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. Check out his ebook, Context: Nine Key Condo Markets, 2.0.
Is winter kicking your butt? It is mine. But you know who's tougher than winter? The Hub's condo market, that's who.
The velocity of condo sales this truly New England winter is so amazing that it makes me think of my 4-year-old daughter's favorite number, "eleventeen." It's a number that doesn't exist and shouldn't. Yet, when I look at the numbers that reflect how fast the local condo sales pace is, I see numbers that shouldn't exist, yet do.
Absorption in real estate (available inventory divided by the sales pace) usually characterizes the sales pace as either a seller, a neutral or a buyer market, but the Hub is so deep into a seller's market that I am going to add two new absorption categories: "OMG" and "WTF."
Anywhere there is between a one and one-and-a-half month supply of condos is a "OMG" market. An OMG market is like noticing that the gas light in your car is on, but the needle isn't quite straddling E. Any decent condo in an OMG market is sure to get multiple offers, but buyers in OMG markets have hope. It might be hope like Big Papi coming up in the bottom of the ninth with the Sox down by three, but it's hope.
A WTF market, however, is a completely different beast altogether. That's survival mode. It's more than outwitting, outplaying, and outlasting the competition. It's mano-a-mano, block-to-block, take-this-beach type of fighting. It's forget about the value, my offer will be whatever it takes to win… $10K over-ask, $50K over-ask, more? Whatever it takes!
The city of Boston is one of the largest condo markets in the country and it's in OMG mode. In January, the City of Champions was just a few condo sales shy (pending, not closed) of what it had for inventory on Jan. 1 (363 available, 304 under agreement = 1.19-month supply). Ditto February (407 available, 358 under agreement = 1.14-month supply). In other words, during the winter that wouldn't quit, the entire city had barely a one-month supply of condos. Incredible!
In the nine markets I cover most, however, the majority are in WTF land. For example, Somerville had only 19 condos available to buy on Jan. 1, but somehow managed to put 29 under agreement in January. On Feb. 1, Somerville had 20 condos available to buy and put 32 under agreement during the month. Amazing! Brookline, Cambridge, Charlestown, Jamaica Plain and the South End were also blazing WTF paces in January and February.
So we're all cold today, but apparently even a brutal winter can't cool down the Hub's red-hot condo market.
· Our Bates By the Numbers archive [Curbed Boston]