Boston condo sellers: The thoughts of the Day
Boston condo sellers: The thoughts of the Day. There’s no doubt that 2021 is the year of the seller when it comes to the housing market. If you’re a homeowner thinking of moving to better suit your changing needs, now is the perfect time to do so. Low mortgage rates are in your favor when you’re ready to purchase your dream home, and high buyer demand may give you the leverage you need to negotiate the best contract terms on the sale of your house. Here’s a look at what’s driving this sellers’ advantage and why there’s so much opportunity for homeowners who are ready to move this season.
1. Historically Low Inventory
The National Association of Realtors (NAR) explains:
“Total housing inventory at the end of March amounted to 1.07 million units, up 3.9% from February’s inventory . . . Unsold inventory sits at a 2.1-month supply at the current sales pace, marginally up from February’s 2.0-month supply and down from the 3.3-month supply recorded in March 2020.”
Even with a slight rise in the number of houses for sale this spring, inventory remains near an all-time low (See graph below):High buyer interest is creating a major imbalance between supply and demand, but as the small uptick in inventory shows, sellers are beginning to reenter the market. Selling your house now enables you to take advantage of buyer demand and get the most attention for your house – before more listings come to the market later this year.
2. Frequent Bidding Wars
As a result of the supply and demand imbalance, homebuyers are entering bidding wars at an accelerating rate. NAR reports the average number of bids received on the most recently closed sales is 4.8 offers. This number has doubled since the first quarter of 2020 (See graph below):As buyers face increasingly tough competition while searching for homes to purchase, they’re more likely to be flexible and generous in their negotiations. This gives a seller the opportunity to choose the best buyer for their needs and be selective about things like time to close, contingencies, renovations, and more. Working with your trusted agent is the best way to determine how to navigate the negotiation process when selling your house.
3. Days on the Market
In today’s market, sellers aren’t waiting very long to find a buyer for their house, either. NAR reports:
“Properties typically remained on the market for 18 days in March, down from 20 days in February and from 29 days in March 2020. 83% of the homes sold in March 2021 were on the market for less than a month.” (See graph below):
“The sales for March would have been measurably higher, had there been more inventory…Days-on-market are swift, multiple offers are prevalent, and buyer confidence is rising.”
If you’re thinking about moving, these three graphs clearly show that it’s a great time to sell your house. Let’s connect today so you can learn more about the opportunities in our local area.
With listing prices seeing their fastest growth since January 2018, home sellers are firmly in the driving seat when it comes to sales negotiations, experts say.
Realtor.com reported in its latest Weekly Recovery Report covering the week ending August 15 that median listing prices in the U.S. are up 10.1% compared to the same time one year ago, thanks to a combination of strong demand and low inventory.
“With supply and demand moving in opposite directions, sellers are clearly gaining the upper hand in the market as buyer competition builds up and prices gain momentum going into the fall,” said Javier Vivas, director of economic research at realtor.com. “Buyers hoping to close on a home this year should expect some hot competition, especially if they are looking at more affordable or entry-level housing.” Buyers who want to get ahead of the competition should consider getting preapproved for a mortgage so they’ll be ready to make offers quickly, Vivas adds.
The good news is that more listings do seem to be coming onto the market, which should mean more choices for buyers in the future months.
Boston Housing Recovery?
“The lack of options of homes for sale has been a key factor limiting buyers in the market, so a continued recovery in new listings is key for home sales and overall market health in the coming months,” realtor.com’s report noted.
Another interesting stat from the report is that homes are spending less time on the market, selling four days faster than last year, underlining the strong demand the market is seeing currently.
Realtor.com says we’re currently in a strong seller’s market. It said that sellers are holding the upper hand, homes are selling quickly, and buyers are feeling increased pressure to find a home that fits their needs.
Are we entering a new Boston Condo Seller’s market?
Some Boston condominium owners don’t really understand the seller’s market. It means that sellers can spend less money on selling their Beacon Hill condo and get more money for it.
Staging is much more important during a buyers market than during a seller’s market. We have sold vacant unfurnished condominiums with multiple offers and our clients have gotten more than the asking price.
Any downtown Boston condo can be sold quickly without open houses. The main reason for open houses is they give REALTORS a chance to meet the neighbors who might also want to sell and to find future homebuyers who are looking for an agent.
Everyone has a story about a property that sold during an open house. It can happen but houses that are never held open sell just as quickly.
Making repairs is often a wise investment but condominiums can be and are sold “as-is” without the seller having to make any repairs all the time.
Houses can be sold during the pandemic by having virtual showings and few or no in-person showings.
Back during the last recession and housing market crash, it was hard to sell a house. They were often on the market for many months and even years. It was a buyer’s market and we had to work hard to entice buyers.
Anyone planning on buying or selling real estate needs to understand what is going on today in their local market and forget about how things used to work or how they work in other states.
Most things you buy have a price tag on it and you either pay that price or you don’t buy the item. Boston’s real estate is different. Real Estate has what is called an asking price or listing price. This is the price that the homeowner wants to sell his/her condo or townhouse. (a.k.a wishful thinking)
Boston condos buyers may see many properties in their home search before they find the one that gives them that comfort feeling and so they develop a sense of what a condo is worth which might be different than what a seller is asking. That sense of what a property is worth is based on a lot of things, the buyer’s budget, how much they like a condo, how long they have been looking.
Each real estate agent works differently too. I would never tell how much a buyer should pay for a property. I will not be living there and it is not my monthly payment. I will, however, provide the “comps” in the area so a buyer can analyze how much they should pay. I will walk them through the “comps” and explain about different properties to help a buyer decide what their price is…but in the end, it is the buyer’s decision.
In those discussions, my buyer and I might develop a strategy in how we want to approach negotiation. Do we want to offer a high number to begin with? Do we want to start lower and see what the seller says? I recently negotiated on a Boston condo where my buyer decided to start with a certain number, we reviewed the comparables, we had a long discussion about the pros and cons of this particular Boston condo and my buyer decided this was how she wanted to approach it. It was a respectful offer based on the comps in the area. A few hours later I got a call from the listing agent who said “quite frankly, the seller was insulted” with what I believed to a perfectly respectable opening offer. Sellers can get very emotional and stressed. For a seller to be insulted with an offer close to 90% of asking price is a lack of understanding of how this process works.
Buyers want to get the property for the best price they can and so have a right to offer what can be construed to be a low offer. It is the listing agent’s job to have the seller understand that this is a negotiation and they should respond because otherwise, they will never know how much a buyer might actually pay for their home.
Boston Real Estate and the Bottom Line
If you’re thinking about moving, the three graphs above clearly show that it’s a great time to sell your Back Bay, Beacon Hill, or Boston Seaport condo. Let’s connect today so you can learn more about the opportunities in our local area.