Home to Boston and Cape Cod, Massachusetts boasts some of the highest rental rates and home values in the nation. Certain cities, towns and neighborhoods in the Bay State have experienced significant population growth over the last ten years – benefitting from both international immigration and internal migration. Commercial real estate investing – particularly in emerging asset classes like data centers and existing classes like office space – is also on the rise in Massachusetts. In this post, we identify Massachusetts’ fastest growing real estate markets in 2022. From luxury markets like those of Barnstable, Wellesley and Concord to more affordable hot spots like Worcester and Springfield, follow below to learn all about the booming Massachusetts housing market.
2022 Massachusetts Housing Market Stats
Massachusetts’ housing market is booming, with rents and home prices in certain cities surpassing records from last year. Overall, the state’s rental rates and home prices are far above the national average – though that has risen sharply too. In February 2022, the median price of a single family home in the United States was a shocking $408,100. As Mike Winters notes in an article for CNBC’s Make It, this represents an increase of more than $85,000 from January 2020.
The average rent is up too. Average rent is up 11.3% YoY – according to Abha Bhattarai, Chris Alcantara and Andrew Van Dam in their April 2022 article for The Washington Post. According to World Population Review, the average American renter currently pays “$1,326 a month.” However, the average asking rent has risen to $1,900 in the United States. In Massachusetts, both real estate prices and rental rates are far above the US average.
Average Rental Rates
Massachusetts is currently one of the ten states with the highest average rent. The New England state follows Hawaii, DC, California, New Jersey, Florida, New York and Maryland with an average monthly rent of $1,645.00. Of course, some towns and cities in Massachusetts have much higher average monthly rental rates. According to Liz Hughes in an article for Boston Agent Magazine, renting in Cambridge, Boston and Brookline is particularly expensive. Referencing Zumper’s Boston Metro Area Report, Hughes notes that “a typical one-bedroom apartment” goes for $2,580, $2,410 and $2,200 in Cambridge, Boston and Brookline respectively.
Neighborhoods in the Greater Boston Area with the fastest growing rental rates include Lawrence, Cambridge and Melrose. Ake Freudberg elaborates in an April 2022 article for Boston’s local NPR outlet GBH. Freudberg notes that “median rents for one-bedroom apartments in Melrose, Cambridge, Waltham and Framingham are up by at least 30 percent compared to last year.” Average increases in these areas range “from $550 to $650 more each month.” Rents in Brookline and Lawrence have gone up 15% and 18.7% YoY.
Home Values and Sale Prices
Prospective buyers across the state — not just in the Boston real estate market — are still struggling to afford Massachusetts home prices. According to Zillow, “the typical home value of homes in Massachusetts was $577,676″ in April 2022 — almost $170,000 above the national median selling price. Over the last year, the typical value of a single family home in Massachusetts increased by 15.9%.
According to Colin A Young in his March 2022 article “Mass. home prices set more records in April” for nonprofit news organization WBUR, the median single family home price in March 2022 was $560k. Whether $577k or $560k, both home prices have “‘marked a new all-time high for Massachusetts.'” Homes in Nantucket and Martha’s Vineyard had the highest median selling prices in April, though total sales of single family homes actually declined in most counties across the state.
As housing stock increases and mortgage interest rates rise, some real estate industry experts believe prices will start to fall while the number of single family home sales will go up. For now, however, housing is still incredibly expensive. Let’s take a look at the current housing markets in five of Massachusetts’ largest cities.
As one might expect, Boston’s real estate market represents one of the top housing markets in Massachusetts. Last month, the median listing price was $824.3k and the median selling price was $775k — up 5.5% YoY. According to Realtor.com, homes in the city of Boston spent an average 58 days on the market.
In Worcester, Massachusetts — which is about forty miles outside of Boston and fifty miles from Springfield — the median list price was $349k in April while the median sales price was $380k. Homes listed for sale head into escrow after an average 49 days on the market.
An hour and a half drive southeast of Boston, Springfield saw a 12% YoY increase in median listing price last month. The city’s median listing price was $245k while its sales price was $255k. Homes tend to sell after 57 days on the market.
In Cambridge — a major suburb of Boston — the median list price has really shot up over the last year. According to Realtor.com, “the median listing home price in Cambridge, MA was $1M [this April], trending up 18.8% year-over-year.” Cambridge homes sit on the market for an average 45 days before finding a new owner.
While Lowell is another suburb of Boston, property values in this neighborhood are far lower than those in Cambridge. The median listing price was $399.9k in April 2022 while the median sales price was $430k. Buyers considering a real estate investment in Lowell should know that listing prices have remained flat YoY. Here, homes spend an average 50 days on the market.
Of Massachusetts’ five most populous cities, only in Boston did the median single family home sell for the asking price in April 2022. In the other four areas, homes tended to sell between 3 and 6% above asking. Homes sold for an average 5.58%, 3.2%, 4.09% and 4.68% over asking in Worcester, Springfield, Cambridge and Lowell respectively.
Fastest Growing Cities in Massachusetts
Population growth in the United States has been on a steady decline over the last decade. According to a report from the US Census Bureau, “the number of U.S. births has declined every year since 2008 (except for 2014).” The Bureau notes that the number of births fell significantly during the pandemic, even when “accounting for seasonality and the usual decline in annual births.” Between December 2020 and January 2021, the number of births across the US was “unusually low and that is very likely the result of the COVID-19 pandemic.”
Though the COVID-19 pandemic did have some impact on the US birth rate, NPR reporters Melissa Kearney and Shanna Swan note that the decline is “not simply the aftermath of the pandemic-induced reduction.” Rising infertility rates, wages that cannot keep up with the cost of living, concern over the changing climate and fear of global political instability have all contributed.
Not all areas of the US are suffering from stunted population growth, however. A number of cities in Massachusetts experienced lightning fast population growth over the last decade. These include Boston Proper, Revere, Worcester, Aquinnah, Chilmark, Nantucket, Tyringham, West Tisbury, Wellfleet, Edgartown, Provincetown, Hopkinton and Truro. These areas are also home to some of Massachusetts’ hottest real estate markets. In fact, the Urban Land Institute ranked Boston tenth on its list of the real estate markets poised for greatest growth in 2022 — right after Seattle and before Salt Lake City. Only two counties in MA lost residents between the 2010 and 2020 censuses.
Greater Boston Area
With its diverse job market and incredible universities, it should come as no surprise that the Greater Boston Area grew faster than the national average between 2010 and 2020. In his November 2021 article “This Is The Fastest Growing City In Massachusetts” for Patch.com, Grant Suneson writes that “the Boston-Cambridge-Newton metro area…grew by 7.2% from 2010 to 2020 to 4,878,211 residents.” Revere – a suburb of Boston – added to its population more quickly than Boston Proper. According to Secretary of the Commonwealth William F. Galvi – quoted by local news outlet Spectrum News 1 – Revere “grew by 20.2% and now has a total of 62,186 residents.”
Towns along and around Cape Cod experienced some of the most significant boosts in population. Aquinnah’s population increased 41.2%, Nantucket’s increased 40.1%, Chilmakr’s increased 40% and West Tisbury’s increased 29.7%. According to Brittany Bowker in her article “These Massachusetts towns saw the greatest population increases, and the biggest drops, new census data show” for The Boston Globe, the “most dramatic population increase” was around the Cape, while the most dramatic “drop-off…was focused in western parts of the state.”
Massachusetts’ second largest city after Boston, Worcester also made major gains. In her August 2021 article “Massachusetts population shifts toward cities” for Commonwealth Magazine, Shira Schoenberg notes that Worcester “exceeded the 200,000 mark for the first time” between 2010 and 2020. The city’s population increased by 14% during this time – growing from about 185,000 residents to more than 205,000 residents.
Real Estate Markets With the Most Momentum in Massachusetts
How “hot” a real estate market is depends on demand from real estate investors — i.e. home buyers or commercial agencies — and existing inventory of housing units or other properties. One must also weigh the growth rate of closed sales and the growth rate of selling prices in each neighborhood, city or county. We consider all these factors below when determining which markets are the “hottest” for real estate investments in Massachusetts.
MA Counties with the Highest Median Sale Prices in 2022
Massachusetts is made up of fourteen different counties, of which only two experienced a population decline. Nantucket County and Dukes County both experienced major increases in population over the last ten years. The housing supply, however, has not been able to keep up with demand during this time — leading to record highs in sale price but record lows in sale volume.
According to Colin A Young in his March 2022 article “Mass. home prices set more records in April” for nonprofit news organization WBUR, Nantucket County “led the way with an April median sale price of $1.627 million” last month. This is actually lower than the highest median sale price last year in Nantucket, which reached $2.025 million. Dukes County — which is home to Martha’s Vineyard — closely followed Nantucket County’s median sale price. Young writes that “Dukes County last month reported a median sale price of $1.325 million, up almost 33% from $1 million last April.”
Still, sale volume is down in both counties. Sale volume has only increased in Hampshire County and Franklin County. Elsewhere in the state — like in the Boston market — real estate agents report that inventory is still tight.
Areas with the Fastest Growing Sales Prices
According to Redfin, “home prices statewide were up 10.0% year-over-year in April” though the number of homes for sale in Massachusetts fell 14.3% last month. More than 70% of homes that sold in April 2022 sold over the list price, up 8.6 points from last April. Some neighborhoods boast even greater increases in median sale price. In their “Massachusetts Housing Market” report, Redfin identifies Canton, Natick, Andover, Cambridge, Billerica, Pittsfield, Wilmington, Everett, Grafton and Bedford as the “top ten metros with the fastest growing sales price.” In Canton, the median sale price is up 44.5%. Natick’s is up 43.8%, while Andover’s is up 39.3%. Both Cambridge and Billerica — suburbs of Boston — saw price increases around 36% YoY.
Beyond the Boston real estate market, Worcester’s real estate market is another winner. As Gene Lavanchy notes in his article “Worcester real estate market called one of the nation’s 10 hottest” for Boston 25 News, “real estate in Boston’s suburbs and Cape Cod led with the way with quick turnover, spiking prices, and bidding wars…throughout the pandemic.” According to Lavanchy, “Worcester is one of the country’s top ten hottest markets for 2022” because of its relative affordability. The median home price in Worcester is up 19.1% this month when compared to the same time last year. Homes in Worcester sell incredibly fast — within just sixteen days on average. Worcester also has one of the most competitive housing markets in Massachusetts. Redfin awarded Worcester a Redfin Compete Score of 82, which falls just behind Acton and Chelmsford’s scores. We will discuss Worcester’s stats in further detail below.
Cities With the Greatest Sales Growth
Housing markets in Massachusetts expected to have the greatest sales growth this year include the Providence-Warwick, RI-MA area, the Greater Boston area and the Worcester, MA-CT area. Quoting local loan officer Sammy Iliopoulos in a recent article for National Mortgage News, Paul Centopani writes that “‘2022 will still be a very robust market [for Boston].'” According to Iliopoulos, opportunities in high-income and high-prestige industries is drawing wealthy home buyers to the Boston area. He notes that “‘the life sciences are a big proponent to people moving here and the school systems are excellent.'” Plus, there are a few “‘big biotech companies that help create this market for people needing to buy and live here, which is great.'” In general, Iliopoulos notes that “‘there’s just a lot of cash out there for customers that have been holding on to it, waiting for the market to bust…[so] it’s still going to be competitive [in 2022].'”
Providence-Warwick and Worcester are poised for even greater sales growth this year, according to projections from Realtor.com chief economist Danielle Hale. In her December 2021 report “Top Housing Markets for 2022,” Hale writes that Providence-Warwick, RI-MA — in sixth place just below Columbus, Ohio — should experience an 8.1% sales growth YoY and a 9.5% price growth. This results in a 17.7% combined sales and price growth. Worcester, MA-CT — which was ranked ninth — has a projected 8.4% sales growth and an 8.2% price growth for a combined 16.6% growth rate.
Neighborhoods Where Homes Spent the Least Time on the Market
Another factor that contributes to the “hot market” designation is how quickly homes fly off the market. In Massachusetts, homes spent the least time on the market in Peabody and Milford. Realtor.com’s list of “2021 Hottest Zip Codes” notes that “homes listed for sale last year [in Peabody] spent a median three days on the market.” Homes listed for sale in Milford in 2021 spent only six days on the market.
Both experienced a massive uptick in views per property year over year. Viewers per property in Peabody were up 85% from 2020 and those in Milford were up 264%! For those unfamiliar with the area, Peabody is in Essex County, Massachusetts — about two miles from Salem and fifteen miles from Boston. Milford is in Worcester County, Massachusetts. It is located forty miles from Boston and about thirty miles from the city of Worcester.
Popular But Relatively Affordable Housing Markets Outside Boston Proper
It goes without saying that Boston is an expensive city for renters and homeowners alike. This is why more affordable housing markets like Worcester MA, Springfield MA, Manchester-Nashua NH and Concord NH are booming right now. In her list of March 2022’s hottest housing markets, Realtor.com writer Hannah Jones places Worcester eighth and Springfield fourteenth. Manchester-Nashua NH and Concord NH also rank towards the top. All four housing markets are gaining steam because of their “short commutes and relative affordability compared to nearby Boston.”
While the median home price in Boston’s metro area reached $755,000 this March, Worcester’s median sale price was just around $400k at last count. Worcester’s housing market has been on an upward trend for quite some time. In a December 2021 article for MassLive.com, Cassie McGrath forecasted that Worcester would be incredibly competitive throughout 2022. McGrath notes that while Worcester functions as a bedroom community for Boston commuters, “Worcester has its own vibrant economy.”
The Hottest Luxury Markets in Massachusetts
Cities and townships across Massachusetts are leading lists of 2022’s hottest housing markets because they offer affordable alternatives to major metros like Boston, New York and San Francisco while providing economic opportunities close to home. However, the luxury market is also booming in Massachusetts. It draws affluent buyers from near and far — especially to coastal communities like those along the Cape and in Boston’s most sought-after suburbs. Some of the hottest luxury markets in Massachusetts include Barnstable, Orleans, Chatham, Lexington, Westwood, Waltham, Canton and Hanover.
Kelly Garrity points to Barnstable, Cape Cod in a recent article for Boston.com. Garrity writes that “‘The combination of picturesque villages, scenic lighthouses, and lobster rolls — plus all those white-sand beaches — made the hook-shaped peninsula [of Barnstable] a particularly attractive destination during the pandemic.'” Today, Barnstable has the nation’s “sixth-hottest luxury market.”
Beyond Barnstable, single family home prices are up in Chatham and Orleans. The median single-family home price in Chatham was $1.25 million at last count. Median sale prices broke records in Boston suburbs of Westwood, Lexington and Waltham too.
Luxury markets in Massachusetts are not limited to single family homes, of course. Development of high-end apartment buildings, condos and townhouses — both rental properties and owner-occupied properties — is exploding in Brookline, Canton and Hanover. According to Erin Kayata in her article “Top Places to Live 2022: Key to the Kingdom” for Boston Magazine, real estate agents say there has been “a mad dash to Brookline” and other areas with lots of new development.
Commercial Real Estate Investment
This brings us to commercial real estate investments in Massachusetts. Boston currently ranks tenth on a list of the top US markets for commercial real estate investment in 2022 according to commercial real estate agency Crexi. Though neither the Boston metropolitan area nor any other Massachusetts city ranked in the top industrial, multifamily rental property or retail markets, Boston did rank on a list of the top office markets in 2022. It landed in sixth place between Miami, Florida and Austin, Texas. Outside the Boston real estate market, Massachusetts is also becoming a hub for data centers – an emerging commercial real estate asset class poised for massive growth over the next decade.
Resources for Prospective Home Buyers in Massachusetts
Are you hoping to buy a home in Greater Boston this year? Check out our posts “Steps to Buying a House for First-Time Buyers” and “Nine Top Tips for First-Time Home Buyers.” Learn all you need to know about the home buying process — from how much should save for a down payment and closing costs to shopping around for home loans and working with a Realtor.
Have questions these posts didn’t answer? Reach out to the team at Torii. Our real estate agents and other industry experts would be happy to discuss your unique situation.