Top 10 Markets in Massachusetts that Could See a Price Correction
The Top 10 Markets that Could See a Price Correction
I am on the record saying that I do not believe that the state of Massachusetts as a whole will see a housing crash with severe price corrections. I am also on record saying that I do believe some towns in our market have more potential for a minor price correction than others.
I have been repeatedly asked which towns in Massachusetts are the most likely to see some sort of pricing correction and because I didn’t have any data… I was always reluctant to provide any answers. Well, that changes today! This is a data driven analysis. No back handed feelings helping drive up or down a specific market. And there were towns that I personally deep down feel like should be on this list… But the data says otherwise.
So, what specific data metrics did I look at? The first metric that I wanted to look at were the markets with the largest appreciation gains since 2019. I disqualified any towns that had less then 50 sales as I felt that was not enough sales data with one or two outliers being to easily able to skew the data one way or another. .
It is my belief that the towns that had the largest gains would most likely be the ones that give it back. For example, the #1 town on the list has seen nearly a 59% increase in the average sales price since 2019. That is nearly 15% per year. But the 20th town on the list had a little over a 65% increase in sales prices. So, what gives?
I channeled my investment banking days when I traded mortgages to come up with these calculations and this list. When evaluating risk on a pool of mortgages, we would look at certain obvious characteristics like average down payment percentage, average FICO scores and asset concentration. But another area of very specific importance was second homes and investment property...