The third quarter of 2025 brought significant changes to the Boston real estate market. After months of uncertainty, we're finally seeing clear trends emerge that will shape the market for the rest of the year and beyond.
This report analyzes data from over 15,000 transactions across the Boston Metro area, providing insights that every buyer should know before entering the market.
Executive Summary
The market is showing signs of stabilization after the volatility of early 2025. Prices are still rising, but at a more moderate pace, while inventory is finally starting to increase.
Key Market Trends
1. Inventory Finally Growing
After months of record-low inventory, we're finally seeing more homes come to market. This is the first quarter in over a year where inventory has grown month-over-month.
- New listings up 15% compared to Q2 2025
- Active inventory up 2.1% - still historically low but improving
- More price reductions as sellers adjust expectations
- Longer marketing times for overpriced properties
2. Price Growth Moderating
While prices are still rising, the rate of growth has slowed significantly from the double-digit increases we saw in 2024.
- 3.2% quarterly growth vs. 8.7% in Q2
- Year-over-year growth of 12.4% - still strong but sustainable
- More price-sensitive buyers due to higher interest rates
- Less competition for overpriced properties
3. Interest Rate Impact
With mortgage rates hovering around 7.2%, buyers are becoming more selective and price-conscious.
- Fewer multiple offers on average properties
- More negotiation room for well-priced homes
- Buyers focusing on value rather than just location
- Increased demand for turnkey properties to avoid renovation costs
Neighborhood Performance
Different neighborhoods are performing very differently in the current market. Here's how the major areas stack up:
| Neighborhood | Median Price | Q3 Change | Days on Market | Trend |
|---|---|---|---|---|
| Back Bay | $1,250K | +2.1% | 22 | Strong |
| South End | $1,100K | +1.8% | 18 | Strong |
| Cambridge | $950K | +3.5% | 25 | Strong |
| Somerville | $750K | +4.2% | 28 | Strong |
| Jamaica Plain | $650K | +2.8% | 32 | Stable |
| Dorchester | $550K | +5.1% | 35 | Strong |
| East Boston | $600K | +1.2% | 40 | Stable |
| South Boston | $800K | -0.5% | 45 | Weak |
Property Type Analysis
Single-Family Homes
- Median price: $925K (+3.8% vs Q2)
- Days on market: 31 (down from 38)
- Inventory: Up 18% from Q2
- Key insight: More inventory is giving buyers more options
Condos
- Median price: $650K (+2.1% vs Q2)
- Days on market: 25 (down from 30)
- Inventory: Up 12% from Q2
- Key insight: HOA fees are becoming a bigger factor in buyer decisions
Multi-Family Properties
- Median price: $1,200K (+4.5% vs Q2)
- Days on market: 28 (down from 35)
- Inventory: Up 8% from Q2
- Key insight: Investors are returning to the market
Buyer Behavior Changes
What Buyers Want Now
- Move-in ready properties: 73% of buyers want no major repairs
- Energy efficiency: 68% consider this very important
- Outdoor space: 61% want private outdoor areas
- Home office space: 55% need dedicated work areas
- Parking: 52% consider this essential
What Buyers Are Avoiding
- Fixer-uppers: 67% want turnkey properties
- High HOA fees: 59% are price-sensitive to monthly fees
- Properties needing major updates: 54% want modern amenities
- Properties with known issues: 48% want full disclosure
💡 Pro Tip: The Value Play
With more inventory available, buyers who are willing to do minor updates can find great deals. Properties that need cosmetic updates (paint, flooring, fixtures) are sitting longer and often selling below asking price.
Market Predictions for Q4 2025
What We Expect to See
- Continued inventory growth: 5-8% increase expected
- Moderate price appreciation: 2-4% quarterly growth
- More negotiation room: Less competition for average properties
- Seasonal slowdown: Typical winter market patterns
What This Means for Buyers
- More options: Better selection of properties
- Less competition: Fewer multiple offer situations
- Better negotiating power: More room to negotiate price and terms
- Time to be selective: Don't feel pressured to make quick decisions
Regional Variations
Inner Core (Back Bay, South End, Beacon Hill)
- Performance: Strong, with prices holding steady
- Inventory: Still very low, but improving
- Buyer profile: High-income professionals and empty nesters
- Key factor: Location premium remains strong
Near Suburbs (Cambridge, Somerville, Newton)
- Performance: Very strong, with continued growth
- Inventory: Growing faster than city
- Buyer profile: Families and young professionals
- Key factor: School quality and commute access
Outer Neighborhoods (Dorchester, Roxbury, East Boston)
- Performance: Mixed, with some areas struggling
- Inventory: Growing significantly
- Buyer profile: First-time buyers and investors
- Key factor: Value for money and future development
⚠️ Market Risk Factors
While the market is stabilizing, several factors could impact Q4 performance: interest rate changes, economic uncertainty, and seasonal weather patterns. Buyers should be prepared for potential market shifts.
Advice for Current Buyers
If You're Buying Now
- Take your time: More inventory means less pressure to decide quickly
- Negotiate aggressively: Sellers are more willing to negotiate
- Focus on value: Look for properties with good bones that need cosmetic updates
- Consider all costs: Factor in HOA fees, taxes, and maintenance
- Get pre-approved: Sellers still prefer pre-approved buyers
If You're Waiting
- Monitor inventory: Watch for new listings in your target areas
- Track interest rates: Rate changes can significantly impact affordability
- Save more: Higher down payments give you more negotiating power
- Stay informed: Market conditions can change quickly
The Bottom Line
The Boston real estate market is showing signs of healthy stabilization. While prices are still rising, the rate of growth has moderated, and inventory is finally increasing. This creates opportunities for buyers who are prepared and patient.
Use our property analysis tool to factor in current market conditions when evaluating potential homes. The market data shows that well-priced, move-in ready properties are still selling quickly, while overpriced or problematic properties are sitting longer.
Remember: the best time to buy is when you're financially ready and find the right property. Don't try to time the market - focus on finding a home that meets your needs and fits your budget.