Here's the latest installment of Bates By the Numbers, a weekly feature by Boston real estate agent David Bates that drills down into the Hub's housing market to uncover those trends you would not otherwise see.
You know it's a low-inventory market when?
The property has been on the market "zero" days and the agents are asking, "How are you handling offers?"
When you get to the first broker tour and the agent says they already have some very good offers on the home.
When you arrive at the first open house and they greet you with the information that the home is under agreement or, worse, you show up and there's just a sign on the door: they canceled the open house because they took an offer.
A prospective buyer asks if the seller is negotiable and the listing broker breaks out in hysterical laughter.
When buyers have less than one hour to assess the home and determine how much debt they want to go into for the next 30 years because property is moving so fast there wouldn't be time for a second showing.
When buyers wonder why a home has been on the market so long when it's only been on for eight days, one-tenth of the market time it took to sell a Boston condo that closed in May 2012.
The Boston on-market condominium inventory is less than one-third of what it was just two years ago (see chart); and, of course, the lower the inventory, the higher the offers go compared to the list price. Today, sellers are turning down over-ask offers, offers that are way over-ask, and offers that are way, way, way over-ask. How far over-ask does the offer have to be to win?
On April 2, 79 Chandler Street, #9, in the South End listed for $2.295 million. On May 22, 79 Chandler, #9, sold for $2.461 million. That's $166,000 over the ask, an amount that's even more than the $126,000 over-ask South End sale I wrote about in my March 20 column.
In May, Cambridge had not one, but two condo sales with offers that went at least $100K over ask.
In May, JP had six sales that sold for at least 10 percent over ask.
In Somerville's highest May price range for sales, $500K to $599K, nine of the 12 sales went for over ask.
There are a few over-ask offers that weren't for condos, but merit acknowledgement as they, too, are signs of the low inventory in Boston's real estate market.
An attached single-family at 21 Bowker Street in Brookline, with a $725K list price, garnered 25 offers and sold for $906K. That's $181K over-ask—a lot, for sure, but it doesn't compare to the single-family at 79 Coolidge Street, also in Brookline, which may be the mother of all residential over-ask offers. This home was listed at $750K and described by some trained architects as "a tear-down." Yet, 31 offers later it sold for $1.126 million, $376,000 over the asking price.
Sky-high rents, dirt-cheap mortgages and a lack of inventory are provoking over-ask offers with the Hub's investors as well. An 18-unit investment property came up on one of Beacon Hill's best streets, Brimmer Street. The ask was $6.75 million. Forty-two offers later, the get was $8.25 million. Incredible!
When you see multiple offers on multiple properties, you know you're in a low-inventory market and when you read "Bates By the Numbers" on Curbed Boston, you definitely know you're in a low-inventory market.
· Our Bates By the Numbers [Curbed Boston]