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Market Outlook

The following is an excerpt from our Fall 2014 Open Letter to South End Stakeholders, a report on the state of the South End real estate market and a glimpse into life in our neighborhood. You can download the full report here.



Macro and Micro Trends

Given the current robust real estate market, what can we expect going forward?

While events and policy shifts on the national and international stage do not unfold with the South End in mind, they nevertheless impact our market. Nobody is certain what may be the long-term implications of the Fed's massive infusion of liquidity into the financial system since 2008. Prominent economists have ex- pressed concern over both deflation and hyperinflation. We project that it will be some time before inflation runs significantly ahead of the Fed's 2% target, and anticipate rates to remain relatively low.

This Steven Cohen Team forecast is a bet against the economy overheating as a result of asset bubbles or a sharp acceleration in the labor market. We predict a disinflationary effect due to continued innovation and a boom in domestic energy production. Other wild card macro factors include currency movements, the performance of China and other expanding economies, and potential for the United States to be drawn into further conflict abroad.

On the local level, Boston's strong health care, financial services, education and tech sectors will continue to buoy demand. The inward migration of empty nesters competing with their children, the stroller set, for downtown housing will also persist. (In our view, this conflict is the children's fault! They are supposed to be moving to Sudbury but many aren't having it.)

Plus, local inventory is bound to rebound, as a number of residential developments in Boston move toward completion. It will be interesting to see where price points find their equilibrium.



Find this story and more in our Fall 2014 Open Letter to South End Stakeholders. Read all about the latest real estate trends, forecasts, and an in-depth look at the South End community.

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