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Hub Condo Buyers Paying More as Condo Pool Shrinks

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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 and people you would not otherwise notice. Follow him on Twitter and check out his ebook, CONTEXT 2015: 14 Hub Condo Markets

Over-ask offers this spring are already more prevalent than pollen.

In the nine Hub markets* I surveyed, total condominium sales were down compared to last April, (250 vs. 290), but the percentage of sales bringing in an over-ask offer was up (60 percent versus 54 percent). Additionally, despite 40 fewer sales (-14 percent), these markets produced more extreme over-ask sales this April than last April, a sign that the buyer pool is more willing to bid aggressively to acquire their condominium of choice.

In the nine markets, 85 April sellers cashed in offers that were at least $25,000 more than their asking price, a 20 percent increase compared with the same time period a year ago, when only 70 sales went $25,000 over ask. As well, 15 percent more sellers went to an April closing table with offers that were $50,000 more than ask, up from 11 percent last April.

The seesaw, with falling sales on one side and an increasing number of over-asks on the other, was most apparent in Somerville. There, April condo sales were nearly halved (46 to 24) compared with a year ago, but also a market where the percentage of sales that went at least $25,000 over-ask nearly doubled, going from 30 percent of total sales in April 2014 to an incredible 58 percent this April. Ditto the rate of Somerville sales that garnered offers at least $50K over ask: only 11 percent in April 2014, but 25 percent this April. Also of note, two Somerville deals went $100,000 over ask this April.

In Cambridge, the Hub's craziest over-ask market, April sales dropped 40 percent, but three out of every four Cambridge deals went for over asking (75 percent versus 68 percent last April); and every other Cambridge condo sale secured offers at least $50,000 over asking (50 percent versus 45 percent last April).

Perhaps more surprising than what the New England weather is planning might be what it took to buy a condo in South Boston this past April. Despite being one of the few Hub condo markets where April condo sales increased (45 compared to 38), and having a long history of very sober offers, it appears that would-be South Boston buyers have finally gone off the deep end of the offer pool. Last April, only 5 percent of South Boston properties closed more than $25,000 over-ask, but this April 25 percent of Southie condo sales reached that threshold, a five-fold increase. And 4 percent of South Boston buyers paid $50,000 more than the asking.
· Our Bates By the Numbers archive [Curbed Boston]
* Back Bay, Beacon Hill, Brookline, Cambridge, Charlestown, Jamaica Plain, the South End, South Boston, Somerville