Although the current high mortgage rate environment has proven discouraging for both buyers, who are facing much higher monthly payments, and sellers, who are not eager to leave their current low interest rate mortgage, the overall residential real estate market in Jamaica Plain remains strong, according to local realtors.
“These rates are not the highest that we have seen over the years,“ said Constance Cervone of Cervone, Deegan + Associates. “However, during Covid, interest rates were way down,“ she added.
Andrew Maxfield of Maxfield and Company Real Estate added. “Many buyers who were pre-approved for say, a $700,000 mortgage when rates were low, now are finding that with higher rates, that pre-approval number could be at $500,000 or $600,000.”
However, even with the higher mortgage rates, the market is proving resilient and anything but slow, according to Paula Callaghan of Insight Realty. “There were two properties that came on the market last weekend and we have offers on both, “ she added.
Callaghan noted that the fall market is psychologically different going from September into Thanksgiving, when prospective buyers are seeing yards that are getting ready for winter hibernation, as opposed to the spring and summer months when landscaping is bursting with colors and plantings.
Ellen Grubert of Ellen + Janis Team at Compass noted that the low inventory has made Jamaica Plain real estate more stable than some neighborhoods. “We had a new listing over the weekend and received five offers, with the property now under agreement,” Grubert said. “One reason for the low inventory is that people are not ready to make the move to sell their current home if the mortgage rates that they are now paying are in many cases at the two or three percent mark,” she said.
“Inventory is down across the Board,” said BJ Ray of the Boston Home Team of Unlimited Southeby’s International Realty. “Specifically in JP, single-family listings and sales are down about 20% from last year. The condo inventory drop has been even more dramatic, with a reduction of 30% in the number of properties listed and closed sales. However, the drop in price and value haven’t been so dramatic. Single families are averaging about 10% less than this time last year and condo sale prices are down around 5%. Anecdotally, I can say that open house traffic is a lot quieter. Instead of 25 groups at every listing, it can often be under 10 groups.
“But of the folks who are still out there looking, they appear to be of a more serious caliber in terms of their resolve to buy,” he added.
When asked about the effect of the looming large-scale developments in JP, Cervone said, “They are not going to affect us.” She pointed out that many units in these developments will be rentals. Ray noted that “with the population growing, it will take years to eliminate the tight inventory market.”
As for the commercial real estate market, Maxfield noted, “With vacancies up, commercial real estate is struggling.” He also pointed out that some office space can only be used for certain types of business uses, such as medical. Cervone said that there are conversations about converting Class B zoning buildings into residential units. She noted that in her building on Boylston Street, there are three vacancies, which has never happened before.
However, despite the head-winds of higher interest rates and a slowing commercial market, “Overall, the JP residential market is still strong and pretty safe,” summed up Maxfield, adding that public transportation, restaurants, the feel of the neighborhood, and proximity to Longwood keep JP a neighborhood where people want to live and raise a family.