Eastern Massachusetts appears headed toward another housing boom that could turn out bigger than the last one as frenzied real estate activity near Boston begins to spread to outer suburbs and beyond, economists and housing specialists say.
The projection is based on trends in communities that historically have led the region’s housing market, particularly Cambridge. The red hot market there has already pushed the median price 30 percent above the pre-recession peak and housing specialists say it’s only a matter of time before other cities and towns follow.
“Traditionally, Cambridge and other areas in or near Boston are first to explode in housing prices, then it spreads to Route 128 and eventually even further out,” said Mark Hickey, an economist at CoStar Group, a real estate research firm in Boston. “Cambridge is kind of the canary in the coal mine.”
The Cambridge housing market has become so hot over the past 18 months that buyers are paying an average of 4 percent above the asking prices of sellers, according to data compiled by CoStar. By comparison, sale prices in Cambridge never exceeded average asking prices during the last decade’s housing boom — or the housing boom that accompanied the dot-com era of the 1990s, data shows.
Homes for sale in Cambridge now last only about eight days on the market before they’re snapped up by buyers, compared to the norm of 50 to 70 days during the last housing boom, according to CoStar. Even at the very peak of last decade’s housing frenzy, Cambridge homes still took more than a month to sell on average.