If you’re wondering what drives home prices in Boston, the answer comes down to a combination of macro market conditions and hyper-local neighborhood nuances. According to recent data from Altos Research, a few key factors stand out in the city-wide market — and yet each Boston neighborhood behaves like its own “micro-market,” so local specifics matter just as much.

Key City-Wide Drivers

From the Altos report for Boston, MA on November 18, 2025:

• Today, the median list price for a condo in the city is $1,022,500, and price per square foot is about $1,014. (Altos Research)

• The Market Action Index – which measures the balance of supply and demand – currently hovers around 32, indicating a slight seller’s advantage, but not the frenzy of earlier years. (Altos Research)

• Inventory is low in many Boston ZIP codes, which means scarcity of well-priced, well-located homes continues to support price levels.

From this we can see three broad factors: supply levels, demand intensity, and size/condition of homes (which drives the high $/sq ft).

Why Your Neighborhood Matters

While the city-wide numbers provide a useful orientation, what really determines value in your neighborhood is the local combination of those factors plus location-specific elements. For example:

• A Boston South End condo currently has a median list price of about $1,295,000, with price per square foot around $1,172, and an average days on market of 98. (Altos Research)

• That same ZIP has higher inventory than this time last year, which contributes to only a slight seller advantage with a Market Action Index 31. (Altos Research)

So what does that teach us? In the South End neighborhood, homes tend to move a little slower (higher days on market), pricing is a bit higher $/sq ft than the city average, and there is adequate inventory. If you were looking at a different neighborhood — say in Back Bay, Beacon Hill, or a more affordable outer-ring area — the $/sq ft, inventory, buyer profile and thus pricing dynamics would differ significantly. It is also important to note that data is always changing, and data reviewed today will be different in one week, one month, and one year. 

What to Watch & How It Impacts You

Condition, size, and upgrades: A 3-bed in a modest state vs a newly renovated 4-bed will fetch very different multiples of $/sq ft.

• Inventory and days on market: In a neighborhood where homes sit for 70+ days, sellers may need to price more aggressively. In contrast, low-inventory zones sustain stronger pricing.

• Neighborhood amenities, school zones, transit access: These still matter heavily in Boston micro-markets — close proximity or access to the T can add premium.

• Macro economic factors and interest rates: These influence buyer demand city-wide; however, how strongly they play out depends on the neighborhood’s affordability and buyer pool.

​​​​​​​​​​​​​​Final Takeaways

Yes — city-wide trends from Altos Research give us a strong backbone. But when you ask “What is my neighborhood worth and what drives that value?” the answer lies in the intersection of broad supply-demand conditions and your neighborhood’s specific story. As a licensed real estate agent and market expert in the Boston area, I can provide you with a tailored, data-driven home value report that captures all of those factors.