Boston real estate price reductions
The Boston condos for sale on the market today are priced according to comps from he last 3 months of recent sale, which were the highest-priced sales in the history of the Boston condo for sale market.
To make matters worse, Boston condo sellers are naturally drawn to the highest-priced sales – but with the current climate the real estate market is in a flux.
Boston condo mortgage rates are now in the mid-5s, which to buyers feel like double what they were just a few months ago.
But the problem that I see is that Boston condo sellers are committed to their list price, but as rates continue to increase, at some point it will take out some Boston condo buyers, thus price reductions are inevitable.
What happens if sellers can’t sell their Boston condo?
Something will have to give and there are only three choices:
- Cut the price.
- Wait it out at this price.
- Cancel the listing.
That’s it, those are the choices.
Some Boston condo sellers will add a fourth choice – it’s my agent’s fault! If my agent would only advertise more, and do more open houses, and well, heck, do whatever agents are supposed to do to sell my Boston condo for my price, then it would sell! But you can spend a million dollars on advertising, and it still won’t sell if the price isn’t right.
Unfortunately, This is why the market won’t adjust right away. The gap between those 3 month old comps from yesteryear and what more rational buyers will pay today has never been so wide.
I foresee a slowdown unless Boston condo sellers adjust rapidly to the new reality.
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The Boston Herald reports on the positive effects to the end of the $8,000 tax credit (for buyers). Here are a few exceprts:
There’s a silver lining for would-be home buyers who missed the April 30 deadline for the $8,000 federal tax credit: Sellers are dropping prices.
The average price reduction for a single-family home or condominium in the Bay State last month was 8 percent, or $38,883 off the original asking price, according to real estate search engine Trulia.com.
In Suffolk County, which includes the cities of Boston, Chelsea, Revere and Winthrop, the price reduction was $43,288, or 7 percent off the listing price.