You may be working with an agent, who like me, recognizes an educated client is a happy client. If not, I offer you some information to chew on. I recognize many of you reading this are qualified to buy (a great thing in this market), but perhaps waiting for property to drop further (a bad thing because you are missing an opportunity to invest in a home and move on with your life).
LINK (Listing Information Network), one of two MLS (Multiple Listing Service) systems that serve the Boston market, recently published their second quarter real estate data. There are lots of juicy details (yes, I’m an economist at heart) that will bore most of you, but the one item of particular interest I would like to share with my clients is, LINKs 2010 Second Quarter Sales Summary.
This Summary information shows a snap shot of Metro Boston neighborhoods, namely Back Bay, Beacon Hill, Charlestown, Fenway, Leather District, Midtown, North End, Seaport, South Boston, South End, Waterfront, and West End. It’s a quick look the following items that are captured: Property Sales, Average Sale Price, Median Sale Price, Average Price Per Square Foot, Median Price Per Square Foot and Days on Market.
Yes, much of the data reported by LINK may seem encrypted, dry and boring, but, like medicine it needs to be taken. The information is important and relevant to those of you seriously buying a home. Ask your REALTOR® to interpret information with you. Review recent sales in a particular neighborhood of interest including active, sold and under agreement. Consider the full picture of all condos in a neighborhood of interest, and then and only then, narrow it down to like property. Compare apples to apples. You will want to review price per square foot of property in a 90 day range. Why? Because unless you buy the home with cash, you will need financing and when you need financing that means a lender will need to get the property appraised. Because property values have dropped and the market is continuously changing, appraisers will review like property (similar living area, bedrooms etc) in a 1-5 mile radius within the past 60-90 days. Reviewing price per square foot by Boston neighborhood should be a point of interest to you and your Realtor when you are buying or selling property. This baseline information helps to compare prices, understand buyer trends and economic activity. There’s more digging your REALTOR® will have to do, but it’s a good starting point.
Another important factor is DOM or rather Days on Market. Typically a high DOM is seen to represent that a property is over priced and while that is some times the case it’s not always the reason. Real estate fact 101 is that any home even one with a rail road track running through it should sell in 30 days. When a home isn’t sold within a 30-45 DOM, it could mean a number of things, including
- There’s a problem financing the property
- A buyer made an offer but had problems qualifying (for a loan)
- The listing agent over priced the property to get the business
- The seller simply is unreasonable and emotionally charged
Your REALTOR®, particularly in this case a Buyer Agent or Representative, is trained to investigate all these little nuances, like a detective they are versed in digging up important and useful information to present to you. Information you can use to negotiate. Important wouldn’t you agree?
(South Boston) Notable Neighborhood:
The one neighborhood that continues to “rock” is South Boston. Put another way, South Boston offers the best bargains in town. Compared to other neighborhoods on Link’s 2010 Second Quarter Sales Summary, South Boston homes are priced the lowest and seem to be most active. The price per square foot is $376.60, the Average Sale Price was $363,659. Comparatively speaking, the number of sales are highest at 202 units sold 2nd Quarter 2010.
The average DOM is 72, which tells me agents are pricing units to market or rather this is an indication that the homes in the neighborhood are priced to where/what the consumer is willing to pay. Demand = Supply. The lower the number the quicker the home was sold. Some may argue the area is over developed, however, having investigated many homes for my buyers over the past few months, I’ve observed that availability of condos on the market and quality product are mutually exclusive. Homes are priced competitively and the quality is excellent.
South Boston is a vibrant town with the best of all worlds! It has a neighborhood feel, a small community close to the water and only a few minutes from Back Bay or in another direction to the financial district and the Seaport area. Literally, a short bus ride in any direction.
I hope you find this information useful!