Massachusetts, home to Boston and Cape Cod, is known for its high rental rates and home values. The state has experienced significant population growth in certain cities and neighborhoods, attracting both international immigrants and internal migrants. The commercial real estate market, especially in emerging asset classes like data centers and existing classes like office space, is also on the rise in Massachusetts. In this article, we will explore the fastest-growing real estate markets in Massachusetts in 2022, from luxury markets like Barnstable, Wellesley, and Concord to more affordable hotspots like Worcester and Springfield.
Massachusetts Housing Market Stats in 2022
Image source: Sanaulac.vn
The housing market in Massachusetts is booming, with rents and home prices surpassing previous records. The state's rental rates and home prices are well above the national average, with a significant increase in just a short period. In February 2022, the median price of a single-family home in the United States was a staggering $408,100, representing an increase of over $85,000 from January 2020, as reported by CNBC's Make It.
The average rent has also increased. According to an article by Abha Bhattarai, Chris Alcantara, and Andrew Van Dam in The Washington Post, average rent in the United States has increased by 11.3% year over year. While the average American renter currently pays $1,326 a month, the average asking rent has risen to $1,900 in the United States. In Massachusetts, both real estate prices and rental rates are well above the national average.
Average Rental Rates
Image source: Sanaulac.vn
Massachusetts is among the ten states with the highest average rent. The state follows Hawaii, DC, California, New Jersey, Florida, New York, and Maryland, with an average monthly rent of $1,645. However, some towns and cities in Massachusetts have much higher average monthly rental rates. According to an article by Liz Hughes in Boston Agent Magazine, renting in Cambridge, Boston, and Brookline is particularly expensive. Zumper's Boston Metro Area Report reveals that a typical one-bedroom apartment in Cambridge, Boston, and Brookline goes for $2,580, $2,410, and $2,200, respectively.
Neighborhoods in the Greater Boston Area with the fastest-growing rental rates include Lawrence, Cambridge, and Melrose. As reported by Ake Freudberg in an article for Boston's local NPR outlet GBH, median rents for one-bedroom apartments in Melrose, Cambridge, Waltham, and Framingham have increased by at least 30% compared to last year. Average increases in these areas range from $550 to $650 more each month. Rents in Brookline and Lawrence have gone up by 15% and 18.7% year over year.
Home Values and Sale Prices
Image source: Sanaulac.vn
Prospective buyers across Massachusetts, not just in the Boston real estate market, are facing challenges in affording home prices. According to Zillow, the typical home value in Massachusetts was $577,676 in April 2022, almost $170,000 above the national median selling price. Over the last year, the typical value of a single-family home in Massachusetts increased by 15.9%.
In March 2022, the median single-family home price reached $560,000, marking a new all-time high for Massachusetts, as reported by WBUR. Nantucket and Martha's Vineyard had the highest median selling prices in April, although total sales of single-family homes declined in most counties across the state.
While some real estate industry experts believe prices will start to fall as housing stock increases and mortgage interest rates rise, housing in Massachusetts remains incredibly expensive. Let's take a closer look at the current housing markets in five of Massachusetts' largest cities.
Boston, Massachusetts
Image source: Sanaulac.vn
As expected, Boston's real estate market represents one of the top housing markets in Massachusetts. In the last month, the median listing price was $824,300, and the median selling price was $775,000, up 5.5% year over year. Homes in the city spent an average of 58 days on the market, according to Realtor.com.
Worcester, Massachusetts
Image source: Sanaulac.vn
About forty miles outside of Boston and fifty miles from Springfield, Worcester is Massachusetts' second-largest city. The median list price in April was $349,000, while the median sales price was $380,000. Homes listed for sale typically head into escrow after an average of 49 days on the market.
Springfield, Massachusetts
Image source: Sanaulac.vn
Located an hour and a half drive southeast of Boston, Springfield saw a 12% year-over-year increase in the median listing price last month. The city's median listing price was $245,000, while the sales price was $255,000. Homes tend to sell after 57 days on the market.
Cambridge, Massachusetts
Image source: Sanaulac.vn
Cambridge, a major suburb of Boston, has experienced a significant increase in median list prices over the last year. According to Realtor.com, the median listing home price in Cambridge was $1 million in April, trending up 18.8% year over year. Homes in Cambridge typically sell within an average of 45 days.
Lowell, Massachusetts
Image source: Sanaulac.vn
Another suburb of Boston, Lowell, has more affordable property values compared to Cambridge. In April 2022, the median listing price was $399,900, while the median sales price was $430,000. Listing prices have remained relatively flat year over year. Homes in Lowell spend an average of 50 days on the market.
Among Massachusetts' five most populous cities, only Boston saw the median single-family home sell for the asking price in April 2022. In the other four areas, homes tended to sell between 3% and 6% above the asking price. Worcester, Springfield, Cambridge, and Lowell saw homes sold for an average of 5.58%, 3.2%, 4.09%, and 4.68% over the asking price, respectively.
Fastest Growing Cities in Massachusetts
Image source: Sanaulac.vn
While population growth in the United States has been declining, several cities in Massachusetts have experienced significant increases in population over the last decade. These cities are also home to some of Massachusetts' hottest real estate markets. According to the Urban Land Institute, Boston ranks tenth on the list of real estate markets poised for the greatest growth in 2022. Only two counties in Massachusetts saw a decline in residents between the 2010 and 2020 censuses.
Greater Boston Area
Image source: Sanaulac.vn
The Greater Boston Area, with its diverse job market and renowned universities, has experienced faster-than-average population growth between 2010 and 2020. According to Patch.com, the Boston-Cambridge-Newton metro area grew by 7.2% during this period, reaching a population of 4,878,211 residents. Revere, a suburb of Boston, experienced even faster population growth, with an increase of 20.2% and a total of 62,186 residents, as reported by Secretary of the Commonwealth William F. Galvi.
Cape Cod
Image source: Sanaulac.vn
Towns along and around Cape Cod have also seen significant population growth. Aquinnah, Nantucket, Chilmark, and West Tisbury experienced population increases of 29.7% to 41.2%. The Cape Cod region has shown the most dramatic population increase, while western parts of the state experienced population declines, as reported by The Boston Globe.
Worcester
Image source: Sanaulac.vn
As Massachusetts' second-largest city, Worcester has also experienced significant population growth. Between 2010 and 2020, Worcester's population increased by 14%, surpassing the 200,000 mark for the first time, as noted by Commonwealth Magazine. Worcester has its own vibrant economy, attracting commuters from Boston and offering a more affordable housing market compared to the metro area.
Real Estate Markets With the Most Momentum in Massachusetts
Image source: Sanaulac.vn
The "hotness" of a real estate market depends on several factors, including demand from investors, existing inventory, growth rate of closed sales, and growth rate of selling prices. Considering these factors, here are the hottest real estate markets in Massachusetts.
Counties with the Highest Median Sale Prices in 2022
Image source: Sanaulac.vn
Nantucket County and Dukes County have both experienced major increases in population over the last decade. However, the housing supply has not been able to keep up with demand, resulting in record-high sale prices and low sale volume. In April 2022, Nantucket County reported a median sale price of $1.627 million, down from the previous year's peak of $2.025 million. Dukes County, home to Martha's Vineyard, closely followed with a median sale price of $1.325 million, up almost 33% from the previous year.
Areas with the Fastest Growing Sales Prices
Image source: Sanaulac.vn
According to Redfin, Massachusetts home prices were up 10.0% year over year in April, while the number of homes for sale fell by 14.3%. Over 70% of homes sold in April 2022 sold over the list price. Some neighborhoods have experienced even greater increases in median sale price. Canton, Natick, Andover, Cambridge, and Billerica are among the top ten metros with the fastest-growing sales price. Canton saw a 44.5% increase, Natick 43.8%, and Andover 39.3%. Cambridge and Billerica saw price increases of around 36% year over year.
Worcester's real estate market is also a winner, as noted by Gene Lavanchy in an article for Boston 25 News. Worcester is one of the country's top ten hottest markets for 2022, with a median home price increase of 19.1% compared to the previous year. Homes in Worcester sell within an average of sixteen days and have one of the most competitive housing markets in Massachusetts.
Cities with the Greatest Sales Growth
Image source: Sanaulac.vn
The Providence-Warwick, RI-MA area, the Greater Boston area, and the Worcester, MA-CT area are poised for substantial sales growth this year. According to projections from Realtor.com chief economist Danielle Hale, the Providence-Warwick area is expected to experience 8.1% sales growth and 9.5% price growth, resulting in a combined growth rate of 17.7%. Worcester is projected to see an 8.4% sales growth and 8.2% price growth, resulting in a combined growth rate of 16.6%.
Neighborhoods Where Homes Spent the Least Time on the Market
Image source: Sanaulac.vn
Peabody and Milford are among the neighborhoods where homes spent the least time on the market. Homes listed for sale in Peabody spent a median of three days on the market, while homes in Milford spent only six days on the market. Both areas saw significant year-over-year increases in views per property, with Peabody up 85% and Milford up 264%.
Popular But Relatively Affordable Housing Markets Outside Boston Proper
Image source: Sanaulac.vn
While Boston remains an expensive city, more affordable housing markets like Worcester, Springfield, Manchester-Nashua, and Concord are booming. According to Realtor.com, Worcester ranks eighth and Springfield fourteenth on the list of March 2022's hottest housing markets. Both cities offer shorter commutes and relative affordability compared to nearby Boston.
Worcester's housing market has been on an upward trend for some time, with a median sale price of approximately $400,000 in contrast to the metro area's median home price of $755,000. Worcester's strong economy and affordability have contributed to its competitiveness throughout 2022.
The Hottest Luxury Markets in Massachusetts
Image source: Sanaulac.vn
Massachusetts also boasts booming luxury markets, especially in coastal communities along Cape Cod and Boston's sought-after suburbs. Barnstable, Orleans, Chatham, Lexington, Westwood, Waltham, Canton, and Hanover are among the hottest luxury markets. Barnstable, in particular, has become a highly attractive destination due to its picturesque villages, scenic lighthouses, and beautiful beaches. It currently ranks sixth on the list of the nation's hottest luxury markets, according to Boston.com.
Chatham and Orleans have experienced increases in single-family home prices. Westwood, Lexington, and Waltham have seen median sale prices reach record highs. Brookline, Canton, and Hanover are witnessing significant development of high-end rental and owner-occupied properties, including apartments, condos, and townhouses.
Commercial Real Estate Investment
Image source: Sanaulac.vn
Commercial real estate investment in Massachusetts, particularly in the Boston market, is on the rise. According to commercial real estate agency Crexi, Boston ranks sixth on the list of top office markets in 2022, making it an attractive destination for investors. The state is also becoming a hub for data centers, an emerging asset class expected to experience significant growth in the next decade.
Resources for Prospective Home Buyers in Massachusetts
Image source: Sanaulac.vn
If you're planning to buy a home in Greater Boston, there are resources available to guide you through the process. Check out our posts on "Steps to Buying a House for First-Time Buyers" and "Nine Top Tips for First-Time Home Buyers." These articles cover everything you need to know about saving for a down payment, closing costs, shopping for home loans, and working with a realtor. If you have any further questions, reach out to the team at Torii. Our experienced real estate agents and industry experts are ready to help you navigate the unique housing market in Massachusetts.
In conclusion, Massachusetts offers a vibrant and growing real estate market, with both luxury and affordable options. Whether you're looking to invest in commercial properties, buy a home in one of the fastest-growing cities, or explore the luxury markets along the coast, Massachusetts has something to offer. However, with high demand and limited inventory, it's essential to stay informed and work with experienced professionals to make the most of the opportunities available in this booming housing market.
