commercial real estate – Realtor.com Economic Research
Amazon’s recent announcement that it will create 3,000 new jobs in Boston continues the trend of technology and other companies to diversify their geographic footprint. The move is a confirmation that in today’s environment, companies see a need to change recruiting practices to attract top talent. It also signals that tech employment is expanding well beyond the West Coast roots, as evidenced by similar expansions in Austin, Northern Virginia and Nashville. With remote working changing the residential landscape in 2020, companies are also realizing that a decentralized workforce can work effectively and profitably.
The move signals an additional boost for the Boston real estate markets. including commercial real estate and apartment rents, The seaport district has experienced a dazzling renaissance over the past ten years. However, the pandemic and the remote working shift have put the vacancies in double digits. The new employees will be good news for the office space as Amazon employees will be housed in a new office tower that complements the space rented in another office building that will house an additional 2,000 employees.
Based on realtor.com realtor.com real estate data, Boston Housing led the recovery from the COVID quarantine, showing faster demand and price recovery than most other markets. In the week of January 16, 2021, Boston was in the top real estate markets along with Portland, Las Vegas, Denver and Los Angeles and showed the greatest recovery, driven by a pickup in buyer demand and an increase in seller activity the previous week. During the week, the Boston Housing Recovery Index hit 115.2, outperforming the national index of 103.4.
Boston MSA Housing Recovery Index (Week of Jan 16, 2021)
Boston’s diversified and dynamic economy ensures that the property market remains strong. With a large number of top universities, the metro sector also benefits from a steady influx of top talent in a variety of sectors, leading to a steady increase in the demand for housing. Residents drive the shopping traffic and make up 67.8 percent of the views on realtor.com.
With a very short supply of houses for sale, however, the greatest challenge for the metropolitan region remains affordability. Property prices in the Boston metropolitan area were 14.4 percent higher for the week of January 16, 2021 than a year ago. The affordability challenge is pushing many shoppers away from the central core towards suburbs and more affordable cities in the area and even into states. If you look at where Bostonians look for homes on realtor.com, 37.9 percent of views are directed to other states. The list of top travel destinations for home buyers in Boston reflects a strong preference for locations in the northeast with lower cost of living.
Boston MSA Shoppers Top Metros (Q3 2020):
- Providence-Warwick, RI-MA
- Worcester, MA-CT
- Portland-South Portland, ME
- Barnstable Town, MA
- Manchester-Nashua, NH
- Claremont Lebanon, NH-VT
- Miami – Fort Lauderdale – West Palm Beach, FL
- New York – Newark – Jersey City, NY – NJ – PA
- Concord, NH
- Laconia, NH
The broader New England region has seen the move away from the greater Boston area after the 2020 COVID pandemic. Smaller towns and ski resorts in Vermont, New Hampshire and Maine saw an influx of shoppers in many cases over the past year, reviving previously stagnant markets.
With new home construction still catching up with population growth, we expect the demand for housing in more affordable suburbs to continue to grow in 2021, especially in markets like Melrose and Worcester, which were on the top 10 postcodes in 2020. Additionally, we expect remote working to remain an essential part of the employment landscape in 2021 and beyond as companies develop hybrid models that combine office days with working from home as a recruiting and retention advantage.