The supply and demand dynamic is firmly in place in downtown neighborhoods with not enough property for sale relative to buyer demand. Taking all Boston neighborhoods together, condominium inventory is down 32% from the same time last year – from 2,010 properties for sale last year to 1,360 today. In the South End there are 129 condos for sale versus 205 on the market last year at this time, a 37% decrease.
Linda Ciborowski, a top South End agent with Coldwell Banker Residential Brokerage, sees two very interesting developments as a result of these depressed inventory levels. Linda says, “Anything that shows well, is in good condition and in a desirable location sells with amazing speed. I’ve noticed two interesting things that make it even more important to be working with a good broker.”
“Brokers who don’t know the market are pricing properties too low based on old comps or too high based on false expectations. Initial pricing just seems more important than ever.”
“Appraisals have become very difficult since the properties that have closed in the past 6 months don’t reflect the prices that new listings are going under agreement for due to prices being driven up by low inventory.”
This low level of inventory poses a few issues for the strengthening real estate market downtown. The first being that inventory is needed to sustain the strong beginning to the spring market. The second is that high demand and low inventory creates what some may consider “irrational exuberance.” I don’t believe it is irrational. These conditions “on the street” have created this excitement… and the excitement is real! Just ask any buyer who has missed out on a property or talk to any agent who has dealt with 40 people at each of their Sunday open house. It is exciting… and we will keep our eye on the market as we move into May.