Following the housing bubble, construction of new homes declined sharply. The effects of low home inventories were felt in 2012 and will continue throughout 2013. The MLS Property Information Network reports that prospective buyers in Massachusetts had 23% fewer homes to select from compared to this time last year.
In fact, in just Boston alone homes available for sale are down by 45% when compared to this time last year.
What are the effects of low home inventories? Higher prices.
All around Massachusetts, housing markets are low on inventory. The Boston Herald reports that Quincy, Needham, and Peabody are down by 54%, 36%, and 24% respectively.
Jed Kolko cites several reasons for low inventory is the Boston area. First, “Strong job growth during the recovery in and around Boston has boosted housing demand.” Secondly, there has been, “several years of relatively little construction, so few new homes have been added to the housing stock.”
Developments in Boston are reaping the benefits of low supply. Richard Baumert, partner at Millennium Partners, said sales have been going well. Read more about Millennium Place here.
The real estate market surrounding Boston’s North Station is heating up, reports the Boston Herald. Doug Linde of Boston Properties sites changes in the environment and higher prices elsewhere as driving factors for development in the area. Construction on a number of residential and commercial buildings in the area should begin later this year. Demand for office space in Boston is high. Retailers Target and Stop & Shop are considering leasing space near developments.
High demand for space is behind the construction around North Station. Bryan Koop, also from Boston Properties, says that rents in areas like Seaport and the Innovation District have increased, pushing tenants to relocate. In addition, he cites the access to public transportation as an asset to North Station’s location. In 2012, a number of project including The Merano Hotel, were approved for construction. Approved plans include a number of apartments and low cost housing options.