Real Estate Investment in Massachusetts

Why Invest in Massachusetts Real Estate?

Massachusetts is the most populous state in New England, and the third most densely populated state in the US. Over 80% of Massachusetts residents live on the Greater Boston Area, which has played an influential role in American culture, commerce and law since the country was founded back in 1776.

The state is home to some of the most talented life science and manufacturing experts in the world, and has a thriving research atmosphere. This unmatched talent pool has attracted world-renowned venture capital firms, biotechnology companies and pharmaceutical corporations, and subsequently created tens of thousands of high-paying jobs. This surge in jobs has caused the real estate market to heat up considerably, since supply is at record lows and demand is increasingly competitive.

Investment Considerations for Massachusetts Real Estate

There are a number of factors to consider, including:

  • Rising Home Values - The median home value in Massachusetts is substantially higher than the national average. Home values in the state have increased by 7.0% in the past year and are expected to rise by 7.7% over the course of the next 12 months. Median rent prices are also higher than the national average due to limited supply.
  • High Foreclosure Rates - 7.1% of Massachusetts’ homeowners are currently underwater on their mortgages, which is substantially higher than the national average. Foreclosed properties present tremendous opportunities for real estate investors to purchase homes at prices below fair market value. People who lose their homes to foreclosures will also be in need of rental housing, which will continue to keep the rental market stable.
  • High Property Taxes - Massachusetts’ property taxes rank as the 7th highest across the country, and the state’s average effective tax rate is slightly above the national average. High property taxes have made homeownership less appealing to many, including Millennial, which is continuing to push rent prices higher and higher.
  • Long Commute Times - In Boston, where a large percentage of the state’s population resides, the average commute time is three times higher than the national average. This has increased the demand for homes near core commercial areas as residents look for ways to reduce their commute times, which is skyrocketing appreciation.
  • Only a slight difference between owning and renting - 66% of the state’s population is homeowners. Since the monthly cost of renting and owning a home is only slightly different in most areas, many people opt for homeownership versus renting.

What are the Best Markets to Invest in Massachusetts

Boston is the most coveted place in Massachusetts, and home values are substantially higher than the national average. In the past year, home values have risen by 6.3%, and they are expected to rise by 9.0% within the next year. The city’s median rent price is higher than the national average and home foreclosure rate is three times higher than the national average.

Cambridge is less than 5 miles away from Boston and home to Harvard University and the Massachusetts Institute of Technology. Home prices are well above the national average, but the presence of Ivy League Schools, great neighborhoods, and tourism make it an area worth exploring.

Brookline and Newton, which are suburbs of Boston, have excellent public schools, low crime, and a variety of different activities for people of all ages.

 

HomeUnion® Investment MapHomeUnion® is the leader in residential real estate investment. With the use of big data and machine learning, we analyze information on millions of single family homes in Massachusetts; and across the United States and calculate home values INVESTimate® for every property in Massachusetts. If you’re looking for the best investment properties across the country, visit our comprehensive investment site.

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