No Responses to “Boston condo inventory – Frustrating” »»

1. John Keith
   Comment by John Keith | 12/03/08 at 4:22 pm

   I know that people will read what you wrote and some will say that we’re just trying to drum up interest, but it’s true, there is a limited supply of housing available for sale, and even less of a supply in the price ranges most of us are looking for.

   Even though sales are off 25% in the Central Boston area, there are still people who want to buy real estate and there will continue to be people who want to buy real estate.

   I guess agents will just have to start picking up the phone and calling owners at random, “Hi, will you sell your home?”

2. Hrmm!
   Comment by Hrmm! | 12/03/08 at 4:49 pm

   Holding them chips, eh?

3. Kathy
   Comment by Kathy | 12/03/08 at 6:15 pm

   If there are truly that many buyers out there, then prices for the extremely few properties on the market will zoom up even higher than they are today. Potential sellers will see how much profit they can make and will put their homes up for sale to cash in on the hot market.

   But clearly that ain’t happening, so something else must be going on. Eh?

4. condobuyer
   Comment by condobuyer | 12/03/08 at 6:34 pm

   John,

   Based on your last comment of brokers calling home owners–why don’t you try it? I guess it must be a seller’s market out there, huh? That’s why many sellers are selling for less than purchase price. Moreover, all the new developments ought to be sold out by next week, right?

   I’m with Kathy on this one.

5. John Keith
   Comment by John Keith | 12/03/08 at 6:54 pm

   For anyone else interested in the point I think we were both trying to make, during the past 30 days, exactly 1 condo has been listed for sale in the Back Bay for anywhere between $400,000 – $500,000 (any size) and there are currently 12 condos for sale in that price range, of which six have been on the market for over fourth months meaning

   1) anyone who was interested in them would have acted by now; and,
   2) they were most likely overpriced for what the market would allow, or unsaleable at any reasonable price.

6. jmh
   Comment by jmh | 12/03/08 at 9:30 pm

   It’s the same out in the ‘burbs. No inventory.

   We’ve been looking to buy for awhile but anything out in our price range is junk that has been on for a very long time. Very overpriced. There’s very few new properties appearing as well.

   The shelves are bare. It’s understandable, would you put a house/condo for sale right now if you didn’t have to? As a buyer, I’m in no rush either.

   I think we’ll be in a stalemate for awhile.

7. Matt
   Comment by Matt | 12/03/08 at 9:44 pm

   Sounds like sticky prices. No ridiculous foreclosure rate to force down prices. Owners think they can wait it out. But is any bank going to be making the type of loan that fueled the boom? Doubtful. Sellers will hold out until they have no choice, and pay for it. How many would be sellers are wishing they took offers they had in 05 or 06? Soon they will be wishing for the offers they have now.

8. Jim Patterson
   Comment by Jim Patterson | 12/03/08 at 10:39 pm

   I own a condo in the Back Bay priced between 450k – 500k that I would love to sell, but I feel like the buyers out there are all looking for a ’steal’ and all I got were lowball offers.

   Condos in the Back Bay can be rented out in a second, so the bottom line is I am not selling until I get a price that I want and I’ll rent it out forever if necessary.

   Maybe a lot of those condos for sale are now apartments for rent. All the people that ‘had’ to sell sold already, and everyone else has the the financial means to rent it out and wait out the downturn.

9. Ken
   Comment by Ken | 12/03/08 at 10:55 pm

   Seasonality? Don’t be too surprised when inventory starts going up 100 condos a week in March/April.

10. John Keith
    Comment by John Keith | 12/03/08 at 11:06 pm

    Not necessarily the season, Ken. On December 8, 2007, there were 2,212 condos listed for sale in the local MLS, on November 30, 2007, there were 2,319 condos listed for sale, and on November 15, 2007, there were 2,400.

11. confused
    Comment by confused | 12/04/08 at 8:21 am

    Hey Jim, what’s the rent. How does that relate to the cost to own if you get “a price that you want”? How do the lowball offers relate to rent to own ratios?

12. Kathy
    Comment by Kathy | 12/04/08 at 9:27 am

    Like I said, if there are buyers then the sellers will appear. But as Jim says, the few buyers that are out there aren’t going to pay bubble prices anymore, the sellers know it, so they’re not listing. Inventory thus goes down down down.

    This will work itself out in time.

    Not everyone is going to want to be a landlord for the next god knows how many years, so those who have to sell because of job loss, children or relocation are gonna just have to suck it up and take the hit.

    In the mean time, it’s going to be an extremely tough time for anyone involved in the buying and selling of property.

13. Ned Lynch
    Comment by Ned Lynch | 12/04/08 at 12:06 pm

    “…going to be an extremely tough time for anyone involved in the buying and selling of property.”

    My suspicion is that all this depends where you are.

    Back Bay and Beacon Hill are tough spots right now. I think there is too little inventory for buyers (tough for buyers agents), and certain listings should come down in price (but aren’t, tough for sellers agents). Are Back Bay and Beacon Hill are at “bubble prices?” I don’t think so. Should and will they come down a bit? Probably.

    On the other hand there are places like Dorchester, which did have bubble prices, have come down (crashed), and there is plenty of inventory. I don’t know what it is like for agents there (not an area I cover much), but I have had a few buyers interested because of the deals there.

    Charlestown seems to be doing quite well as prices have dropped slightly and there still is quite a bit of inventory. I know the agents I have talked to in Charlestown seem to be much more upbeat than those of us in Beacon Hill and Back Bay.

14. John Keith
    Comment by John Keith | 12/04/08 at 1:08 pm

    I’d have more fear if I was an auto salesman than real estate agent …

15. Ned Lynch
    Comment by Ned Lynch | 12/04/08 at 1:27 pm

    I’d have more fear if I was an auto CEO than real estate agent …

16. Kathy
    Comment by Kathy | 12/04/08 at 1:47 pm

    Ned – So you think $16 million for a piece of the Mandarin Oriental is not bubblicious? Or say, $500k for a 1 bed, 600sqft apartment with no parking, laundry or air conditioning?

    My general feeling here is that a lot of people either are too young to remember the last real estate bust, or weren’t involved in high tech during the Internet bubble explosion.

    I’m sorry to say that a lot of people around here are in for a very painful awakening. It’s going to be pretty amazing how far prices are going to come down. And then they’re going to go down even further than that. And then, just when you think they can’t go down any more, they will. I’ve been through it before. Trust me.

    There’s gonna come a time when we’ll look back on an average of over $700 per sqft and just sigh with amazement.

    Don’t mean to come across as a Debbie Downer, but the pain has only just started folks.

17. Chris
    Comment by Chris | 12/04/08 at 2:47 pm

    Who invited Kathy to this party anyway? Jeez, I should go rip up the p&s I signed last night because obviously according to Kathy I am throwing money away on my new house.

    Bottom line is no one knows where this is all going but people need somewhere to live – like me and my family. I don’t want to rent. I can afford my mortgage, like my new place, like my new neighborhood, and plan on living there for a long time.

    And then before we know it, prices are going to go down even further….

18. condobuyer
    Comment by condobuyer | 12/04/08 at 4:14 pm

    Chris,

    If you think your place is worth the price and you intend to live there for a long time, then my guess is you made a good decision. However, many people in boston, especially young professionals/first time purchasers looking for condos intend to stay in their place for maybe 4, 5, 6 years. If I was intending to live in my condo for 15/20 + years, I would be in a different category. For those who intend to stay in their place for less than 5 years I personally don’t think it’s an optimal time to buy. 5-7 years, you can maybe anticipate breaking even or making a little profit assuming you get a good deal now. Regardles of whether the market will bottom out in 2009, 2010 or 2011, the fact is it will take a looong time for prices to start increasing again and they will not increase at the 03-06 pace. Very few people who bought in the last five years can sell for a profit right now.

    Furthermore, everyday there are 100s of more local job losses and it would be pretty ironic if that had little impact on real estate in the city.

19. Ned Lynch
    Comment by Ned Lynch | 12/05/08 at 1:26 pm

    Crystal ball gazing into the future is very tough. We all can have short memories which can greatly affect our view of hard data. For instance, the last decline in Boston (according to Case-Schiller) lasted from 1988 and started recovering in 1991. That is a 3 year period. The current Boston market (again from Case-Schiller) “peaked” in Sept. 2005 and has gone down since. Again a 3 year period. I am not saying there is any correlation between the 3 years (the Boston market may have quite a ways to go yet), however I don’t think many people realize the length of both the previous recovery and the current decline. (Btw. Case-Schiller stuff can be located here: http://www2.standardandpoors.com/portal/site/sp/en/us/page.topic/indices_csmahp/0,0,0,0,0,0,0,0,0,1,1,0,0,0,0,0.html )

    I think there is a big difference between a crash from a bubble and a healthy correction. Miami, with a 4 1/2 year supply of condos and all it’s other worrisome signs, is more of what I would call a bubble. Boston, which has a 6-8 month supply and fewer of the other “bubble” signs, may not sink so low.

20. Ned Lynch
    Comment by Ned Lynch | 12/05/08 at 1:46 pm

    As to the direct question: So you think $16 million for a piece of the Mandarin Oriental is not bubblicious? Or say, $500k for a 1 bed, 600sqft apartment with no parking, laundry or air conditioning?

    Not to be glib, but I think they are worth exactly what the market says they are. A 600 sqft, 1 bed in Louisburg square seems like a steal. The 8000sqft condo in the Mandarin isn’t too crazy when its nearest comp in Trinity Place sold for $15 million ( http://www.boston-condos-for-sale.com/2007/07/30/trinity-place-penthouse-15-million/ ). That is a very unique market, and I can’t say for sure what the price should be. But just because it has a high price tag, doesn’t mean it is a bubble price.

21. Boston Condo Guy
    Comment by Boston Condo Guy | 12/05/08 at 3:20 pm

    Note that the $15 million Trinity Place listing never sold. After the listing was removed from the market, it was broken into the two individual units that were combined, and are still available for sale to this day.

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