Boston Rea Estate: Why Winter is a Good Time to List a Downtown Condo
- The average home spent just 61 days on the market, according to a January reading from Realtor.com. That is the fastest pace ever recorded.
- Homes sold even faster in several metropolitan markets. In Nashville, the average was just 29 days. In Denver, 35 days. The pace was 38 days in Las Vegas and 39 days in Seattle.
- The market is suffering from super lean supply. New listings in January were down 9% year-over-year. Total inventory was down 28%.
Anyone out there searching for a new Boston condos for sale in the north end to buy knows there is not much out there. Total supply and new listings are at record lows, and that means that what is on the market now is selling fast. Really fast.
The average home spent just 61 days on the market, according to a January reading from Realtor.com. That is the fastest pace Realtor.com has recorded since it began tracking the metric in 2016. It’s 10 fewer days than at the rate recorded in January 2021 and 29 fewer than the 2017-20 pace.
The days are calculated from the day of listing to the closing date. Closings can take a while, especially given the labor shortage in the market. It is common to hear, anecdotally, that homes are going under contract in less than a week after multiple offers.
Competition appears to be unusually fierce for January, which is usually one of the slowest months in the Boston condo market. The spring market generally kicks off with Presidents Day weekend. Rising mortgage rates during the month may have scared potential Boston condo buyers into stepping up their searches before rates price them out.
The market is suffering from super lean supply. Builders are still hamstrung by rising costs for land and materials, as well as a severe labor shortage. And sellers are simply not stepping up. New listings in January were down 9% year-over-year. Total inventory was down 28%.
“Factors like omicron uncertainties could be causing sellers to hesitate even when they know housing conditions are favorable,” said Danielle Hale, chief economist at Realtor.com. “Another key barrier is the inventory ‘chicken-and-egg’ dilemma that may vex sellers who are also buying: Do you list now when home shoppers are hungry for more options, or do you wait for more inventory to hit the market in the spring?”
Rising mortgage rates may also be keeping some potential sellers from making a move. The majority of homeowners with a mortgage now have a rate under 3%. The average on the 30-year fixed mortgage is now heading toward 4%. Current homeowners may not like the idea of paying more for the same debt they have now.
As rates rise, they also lose purchasing power. Home prices continue to rise at a fast pace, and in fact the gains in prices are still increasing. The expectation is that prices will cool as the number of sales drops. Homes are selling faster now, but fewer homes are selling, due to that short supply. Builders are also actively slowing sales of their own homes to make sure they can deliver them on time.
“With demand continuing to significantly outpace supply, we maintained our disciplined sales strategy by managing sales in the vast majority of our communities to align our sales and production cadence and maximize community performance,” wrote Sheryl Palmer, CEO of homebuilder Taylor Morrison, in its latest earnings release.
The N.A.R. economist/cheerleader gives his reasons on why sellers should list early this year.
I’ll add my reasons why sellers should get started earlier:
- Boston condo buyers have been more tolerant in the winter about sellers renting back the condo. Selling earlier and renting back the downtown Boston condo enables sellers to bank their equity and make non-contingent offers on their replacement home.
- Motivated buyers have been anxious for months to see the selling season arrive – and those are the buyers you want!
- Some day we could see a surge of boomers looking to cash out of their lightly-maintained, long-time residences. With loads of equity, they (or their heirs) could undercut you on the price for a quick sale.
- Historically, demand has been known to turn on a dime. Currently, there is little evidence of that, but if the season gets off to a slow start, the psychological ‘animal spirits’ could recede quickly – especially on price.
- New listings were down 50.9% in the Boston area, and active listings were down 25.2% from December 2019. The median listing price was $649,050, a year-over-year increase of 10%. Homes spent a median of 61 days on the market, 15 fewer than the year prior.
The best time to sell? When no one else is!