BlueTrim Blog: Boston» Blog Archive » Bubble-sitting: waiting out an uncertain market

Bubble-sitting: waiting out an uncertain market

A lot of people (experts, even) think the housing market is overvalued.

This had led to buyers deciding to wait it out, hold off buying a new home until prices fall.

Some of these people have never owned; some of these people are selling their current homes, and becoming renters, at least for the time being.

No one has a crystal ball. People on the sidelines are assuming that prices will go down, but they should also be watching interest rates. The higher the rate, the higher the payment, all other things held constant.

Median condo sales prices have not dropped, at all, in the city of Boston. The volume of sales has dropped, by about 25%, but not the prices, themselves.

Prospective buyers may have a long wait on their hands, if they’re looking for a bargain. It might never happen. As prices drop, interest rates have risen, making buyers’ mortgage loan payments about the same as before.

Meanwhile, they’ll have to deal with rents going up, due to the low vacancy rate.