Forecasting the future of our local Cambridge real estate market in 2024. What's a home worth today?
As we kick off a new year and 2024, let’s take a look at today’s market and how the real estate market behaved in 2023.
From a broad standpoint, the main events that shaped the market in 2023 were the same as the year before. Mortgage interests went further up, and home prices remained stable.
The Fed kept on raising mortgage rates by a quarter of a percentage point, also called 25 basis points at each of their 2023 meetings to tame inflation. Rates peaked at 8% by the end of October 2023, causing an affordability issue to all buyers, and it was particularly hard to first-time buyers.
With rates hovering at about 5% the first semester, the real estate market showed resilience with buyers actively competing. And as we entered the Summer, the market softened.
According to NAR’s Third Quarter home price report, the monthly mortgage payment on a typical existing single-family home with a 20% down payment was $2,192, up 19.2%—or $354—from one year ago. Families typically spent 26.8% of their income on mortgage payments, up from 23.5% one year ago.
With high interest rates, the affordability level was at its lowest for many years. Consequently, sales were down as buyers decided to hold off and stay in their homes.
The Cambridge Real Estate Market
Cambridge sales were overall down 25% in 2023 from 807 units sold in 2022 to 644 units sold in 2023, which is the lowest volume of Cambridge sales experienced over the past 20 years. The multifamily sales dropped even 40% with only 64 buildings brokered. The average sale price has been stable at $1,420,000. However, the single-family market shows the strongest price increase of 8% - now $2,661,000 - and a median price also up 6% at $2,000,000.
The median price for condos increased to $920,000 and average price is $1,116,000, number boosted by high single-family prices.
The most expensive home sold in October at 88 Garden Street in Cambridge MA for $10,200,000. An iconic property, the “historic Asa Gray house" showcasing meticulous preservation work and state of the art interior design, carpentry & modern amenities for a luxury lifestyle.
The most expensive Cambridge condominium sold in 2023 was located at 975 Memorial Drive and overlooks the JFK Park and the Charles River through a wall of floor-to-ceiling windows. This exquisitely sublime residence at the Charles with direct-access elevator reported a sale at $7,650,000.
Note that the Cambridge real estate residential taxes are extremely low compared to the surrounding markets whose tax rates are in the $10s’/000. The 2024 fiscal year residential tax rate will be $5.92 per thousand dollars of value.
Curious to know which properties sold in 2023? Click here to view.
The Somerville Real Estate Market
The sales were overall down 20% in volume, but the average sale price remained similar to the level of 2022. The average sale price in Somerville MA is $1,050,000. The multi-family market which is usually very strong in Somerville MA has softened. We sold 28% less multi-family buildings in 2023 than the year before for an average price at $1,300,000. Investors have hold off purchasing investment properties.
The most expensive Somerville single family home to sell in 2023 was a single family located between Davis and Powder House Square at 18 Summit Street. This 3000 sf Gut rehab Victorian house with 4 bedrooms and 3.5 bathrooms, 2 car garages, has innovation and thoughtful touches throughout. It closed at $3,250,000 and is the first home to exceed $3M in Somerville ever.
The Arlington Real Estate Market
The average sale price in Arlington is $1,050,000, similar to the sale prices in Somerville, without consideration of the type of properties. Single family homes in Arlington average $1,227,000, similar to the prices obtained in Somerville. However, Arlington condominiums are slightly more affordable with an average price tag at $849,000 (vs. $939,000 in Somerville).
The most expensive houses sold in Arlington was located at 46 Beverly Road which sold at $2,850,000 for a 4631 sf. new construction ($615/sf).
The Belmont Real Estate Market
The strongest drop in sales was in Belmont with a total of 194 places sold in 2023, so a 34% drop in properties sold from the year before. Condominiums are slightly up in prices, but single-family homes and multi-family buildings have remained stable price wise.
The most expensive Belmont house to sell in 2023 was located on a serene 1.76 acre on Belmont Hills at 275 Somerset Street. This spectacular 6441 sf modern masterpiece with the finest materials closed at $6,750,000.
How to Sell and Buy in Such a Market with a low affordability level?
If you are considering listing and selling your home in 2024, there's a lot of pent-up buyer demand as the housing inventory got even tighter in 2023. The lack of inventory in markets from coast to coast has continued to drive up prices. And "As soon as interest rates start getting into the fives, things are really going to start to move. There are a lot of buyers out there who are going to start to engage.” believes Victor Ciardelli, president and CEO of Guaranteed Rate.
Pricing a home is tricky in such a market and yet critical for the success of your sale. More than ever hiring a real estate agent with a pulse into the local market is your best bet to avoid the pitfall of over-pricing, sitting long and selling below possible and expectations. While residential sales are down, prices have relatively been stable due to an extremely low inventory.
If you are considering purchasing a new home, after more than a year of regular rates increases, the Federal Reserve announced Dec. 13 that a pause in interest rate increases would continue and that a series of rate cuts is likely in 2024. That’s great news for homebuyers who have watched inventory shrink in markets across the country. After hitting a high of 7.79% in August 2023, rates fell to 6.95% the week of Dec. 14, marking their first positioning below 7% since August 2022. That's great news! Our team is ready to assist you with finding your dream home and negotiating the price and terms for the purchase. Trust a local expert with the understanding of the market conditions as this will certainly impact your negotiation power.
Who to call for your real estate needs in Cambridge Mass and beyond?
Cambridge-based and RE/MAX-affiliated Real Estate producer, Sandrine Deschaux + co, brokered over $42M of real estate in 2023. The team ranked #6 Selling Agent in closed sales in Cambridge Mass (sales volume of $31M, MLS, 2023). Consult Sandrine anytime you are about to make a real estate move at 857 204 9872. She will be more than happy to walk you through this new reality, set expectations and help you. You can read her clients' reviews and appreciation notes.
You can start by browsing the homes currently available on the market and connect with Sandrine for an informative call for your future sale or home purchase! If you wish to know what's your home worth today, email [email protected] and our team will be happy to provide you with a free comparative market analysis.
