What is the Boston condo for sale wildcard in this market? Answer, almost every potential downtown Boston condo seller has sufficient equity to lower its price if they wanted to. But will they?
Why a Boston condo seller would take a haircut on a sale is not necessary, when there are so many other alternatives (renting, reverse mortgages, hard-money loans, etc.) is beyond me. Even flipper companies like Opendoor have to pay somewhat close to retail to get business. so their margins are tight.
In the last few months, I had sellers who opted to rent or withdrew their listing rather than cut prices – like here, where I had one condo for sale in Beacon Hill and after being on the market for over 100 days, they opted to take their condo off the market rather than cut the price.
Those sellers purchased their condo back in 2005, so they still left town with a smile on their face – but you can guess that the neighbors didn’t appreciate it. Especially the one who purchased a similar unit in the same building for over asking price.
It would take a few desperate Boston condo sellers dumping at the same time to call it a Boston condo buyers market. I can see a buyers market in the works nationally but here in Boston, its going to take some time, and perhaps even a deep recession.
But if there were enough of those closings sprinkled throughout the county, the median sales price (a terrible measuring device) could fall 10% or more pretty easily.
When looking at 2023 and beyond, you can probably expect that there won’t be many realtors like me that advise sellers to hold out on cutting their price. It doesn’t change their paycheck much if they dump and run, and there won’t be anybody in the press or social media sticking up for sellers either.
There is a chance it could get ugly – just because sellers have so much equity that it feels like free money, and they will still walk with hundreds of thousands of dollars, even if they decide to give it away.