I’m visiting my parents in New York. Predictably, the conversation turns how the Boston condo market is doing, and observations about what’s going on in the market, now and in the future.
In case the subject comes up at your Thanksgiving, here are things we discussed:
- Boston condo sales are down, but they aren’t zero – and what’s selling tend to be the spectacular homes that are priced attractively.
- Sales are being hampered by the light inventory. I expect there will be the same or fewer Boston condo for sale as sellers decide to wait until the “market gets better”.
- Jumbo mortgage rates in the 5s are tolerable, and above that is problematic. Higher rates don’t only make homes less affordable – they also cause buyers to have a psychological expectation that Boston condo sellers should come off their price. The higher rates go, the more standoff there will be between Boston condo buyers and sellers.
- To get deals, Boston condo buyers have to cause them – and they are happening. I saw how one of my recent sales listing knocked off more than 10% for the sale to happen.
- Boston condo sellers have gobs of equity now….and those who need to move bad enough are giving up decent chunks of it. It means we could have a much faster decline in pricing than ever before.
- I am still convinced that by March/April, the spring selling season will kick in and homes will be selling briskly for all the money. It’s likely that we’ll get off to a slow start as both Boston condo sellers and buyers wait for someone else to go first, but by the end of March or April we will see bidding wars again.
- Realtors are woefully ill-equipped to handle these conditions. They have no strategies for a soft market and are very reluctant to price aggressively or reduce a list price properly.