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.
Some folks out there don't want me to hype the current market conditions by referring to it as "the over-ask era." Yet, how better to describe the extraordinary events currently occurring in nine key Boston condominium markets? Two years ago, only 9 percent of the sellers who closed in June in these markets enjoyed over-ask offers. A year ago, an impressive 21 percent of June sellers took their over-ask offers to the bank.
The over-ask tide, though, was just making its way to the Boston condominium shoreline. In January 2013, 23 percent of sales were over-ask; in February, 33 percent; in March, 40 percent; in April 45 percent; and this June, nearly 56 percent of closings had over-ask offers. Simply put: This June, more buyers paid over the asking price than under the asking; more buyers preferred winning to negotiating. Incredible!
In addition, there were nearly 70 June sellers who took not a penny more nor a penny less than full price. This means that more than two-thirds of June closings had no negotiation room whatsoever. Double incredible! In fact, the only thing that seemed to stop the share from growing larger was that lackluster, under-performing market known as Back Bay, where only half the June sales were for full price or more.
Obviously, when you can't pay less, you have to pay more. Sometimes you pay way more. Out of the 563 sales I looked at in these nine key condo markets, 40 buyers paid at least $50K over-ask. Six paid at least $100K over-ask. And one, the buyer for 975 Memorial Drive, #601, in Cambridge, dared to pay $200K over-ask. Breaking down June another way, more than 125 buyers in these markets—representing nearly a quarter of the sales—paid at least 5 percent over-ask. More than 40 buyers paid at least 10 percent over-ask; and nine paid at least 15 percent over-ask.
I'm running out of superlatives for the June market, so here's a four-category offer-assessment tool for today's most coveted condos.
· Below-ask offers: Not even worth looking at.
· Full-price: Thanks, but no thanks.
· Over-ask: Now we're talking.
· Crazy over-ask: Jackpot!
Carol Kelly, a Cambridge broker with 30 years of experience, told me she has never seen a market like this. She recently negotiated a $175K over-ask (winning) offer on behalf of very savvy buyers. So, I ask, is calling it the "over-ask era" hyping or just reflecting what is happening in our market? You be the judge.
(Markets reviewed for this column: Back Bay, Brighton, Charlestown, Jamaica Plain, South End, South Boston, Brookline, Cambridge and Somerville)
· Our Bates By the Numbers archive [Curbed Boston]