Cambridge, MA: where $1.3 million buys you an average home and houses vanish in 13 days.
Whether you’re looking to buy or sell, this isn’t your typical market. Fierce competition meets soaring profits.
But opportunities still lurk for the well-informed.
What’s driving these trends? Which neighborhoods are heating up? We’ll unpack Cambridge’s real estate frenzy.
Key Notes
- Cambridge’s 2024 housing market sees average home prices hit $1.3 million, with properties selling in 13 days.
- The city’s low 5.92% residential tax rate attracts buyers, saving thousands annually compared to nearby areas.
- Emerging neighborhoods like The Port offer growth potential for savvy investors in a competitive market.
- Cambridge’s tech industry and world-class universities drive steady housing demand despite economic uncertainties.
At a Glance
As of 2024, the Cambridge housing market is one of the most competitive in the country.
People consider it a desirable location to live, thanks to its proximity to Boston and its renowned educational institutions like Harvard University and MIT.
But what’s happening in the market right now?
Many homes get multiple offers, some with waived contingencies. The average home sells for about 2% above the list price and goes pending in around 13 days.
Currently, house prices in Cambridge reflect a strong seller’s market with high demand but a limited supply of homes. This imbalance drives up property prices, making it a challenging environment for buyers.
Have a look at these Cambridge housing market stats:
| Statistic | 2023 | 2024 (Projected) |
|---|---|---|
| Average Home Price | $1.2 million | $1.3 million |
| Median Days on Market | 35 days | 30 days |
| Inventory Levels | 300 homes | 280 homes |
| Sales Volume | 800 homes sold | 750 homes sold |
These numbers reflect a:
- Slight increase in property prices
- Decrease in the number of homes available
- Quicker turnover as properties spend less time on the market
- Small decline in sales volume reflecting limited inventory
What’s Driving Cambridge's Real Estate Market?
Cambridge’s real estate market is an intriguing blend of economic vitality, educational prestige, and cultural richness.
These factors have put houses in high demand and steadily increasing property values.
Let’s take a more in-depth look:
Local Economy
Economic indicators are vital signposts that signal the health of the real estate sector.
In Cambridge, the economy is alive and thriving, primarily driven by its robust tech industry and the presence of prestigious educational institutions like Harvard and MIT.
These contribute significantly to the local economy and attract a constant influx of professionals, academics, and students.
This dynamic creates a steady demand for housing as newcomers seek places to live while they work or study. The tech sector, in particular, is a major player, with numerous startups and established companies setting up shop in the area.
Social Landscape
The social landscape of Cambridge further enhances its appeal. Known for its progressive values and cultural diversity, the city attracts residents who want a quality lifestyle alongside economic opportunities.
The vibrant community enjoys a rich tapestry of cultural events, art, and social initiatives that foster inclusivity and engagement.
Low Residential Tax Rates
Cambridge, MA, boasts one of the lowest residential tax rates in the region, significantly influencing its housing market.
For 2024, the residential tax rate is just $5.92 per $1,000 of assessed property value. This is remarkably low compared to neighboring areas like Somerville, where the rate is $10.52 per $1,000.
This low tax rate makes Cambridge particularly attractive to potential homeowners and investors, as it reduces the overall cost of homeownership.
For example, a property in Cambridge valued at $750,000 would incur an annual property tax of only $4,440. In addition, Cambridge offers a residential tax exemption, further reducing the tax burden for qualifying homeowners by up to $2,759.
Why Have Prices Spiralled?
As mentioned, high demand from well-paid professionals, students, and faculty members, combined with a limited supply of available homes, creates a classic supply-and-demand scenario where prices are pushed upward.
What’s more, the city’s strict zoning laws and scarcity of undeveloped land limit new construction. This means that even as demand grows, the supply can’t keep pace, driving prices even higher.
Add to this many historic or architecturally significant properties that contribute to real estate’s high value.
Price Breakdown of Cambridge's Housing Costs
To understand where the market’s going, let’s break down Cambridge house prices by property type:
- Single-family homes consistently command the highest prices, reflecting their desirability and the limited supply. This trend mimics a broader pattern of buyers willing to fork out more for a standalone property offering space and privacy.
- Condos are slightly more affordable but are still snapped up at higher prices. This is because many find the convenience of condo living in urban environments appealing.
- Apartments are the most affordable option in Cambridge but go for elevated prices compared to national averages. The appeal of apartment living often lies in its accessibility to public transportation, local amenities, and the city’s vibrant community atmosphere.
As the market evolves, these dynamics will likely keep property values on an upward trajectory, reinforcing Cambridge’s position as a desirable location for homebuyers.
Here’s a comparative look at 2023 vs 2024 property prices:
| Property Type | Average Price (2023) | Average Price (2024) |
|---|---|---|
| Single-Family Homes | $1.5 million | $1.6 million |
| Condos | $950,000 | $1 million |
| Apartments | $700,000 | $750,000 |
Noteworthy Neighborhoods
Buying a house in Cambridge means considering the various neighborhoods, each with its own character and price points. Here are some worth noting:
- West Cambridge: This neighborhood is graced by beautiful historic homes and lies near Harvard Square. It’s one of the most expensive areas, with average home prices well over $2 million.
- East Cambridge: A bit more affordable, East Cambridge is popular among young professionals and first-time buyers. Prices here are around $900,000 to $1.2 million, depending on the property.
- Cambridgeport: Known for its eclectic vibe and a mix of older homes and newer condos, Cambridgeport offers a slightly more affordable option, with prices ranging from $800,000 to $1.4 million.
Some areas are starting to experience more interest and growth.
These emerging neighborhoods are attractive options for buyers looking to get in early:
- The Port: With new developments and a growing arts scene, it’s becoming a popular choice for younger buyers. Prices are still relatively affordable but are climbing as more people discover the area.
- Kendall Square: Already well-known for its tech companies, Kendall Square is also seeing more residential interest. It’s a great choice for professionals who want to live close to work, and while prices are high, the area’s amenities and convenience make it a worthwhile investment.
So, what’s the average price of housing in Cambridge MA? Here’s what you can expect to pay for an average 2-bedroom house in each of these areas:
| Neighborhood | Average Price (2024) |
|---|---|
| West Cambridge | $2.1 million |
| East Cambridge | $1.1 million |
| Cambridgeport | $1.1 million |
| The Port | $850,000 |
| Kendall Square | $1.5 million |
What’s Next For Cambridge?
Predicting the future of the Cambridge housing market is always tricky, but there are a few trends we can reasonably expect to continue into 2024.
Prices will continue to rise, albeit at a slower pace. This is due to two primary factors – increasing interest rates and economic uncertainty.
Mortgage Rate Hikes
The ongoing increase in interest rates has a major influence on buyers. As mortgage rates rise, borrowing becomes more expensive, which decreases affordability for many prospective homebuyers.
For example, mortgage rates peaked at around 8% in late 2023, causing many, especially first-time buyers, to reconsider their purchasing decisions.
This shift in the financial landscape can lead to a cooling effect on the housing market, as buyers may delay their purchases or opt for less expensive properties.
Financial Uncertainty
Concerns about inflation, job security, and broader economic conditions can make buyers more cautious.
In Cambridge, the strong local economy has historically driven demand; however, if economic growth slows or if there are significant layoffs in key sectors like technology and education, this could dampen buyer enthusiasm and temper the market.
Despite these challenges, the demand for housing in Cambridge remains strong because of its desired location, excellent educational institutions and reputation as an innovation hub.
As a result, we can expect a steady appreciation in home values, making it a good investment for those who can afford to buy.
Best Times to Buy or Sell?
Timing is everything in real estate, and 2024 is no different.
For buyers, the best time to purchase is often late winter or early spring, when fewer people are looking, and sellers may be more motivated. However, be prepared for stiff competition, as inventory is likely to remain low.
For sellers, spring and early summer are traditionally the best times to list a property. With more buyers on the hunt, you’re likely to get multiple offers, which can drive up the final sale price.
Opportunities in Cambridge’s Market
For sellers, 2024 looks like a favorable year.
With high demand and low supply, you’re in a strong position to get bang for your buck. Just be sure to price it appropriately and be ready to move quickly once offers start coming in.
Frequently Asked Questions
Are house prices falling in Cambridge?
As of 2024, house prices in Cambridge are continuing to rise. Although this may be at a slower pace than in previous years, there’s still a strong demand for property with a limited supply.
Why is housing in Cambridge so expensive?
Housing in Cambridge is expensive because of a high demand combined with a limited supply. Add the city’s desirability, presence of top universities, a thriving tech sector, and a high quality of life and you’ve got a recipe for a robust real estate market.
How much is the average home price in Cambridge?
The average home price in Cambridge, MA, is approximately $1.3 million. This varies depending on the type of property and the specific neighborhood you choose.
Cash In On Cambridge
Cambridge’s real estate market in 2024 is a powerhouse of opportunity and challenge.
With average home prices hitting $1.3 million and properties selling in just 13 days, it’s a seller’s paradise. But don’t count buyers out – neighborhoods like The Port offer growth potential for savvy investors.
The city’s low tax rates, thriving economy, and world-class institutions keep demand high. Whether you’re looking to buy or sell, timing and local knowledge are key.
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