The problem with the Boston condo market
I said this in a previous Boston real estate blog post, and I’ll say it again, it will become harder to sell Boston condos for sale. But wait – isn’t the demand overwhelming? Yes, but it’s a price thing.
Think of the pressure on sellers now.
It was bad enough when the seller’s ego had to endure the actual or perceived pressure from friends and family about getting your price. It was probably more subconscious than conscious, and nobody really had to say a word.
Sellers just think that their family, friends, and neighbors are all watching, and they want to show them. As a result, once a Boston condo goes on the open market, the seller’s ego wants all the money.
But then over the last year, sellers have been in bidding wars erupted out of nowhere and sellers got more money than they ever thought was possible. Way more than their ego needed, and sellers couldn’t wait to tell everyone how great it turned out.
But as the frenzy settles down, will sellers be able to cope without a tale to tell? Will their ego survive not having a bidding war?
In their mind, their opinion of their home’s value is built on top of the frenzy sales, plus a little extra.
Are sellers motivated enough to price sharply from the beginning, and/or lower their price early and often when it counts?
Hence, the frenzy environment has to continue, just so sales will happen.
Agents who have been in the business for 12 years or less only know a strong sellers’ market. They will continue to offer half-baked listings with 60-80 photos, no video, and a crazy price – and expect buyers to pay it. Throughout their history, buyers always have.
Sellers will now expect 5% over comps AND a bidding war to push it higher! Anything to the contrary will not go over well, and sellers and listing agents will be slow to react.
First, you’ll see listings not selling, and inventory starting to stack up. Then sales won’t be as brisk as they have been over the last year.
Sales will suffer before pricing does.
Keep an eye on sales. They are your leading indicator.
This is how the frenzy will end, it’s just a matter of when.
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Updated: Boston Real Estate 2021