The New York Times has a breaking news story on the slowdown in the real estate market.
In Boston, there has been a large increase in number of properties on the market, over the past month. There are now over 2400 condos on the market, in Boston, whereas there were only 2100 two or three months ago. More indicative, the number of properties going under agreement is quite a bit less than the number of new listings coming on the market.
In my opinion, the same number of properties are coming on the market, but there’s been a drop-off in number of units going under agreement. For example, during the week of May 13, 243 units came on the market, and 169 went under agreement. This past week, however, 195 came on the market, but only 104 went under agreement.
Actually, that doesn’t sound too bad. Let me pick another week for comparison. The week before last, however, there were 280 new listings, but only 80 went under agreement. That’s less than 40% absorption, whereas we had 60% absorption in the spring.
It could very well be that it’s a general slowdown, or it could be a delayed fall market (we did have a delayed spring market, but the end result was that sales stayed extremely strong, when all was said and done).
What seems to be the reason that sales are slowing? Seems to be something as simple as pricing. In New York, for example, prices increased 10%, year-to-year, this summer. Only recently has the average sales price decreased, by 13%, according to this article.
"What will slow this market down, and has slowed certain segments of the market down, is overpricing," said Pamela Liebman, chief executive of the Corcoran Group, a large real estate firm in New York. "Back in the spring, there was such a frenzy that very pedestrian product was drawing multiple bids."
Some of today’s sellers appear to be pricing their homes as if the frenzy were continuing.
"Their neighbors sold their house when the market was red-hot, and everybody thinks their house is better than their neighbor’s house," said Maggie Tomkiewicz, the president of the Massachusetts Association of Realtors and a broker in South Dartmouth. "But when the neighbor sold, there may not have been five other houses on the market" in the area.
If you want your home to sell, you need to be careful about setting a realistic price. Compare it to what is out there, on the market today, and come in a bit lower. Or, suffer the consequences.
By David Leonhardt and Motoko Rich, The New York Times
A real estate slowdown that began in a handful of cities this summer has spread to almost every hot housing market in the country, including New York.
More sellers are putting their homes on the market, houses are selling less quickly and prices are no longer increasing as rapidly as they were in the spring, according to local data and interviews with brokers.
Complete article: Slowing Is Seen in Housing Prices in Hot Markets