Tag: Boston absorption rate

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analytics

Boston’s Fiscal (Listing) Cliff

Great post from Curbed Boston Blog!

Here is the latest installment of Bates By the Numbers, a weekly feature by broker David Bates that drills down into the Hub’s housing market to uncover those trends you would not otherwise see. This week, David looks at the effects of Boston’s absurdly low condo inventory on the city

Boston%20Inventory%20as%20of%2012-12.jpgMcDonald’s would never run out of hamburgers.

Amazon would never run out of books.

But could Greater Boston run out of reasonably priced condos?

Currently, the city’s on-market condominium inventory is scary low. It’s so low that if we were using actively marketed Boston condos as gas for our car, we might not make it to the closest station to fill up. A year ago, Boston had nearly twice as many condos on the market as it does today. Brookline had two-and-a-half times its current condo selection and South Boston was marketing more than three times the 46 condos currently being marketed. Put simply: Regardless of price, there are very few condos available to buy in Boston; and, when demand is high and supply is low, prices go up.

You might not realize how the pricing menu of Greater Boston condos has changed in just a year. A year ago (12/12/11), the median list price of an on-market condo in the South End was $575K. Today, the median is $749K. Which is more incredible: the $174K increase or the fact that 02118 now has a 90210 median list price?

In Greater Boston, rising median list prices are not relegated to the South End. Brookline’s median list price for on-market condos is $202K higher than it was a year ago, up from $538K to $740K. And a year ago in Back Bay, the median list price for on-market condos was a cool million—today it is a cool $1.47 million. That new median might get Robin Leach excited, but if you’re looking for modestly priced Boston condos to buy, it’s an indication you just might have a better chance of seeing the Jets win the Super Bowl this year.

When Boston housing prices spiraled out of control between 2001 and 2005, the Boston Foundation’s Housing Report Card stated that it contributed to 60,000 more people leaving the Hub than coming to it, many of them in the 20- to 34-year-old age demographic. FYI, back in 2005, when there was no marketing of condos after they had technically found buyers, the city had five times the amount of condos on the market as it does today and the median listing price of the on-market inventory was $390K. Today the median list price of Boston’s on-market available-to-purchase inventory is $483K, which provokes the request: Would the last hipster to leave the Hub please take the titanium spork with him?

Categories
analytics general info

Lack of Inventory In Boston Getting Serious

My good friend, excellent agent and blogger Briggs Johnson at Coldwell Banker Residential Brokerage hits it squarely on the mark with this post which illustrates the decrease in inventory year over year and its potential effect on the market. I have posted it in its entirety below. Visit his blog. 

September 18, 2012 By 

“The Caravan Indicator”

There are several indicators and indexes that people follow to determine market conditions.  The indicator I am going to use that sparked this blog entry is  going to called the “Caravan Indicator”. What many people don’t know is that behind the scenes here at Coldwell Banker (downtown), every few weeks, we hire a bus to drive us all around town to check out new listings in Back Bay, Beacon Hill, South End, South Boston and the Seaport District etc. Its a great way for us to view new inventory and for us to be knowledgeable of the market in all price points. Today, is caravan day and it was cancelled due to lack of inventory…..Wait, What?! I can understand there being a cancelled caravan in late fall or August when everyone is on vacation, but not now, not September, not in the second week of the second strongest time of year to get new inventory. Really?

I was ready to bounce around the city and view some properties, but, since that wasn’t happening, I did some research to see how limited inventory really is. I went on MLS and looked up current inventory, the amount of listings currently under agreement and the amount of listings that have been sold in the past 2 months. The numbers don’t lie and I found them pretty shocking. Since I really only focus on the downtown neighborhoods. I used the 4 neighborhoods i do a lot of business in . Here are the Stats:

Neighborhood         # of Listings    # Under Agreement      # Sold in last 2 months

Back Bay                            104                                  57                                   124

South End                          78                                   57                                    110

Beacon Hill                        59                                  14                                      41

Seaport District               16                                  7                                        23

 

Last Year (2011)              # of Listings                          % Decrease from 2011

Back Bay                                213                                                           52%

South End                             183                                                           58%

Beacon Hill                            82                                                             28%

Seaport District                   37                                                             57%

 

The way I look at this information is that it is a great time to sell and list a property. There are a ton of buyers out there and they are in desperate need of decent inventory. On the flip side, If you are a buyer looking in these neighborhoods, be prepared to be frustrated and be ready to enter a multiple offer situation (if you are a serious buyer looking in a popular area). In the South End alone there have been 24 places go under agreement in the past 2 weeks.  If you are a buyer looking in the South End under $450k. there are only 9 places on the market and only 3 of them are north of Washington Street. If you are a buyer looking in the 800-1 million range in the Back Bay, there are only 11 listings on the market.  Six of those listings have been on the market for over 100 days, so quality is as compromised as quantity right now. If you are a Beacon Hill buyer looking from 600-900k there are only 3 listings on the market. 2 of those listings have been on the market for over 170 days. Brutal!!

I can understand that sellers are hesitant to list because there  isn’t much to move into if they sell and want to stay in downtown Boston. But if you are a possible seller looking to move out of state or to the “burbs” this could be an ideal time to make the jump.

I know all downtown agents are saying “list your property now” but hopefully some of this data, makes you think about the scenario with a different tone. Have hope and don’t be afraid to enter the market, just be informed and realistic.

Happy Hunting and Start Listing!!

 

 

Categories
general info

Real Estate Week In Review

Its February and you wouldn’t know it. There is no snow! Even better than that, the market is interestingly active.

The South End office had 7 under agreements this week. Our under agreements ranged from a property listed at $277K to one listed at $1,599K. Two under agreements over a million, 3 between $500K and $1M, and 2 under $500K.  This excites me more than anything. There is activity in all price ranges, and from what I hear around the office there are very serious buyers out there in all these price ranges just waiting for some good inventory.

 

The talk remains about the lack of inventory in all downtown neighborhoods. Available inventory is at an all time low of 2.23 months in the South End, and in certain price bands there is even less. The lack of inventory and strong buyer activity is creating many multiple offer situations. This is not mentioned to gin up excitement by any means but in order to maintain this early and healthy level of activity we do need additional inventory.

Some agents are even wondering if that winter vacation is such a good idea, as there is so much going on! I say go! Engage your coverage options and take a break as this early activity is boding well for a decent and busy Spring.

We had a great “robust” office meeting talking about the need to focus on a business plan and the need to utilize all the resources available in order to execute the plan, and of course the lack of snow and inventory. We had a fun agent and friends networking night out at Game On in the Fenway on Groundhog Day. I saw a post on fb this morning saying that Puxatony Phil is not a meteorologist and what the hell does he know anyway? 6 more weeks of winter? Hope not!

That’s it from here.

 

 

 

Categories
analytics trends

Inventory Scarce in The New Year

The buzz this past week in the market and in the office was of the extremely low inventory level of property for sale and in turn how this is effecting buyer engagement in the New Year. In stark contrast though there was lots of  buyer activity this past weekend. Plenty of buyers were out at open houses, showings were plentiful for what inventory there is and from all reports buyers were excited and and motivated. The challenge for agents and buyers alike is to keep engaged in the process as we wait for the inventory level to increase.

 

MLSPIN shows 94 condos on the market for sale in the South End on January 13. Last year at this time there were 102. In comparison, there were 133 condos for sale in January 2010 and 134 condos for sale in January 2009  in the South End.

For context the historically highest level of inventory we have seen in the South End was 268 condos for sale in May 2009, the height of the Spring selling season, and the historically lowest level of inventory is now. Today’s inventory level is approximately 1/3rd the inventory of May 2009. Unbelievable!

What has created this low inventory level? In the last 30 days we saw 16 properties expire out of MLSPIN. 32 went under agreement and in the same 30 day period 35 sold. This sustained level of activity created a 46% decrease in inventory in the last 90 days! From 173 condos for sale in mid October to 94 today. Currently there is just 2.3 months supply of inventory in the South End with similar conditions in other neighborhoods. There is 4.6 months of available inventory in the Back Bay, 3.2 months in Beacon Hill, and 3.3 months in both Charlestown and South Boston. A normal market, at least nationally,  balanced between a buyers and sellers market, is when between 6-8 months supply of inventory for sale exists.

This low inventory can usually be explained by the regularly lower inventory levels that are seen at the beginning of the year, and that is surely part of the answer, but I think there is more to it. There are many sellers who just aren’t putting their properties on the market because they see a new normal for price appreciation. On the other hand for those sellers who can see the opportunity in this rather unique historical perfect storm with lack of inventory and high demand for reasonably priced properties, there has been no better time in the last several years then now to market a property for sale. There is less inventory thus less competition, and demand is exaggerated by this lack of inventory. Interest rates are at an all time low too!

I am not playing the role of realtor cheerleader here, I am just relaying the facts. Although I may be an optimist I am a pragmatic optimist. Facts are facts and they all point to a market situation which is just begging for inventory.  I will keep you posted week by week as we see how the Spring Market of 2012 evolves.  It is sure to be interesting.