| The Greater Boston housing market is undergoing "a real turnaround," according to an annual report prepared by The Boston Foundation. The Greater Boston Housing Report Card, prepared by Northeastern University’s Dukakis Center for Urban and Regional Policy, projects a further 4 percent increase in single family sales for 2013 following last year’s 20 percent gains, as well as noting a turnaround in condo sales.
Perhaps most importantly, new home construction has recovered, with permits rising to a projected 11,300 for 2013, a 40 percent increase over last year. "If our projection holds, this year’s permit activity will be…the first time since 2006 that the number of housing permits exceeds 10,000, nearly two-and-a-half times the number issued in 2009," the authors write. Multifamily housing in particular has recovered strongly, with over 7,000 units permitted this year in Greater Boston, more than two-thirds of the statewide goal named in Gov. Deval Patrick’s housing plan to be built before 2020.
Median home prices have also recovered, with single family prices up 6.6 percent in the first half of the year, and now appear to be on a "stable upward trajectory," the report noted. But while home prices have recovered, the report warns that a stagnating Bay State economy combined with increasing living costs is rendering housing more unaffordable for most households. More than half of renter households in Greater Boston spend more than 30 percent of their income on rent, while 40 percent of homeowners spend more than 30 percent of their incomes on mortgage payments, property taxes and utilities. Those figures are up from 39 percent and 27 percent, respectively, for renters and homeowners in 2000, the report says.
Beyond an improving economic picture that would help raise incomes, the report suggests that policymakers ought to focus their efforts on increasing the supply of housing, particularly multi-family housing, to help make housing more affordable. While the number of permits issued in 2013 is on track to meet the report’s suggested level of 12,000 new units per year in Greater Boston, many of the programs which help support the creation of more affordable units are under threat from federal budget cuts, the report says.
