Sellers was king but they are getting overthrown
Real Estate Prices Across the country have been rising and rising every year. Going to an open house with 30 other people looking at property. Arriving at a property with an open house to see a note on the door open house canceled. Later you find out what the property closed for and stare at your computer or phone screen in amazement. The Seller has been King! Does any of this sound a little too familiar? If you were a buyer in the market didn’t matter what price range you were in this was the norm. The King might want to pay close attention to his advisors when pricing there home unless he or she wants to get overthrown. Their ultimate rule looks like its coming to a close. In Massachusetts and nationwide there is a shift happening in Real Estate Market. Hopefully, whether your a buyer or seller you read this blog and realize the market is changing The data shows there is a shift you can’t deny it’s not happening. Over the summer though there were signs the Boston Metro Real Estate Market was changing. New York real estate market never heated up. Many agents reported the same finding in Boston,
the high-end market didn’t experience the same demand experienced in the past years. Did Boston have too many choices for buyers? Did high prices finally turn the eager buyer off? Maybe its raising interest rates and lack of consumer confidence in Real Estate Market especially in Boston? Most likely it was a combo of a few of those factors that caused the high-end market to show signs the market was changing. Boston is still on the main stage we have health, biotech, and education. Boston and Cambridge are well-insulated infostructures making them still a very desirable place to call home, however, some of the factors may have affected our market. High End has more inventory for the buyer to choose from which does drive prices down. Boston has limited investors on the new projects on market. Whatever starts at the top does trickle down to lower price ranges, and if you look at the inventory numbers 1st, 2nd and 3rd quarter there is a big change that has happened. Seller feel more confident to sell, and if they feel confident there is more inventory for a buyer to choose from which will affect pricing. When you add in higher interest rates its the perfect situation where buyers could come out on top getting a home they want on their terms.
First Quarter 2018 Back Bay had 84 listings that sold
Second Quarter 2018 Back Bay had 116 Listings that sold
Third Quarter 2018 Back Bay had 119 listing that sold
We are in the 4th quarter and there are 94 Listings on the market
All of these listings still sold but some sold with a price adjustment or sold with longer days on market. If you are thinking okay big deal that is just Back Bay and isn’t Back Bay where everyone wants to live anyway? Alright still not convinced let’s look at South Boston
First Quarter 2018 there were 136 properties that sold
Second Quarter 2018 there were 200 properties that sold
Third Quarter 2018 there were 293 properties that sold
We are in the 4th quarter there are 136 listings available in South Boston.
South Boston is interesting to look at the second quarter average sale and med sell both shifted when you compare the first quarter vs. second quarter. First quarter the average sale was $803,477 but the Med Sell was $734,950 and when you look to compare the second quarter the Average Sell was $759,804 and medium sell was $ 698,000. South Boston has more inventory on market compared to the first quarter and if you look at the third quarter there was more inventory on market then the second quarter, but it could be buyer who lost out earlier in the summer secured a home later and didn’t notice that there was more inventory for a buyer to choose from.
Typically in the fall, we have inventory in the market but it’s not as much as spring.
Last fall the market had less supply so the days on market ticked up but properties still sold for higher price. Sellers who felt there Reign was slipping showed evidence of concern, however, didn’t feel they were getting overthrown in there rule if they made some adjustments quickly. They ultimately sold their homes, and they sold pretty quickly if they listened to their advisors. Now we are seeing more inventory on market offering buyers more choices. Many of my buyers see a deadline when offers are due it has the opposite effect. Deadline either turns them off from the property or they are they want to watch it and put an offer on their terms, not seller. If we had low supply you would find the buyer being more in frenzy. If a property isn’t perfect a seller can’t assume the buyer will pay their price. This shift is starting to happen in many Boston neighborhoods. Agents doing open houses expecting to see new buyers are instead seeing the same buyer come thru but no offers. Some agents are also seeing seller unwilling to acknowledge their perfect price isn’t so perfect. Buyers realizing their place is nice but there are other options to choose from that they didn’t have last year. So that price the seller feels there is worth and what buyers feel is worth are two different things. Sellers will have a tougher time making the argument the neighbor down the street got X this past spring.
The last thing I looked at is 3rd quarter 2017 and 3rd quarter 2018.
They only neighborhoods who saw a decline in sales and stronger sales prices to reflect it was West End, Midtown, Charlestown and Beacon Hill. All other neighborhoods had more inventory on market for a buyer to choose from and pricing showed signs the market is behaving according. Doesn’t mean those areas didn’t sell, but all experienced longer days on market due to more choices.
What in store for rest of 2018 and going into 2019?
Will this shift in the marketplace be short lived? Will this be a long-term Trend? Real Estate works in cycles and many real estate forecasters are predicting raising interest rates, some buyers will exit the market and those who stay in will have more buying power. Buyers will be buying less home with there money did in the past, but their presence will hold greater weight. Sellers need to be realistic when pricing there home. The argument my neighbor just closed or sold during the spring market might not be a good argument. If it closed in the spring of 2018 or in prior years you might be citing a home that sold more then it was worth. Also, the days of buying a property and flipping it are not going to be as common. The Real Estate market should become a more balanced market for both, but if a property is truly unique it will still sell over asking and you might see those bidding wars but it will become less common.
What should be Buyer and Seller Game Plan and mindset be moving forward in the market?
If you are a buyer looking to buy I would say now is a great time to enter the market. Seller is often the last ones who realize the party has ended and buyers are the first to realize change. If you are looking to sell it’s still a great time to sell, but Real Estate Market requires realistic pricing. Open mind how to get the best price for your home will be more important than past years. I expect spring market we see more of the same trend. Prices will continue to show signs they are coming down, and agents will be doing open houses longer. Smart agents will be prepping clients they might not see an offer right away. If you want to sell you need to price the home realistically. The time one bought your home will play a role in pricing. It will be more common to see the same agent doing an open house every weekend. The deadline for offers will still come up but might see agents reviewing them as they come in. What comes up must often come down. If you are thinking about making home ownership part of your future contact me. Buyers sellers right now are getting overthrown from there reign in many neighborhoods so its a great time to be a buyer right now. Sellers who are looking to sell you can get a good price for your home, but your strategy on how you get to the best price also needs to change and it starts with how its marketed to the general public. Contact me if you’re looking to buy or sell and make you King or Queen of your domain.