvious seasonal dip *every year*, which has varied from 89% to 98% from 2014 to 2021. The biggest question I had was whether 2022’s values had actually gone lower than their corresponding prices from previous years, so I plotted each year against each other:
To me, that last chart suggests that while 2022’s dip is larger than any of the years since 2014, there were some years with similar dips, and there were even years where prices actually *did* dip below corresponding points of previous years (2019 vs 2018). 2022’s single-family sale prices in Metro Boston as a whole have still not dipped below corresponding points of 2021, however. Based on articles like these from Redfin and BiggerPockets, it looks like some parts of the country *are* seeing sale prices lower than they were in previous years, so I wouldn’t be surprised if Metro Boston eventually sees some of that in 2023 as well. Stay tuned!
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