It’s the fall real estate market and this means that many buyers are out in the Boston neighborhoods looking for a new home.
It looks to be a busy, but short, fall season, based on what I see going under agreement and by the number of inquiries I’ve been getting. It’s hard to make comparisons to prior years, though, since they were unique. Last year, for example, we were still feeling the after-effects of the expiring tax credit program that pushed many people to buy in the spring who may otherwise have waited until fall. So, the fall sales volume was lower than normal. And, in 2009, we were about 12 months into the bottom trough of the recession, following the September 2008 implosion of Lehman Brothers and the beginning of “bad times” for many people.
So, we’re busier this year, but that’s only because things were so slow before.
There may be more buyers, but I don’t see a lot of inventory out there, which will make things difficult for many. Although buyers may have (finally) been able to get their lenders to agree to lend, they are now faced with an unexpected problem: no homes to buy.
Or, at least, no homes at prices they can afford.
Sadly, for many people, prices in the downtown Boston real estate neighborhoods have not fallen by as much as in other parts of the city, state or country.
For example, if you’re looking for a two-bedroom home with 1,000 square feet or more but under $650,000, there’s just 55 from which to choose. This isn’t a lot, given that 165 condos fitting these criteria sold within the past six months. So, there’s a three month supply of housing. In a perfect market, you’d have five to eight months of supply. Less than that and there are too many buyers for the “good” properties and too much demand for sellers to be willing to negotiate. There’s always someone else, they’ll think.
My best advice is, be ready to go when you find the home of your dreams. See as many properties as you can, now, so that when you see the home you love, you know its value compared to what else is out there. Have your pre-approval in hand and already have talked to your co-buyers, lender, lawyer, and real estate agent about your plans.
Go in strong.
Above, 392 Marlborough Street #1, Back Bay, Boston, Massachusetts. Will Montero of Warren Residential Group. It is listed for $1.695 million.
Celtics coach Doc Rivers closed on the purchase of a luxury condominium home in the Back Bay of Boston.
According to Boston.com and the Suffolk County Registry of Deeds, Glen “Doc” Rivers paid $2.2 million for unit #1610 in the Four Seasons at 220 Boylston Street. Zillow.com reports that this was a two-bedroom, two and ½-half bathroom, ~1,801-square foot home. The building offers residents a spa, pool, fitness center, boardroom, 24 concierge, room service, and 24-hour hotel service.
Eagle-eyed real estate watchers will remember that this condominium was first listed for sale in June 2008 for $10 million. Yes, $10 million, or around $5,552 per square foot.
The list price was so astronomical that the Boston Herald did a story on it (there is a photo gallery of the interior on its website), and the Boston Business Journal did earlier, back when it was listed as a for-sale-by-owner at $8 million.
The owners eventually lowered the list price to a more reasonable $3.5 million when they listed it with Beth Dickerson at Gibson Sotheby’s International Realty in December 2010; eight months later, it’s been sold for $2.2 million, or $1,221, in line with other luxury, high-end condos sold in the Back Bay and Boston.
The sellers did well, after all. According to the public record, they purchased the condo in 1995 for $973,130.
Image above from Wikipedia
It won’t come as news to anyone who visits this website on a regular basis, but the condo sales data is out for first quarter 2011 and it shows Boston Proper condo sales prices increasing when compared to first quarter 2010.
This data is from the Listing Information Network, Inc., LINK, which tracks all condo sales in 12 of Boston’s core neighborhoods including the South End, Back Bay, Beacon Hill, Fenway, Waterfront, North End, West End, and Chinatown.
Condo sales volume is off by more than 13 percent, according to LINK, while prices are up, ever so slightly, about 1.25 percent.
According to Deborah Taylor Blair, president of LINK, “despite slow sales, the city’s inner core is holding its value … [with prices] up by 30.78 percent compared to a median price of $575,000 during the first quarter of 2005, when housing prices around the state were at their peak.”
Available inventory has dropped by about as much as the sales, which means we don’t have a glut of properties, right now. This is especially true in the lower range (under $450,000) and in the mid-range ($500,000-$650,000).
More: Condo sales in downtown Boston fall while prices slowly rise – By Jenifer McKim, The Boston Globe
Above, 2 Clarendon Street #104, South End, Boston, Massachusetts, one of Warren Residential Group’s many fine homes currently listed for rent and sale. Please contact me for more information.
Crackerjack real estate broker and all-around nice guy Noah Rosenblatt continues to break the mold, unveiling his newest service, Flat Fee Consulting for Manhattan Buyers.
He explains the concept on the Urban Digs website:
I am going live this week with what I think is an innovative new service for Manhattan buyers out there who do not want to take on a full buyers broker. A flat fee consult basically consists of all the ‘meaty’ parts of a buyer broker’s job without the buyer broker. As the buyer, you will submit the offer directly with the listing agent while hiring me as a third party consultant for the initial property valuation, comps analysis, bidding strategy, negotiating strategy, etc.. The centerpiece of this new service is a new tool I just developed called The Digs Report. Let me formally introduce it this new concept today.
Offering limited services to buyers in exchange for a discounted fee makes a lot of sense … for a specific type of buyer. Most buyers want the “complete package” when it comes to their agents. Advice, consultation, support, someone to drive them around … etc., etc., etc.
Some people, however, feel they can do all the work themselves. Or, they’ve already done the work, perhaps by going to open houses and looking at properties on their own. Maybe they’ve already found the home of their dreams, but now they need data, data from an unbiased source. The only way to do that is to pay an expert.
Massachusetts does allow agents to offer a similar level of service. It’s called a Facilitator. This agent provides a buyer with comparative market analyses, can give the buyer listing sheets, etc., but cannot offer advice on how much to offer to buy or negotiating strategies. The agent owes no “loyalty” to either buyer or seller. The facilitator is paid at closing, from the proceeds of the sale. In theory it works, but I’ve never encountered anyone who has actually used a facilitator. And, there is still the risk of threats of “bias” since the facilitator only gets paid if the buyer goes through with a sale.
An example of when this sort of arrangement might make sense is if you, as a buyer, visited the Boston Condo Blog and searched through the listings and decided, I can do all this work myself, all I need is a list of all the properties on the market. As a facilitator, I could provide you with all the data. If you find a property you wish to buy, you could then ask me to create a competitive market analysis of how the price of your property compares to other properties that have recently sold. Then, you’re on your own. If you go through with the sale, I get a commission, usually discounted from the traditional 2-2.5% that a buyer’s agent receives.
Many “traditional” agents fear this type of thing. Most people are afraid of change. Offering real estate services for a discounted fee chills many agents to the bone. Anything that puts their 2.5% commission at risk is evil. Flat-fee services such as those offered by Redfin and CondoDomain have rocked the real estate world. (They’ve yet to have shown they are viable business models, but that’s a different story.)
What do you think?
For more information, please contact me.
And, good luck, Noah!
Below, details (in summary) from the Urban Digs website. Check out his site for specifics.
The service will work like this:
1. Initial Property Valuation
The first step in the process is for me to verify that enough data exists to even run a comparable sales analysis with confidence. Generally, this means having enough sales data in the building that you wish to place an offer in.
Just like any buyer broker would require, I will need access to the target property to inspect: views/exposure, layout, condition, building amenities, etc..
2. Comparable Sales Analysis
What is the place you are about to bid on worth in today’s market?? The meat of the buyer brokers job!
As your outside consultant, I will perform a Comparable Sales analysis using in-building sales as well as current inventory trends for your local Manhattan submarket …
3. Devise a Bidding Strategy
The next step in the process is to discuss the analysis with you and devise an initial bidding strategy before submitting the offer …
4. Submit The Offer
Submitting your offer the right way helps your chances of getting the deal done immediately! At this stage we probably know where your initial offer will come in, which leaves writing up the offer letter the last job to do …
5. Negotiating Strategy
In this stage, I will act as your adviser behind the scenes as the seller counter’s your initial and updated offers.
5. Sign The Contract / Walk Away
a) continue and move forward with attorney phase
b) walk away
Simple. Clean. One-time service. Perfect for buyers that want to work on their own, yet feel they can use some assistance when the right property presents itself!
There are certain trends in the Boston real estate and condominium sales markets.
The spring is the busiest time for homes to be sold in downtown Boston. This is true in the country, as a whole. Mostly, this is due to the fact that most home purchases are by families with children. Parents want to buy and close on a home before the beginning of summer so that they can enjoy the warm weather and be settled in before school starts in the fall.
This flows through to the local real estate scene even though there is a much-higher number of single- and dual-income couples without kids buying.
It’s almost a self-fulfilling prophecy – more people buy in the spring so more people list their properties in the spring and more people look to buy in the spring because there are more properties on the market in the spring.
I looked at under agreement data for the past eighteen months in the downtown Boston, Boston Proper neighborhoods. The data was collected for 30-days at a time, so it’s a rolling trend chart.
As you can see, last spring, 2010, was the busiest time for downtown Boston real estate transactions. Two hundred properties were under agreement for a thirty day period in early-to-mid April. Closings scattered throughout the following six weeks.
There was a similar increase in under agreement activity in October and November. There is, every year, as people look to buy and close before the end of the year and before it begins to snow.
This year, 2011, you can see a similar increase in activity during the past six weeks. In fact, it almost exactly matches last year’s trend of under agreements, but at a lower level of transactions. This seems to be an accurate reflection of the market – we are seeing a lower number of sales compared to last year, by about 30%. Many people believe last spring’s spike in activity was due to the pending expiration of federal tax credits which may have prompted buyers to purchase real estate when they otherwise would have waited a month, two, six, or twelve.
This is good information to keep in mind if you’re buying or selling a condo. If you’re a seller, list now, before summer starts. If you’re a buyer, your best chance of finding a home that matches your needs is now, when the inventory is at a higher level. You might have more competition for homes, since everyone else is looking, but you will also find a better selection from which to choose.