Real estate market inventory in Boston suburbs (Somerville, Gloucester: houses, unemployment)

[Parsec]

Originally Posted by kaka83

Is this a kind of mini bubble in MA housing markets ?
Hope house prices get corrected soon.

I think what we're experiencing IS the correction and housing prices are where they should be (meaning housing prices were too low before). You already missed the housing slide from 2008-2011 if you wanted a good deal. This happens all the time whether it's with stocks or houses. People wait and wait and wait to buy, then realize they missed the boat. You can't time these things; just buy when you're ready.

[cwaggy]

North Shore is not the same as the rest of Eastern MA. We see high opening prices and then 'adjustments' downward. Agents are buying listings by telling sellers their houses are worth much more than they are. Trouble is as a savvy buyer, if you make a realistic offer when a place comes on, it will be refused, only to be followed by the home sitting for weeks and then the price is lowered.

[Parsec]

Originally Posted by cwaggy

North Shore is not the same as the rest of Eastern MA. We see high opening prices and then 'adjustments' downward. Agents are buying listings by telling sellers their houses are worth much more than they are. Trouble is as a savvy buyer, if you make a realistic offer when a place comes on, it will be refused, only to be followed by the home sitting for weeks and then the price is lowered.

As a buyer I hate it when that happens. We loved the very first house we saw when we started looking last year. It was listed for around $650k and I asked the seller (FSBO) if she would take $600k, knowing it was overpriced. She acknowledged it was overpriced, but wanted to sit on it. 6 months later it finally sold for around $580k. If the seller took our original offer it would've worked out for both of us, but NOPE. Some people just don't understand...

[MikePRU]

Originally Posted by Parsec

I think what we're experiencing IS the correction and housing prices are where they should be (meaning housing prices were too low before). You already missed the housing slide from 2008-2011 if you wanted a good deal. This happens all the time whether it's with stocks or houses. People wait and wait and wait to buy, then realize they missed the boat. You can't time these things; just buy when you're ready.

To some degree I would agree with that. The real estate market tends to run in cycles and the downturn we experienced was an abnormally long downtown. Of course, it was preceded by an abnormally long up swing. The current up swing can't last forever and it's rather steep. So, it's possible it might be short but there a number of economic factors that influence it which make such things impossible to predict with any accuracy.

Clearly though, there is a lot of pent up demand that is hitting the market right now and there's not enough homes for sale to satisfy it.

Originally Posted by cwaggy

North Shore is not the same as the rest of Eastern MA. We see high opening prices and then 'adjustments' downward. Agents are buying listings by telling sellers their houses are worth much more than they are. Trouble is as a savvy buyer, if you make a realistic offer when a place comes on, it will be refused, only to be followed by the home sitting for weeks and then the price is lowered.

That's not unique to the North Shore. Unfortunately, it's a common practice around the country. It's something I have to battle against every time I meet with a potential listing client.

Originally Posted by Parsec

As a buyer I hate it when that happens. We loved the very first house we saw when we started looking last year. It was listed for around $650k and I asked the seller (FSBO) if she would take $600k, knowing it was overpriced. She acknowledged it was overpriced, but wanted to sit on it. 6 months later it finally sold for around $580k. If the seller took our original offer it would've worked out for both of us, but NOPE. Some people just don't understand...

FSBO's are notorious for over pricing their homes. The beauty of hiring an agent is the emotional detachment. Not being emotionally invested in the house or the sale allows me to value the house accurately and negotiate effectively with potential buyers.

[3cents]

Originally Posted by Parsec

I think what we're experiencing IS the correction and housing prices are where they should be (meaning housing prices were too low before). You already missed the housing slide from 2008-2011 if you wanted a good deal. This happens all the time whether it's with stocks or houses. People wait and wait and wait to buy, then realize they missed the boat. You can't time these things; just buy when you're ready.

When I was house hunting last year spring, one of the places I looked was Lynnfield. At that time, I was amazed that houses there are still being sold slightly below listing, as compared to almost always significantly above listing in other towns such as Arlington, Lexington, Winchester, etc. Haven't updated myself with housing prices in Lynnfield for quite a while now. I wonder whether demand there has caught up.

I have a friend house hunting in desirable areas of CA, e.g. Los Gatos. He's saying that people are bidding 20+% above listing, on close to million dollar houses. Many of these are also all cash. Perhaps we in MA are fortunate after all?

[MikePRU]

Originally Posted by 3cents

When I was house hunting last year spring, one of the places I looked was Lynnfield. At that time, I was amazed that houses there are still being sold slightly below listing, as compared to almost always significantly above listing in other towns such as Arlington, Lexington, Winchester, etc. Haven't updated myself with housing prices in Lynnfield for quite a while now. I wonder whether demand there has caught up.

When real estate values were headed in the other direction a few years back the Globe had an article where they were theorizing about why some of the suburbs like Newton, Wellesley, Lexington, etc were maintaining their values while some other suburbs were crashing. They called their theory "a flight to quality." The author felt that people were trying to buy into the most sought after towns because they offered a lifestyle (short commute, good schools, shopping, etc) that appealed to the vast majority of people.

My theory is the reverse effect is now happening. People are being priced out of the most sought after towns and therefore are being forced to consider second tier towns. People who would have looked in those towns are now being pushed into third tier towns and so on and so forth. Several buyers I'm working with could have found a lovely house in Needham a couple of years ago at their price point but now are also looking in places like Westwood and Natick because of what they're currently seeing in their price range in Needham.

So basically, the longer this craziness lasts the further it should filter out.

[gf2020]

Originally Posted by cwaggy

North Shore is not the same as the rest of Eastern MA. We see high opening prices and then 'adjustments' downward. Agents are buying listings by telling sellers their houses are worth much more than they are. Trouble is as a savvy buyer, if you make a realistic offer when a place comes on, it will be refused, only to be followed by the home sitting for weeks and then the price is lowered.

I'm on the North Shore. Where are you seeing that happen? Certainly not in my town!

[kaka83]

Absolutely true MikePru. One example is our family.
We started looking at tier1.

All cash offers, bidding wars, saturday OH; offers will be reviewed on tuesday morning- All these craziness made us look into tier2 towns. But now we are pushed further to tier 3 towns. Right now tier 3 towns have crazy prices...which I feel is not worth of >550K houses.

I will continue renting and save cash for downpayment. Looking at how basepirces are climbing up, we have to increase downpayment amount which makes us more frustrated . I am focusing on 15-20% down.

[J1mbo01]

What do you consider a tier one, two, or three town? Is it geographical location, schools, or housing prices? I think that most people from here don't usually think in that way. I lived in West Somerville for 30 years.....a single family house in 02144 sometimes goes for over a million....does that make Somerville a tier 1 town? Whats the difference between Reading, Burlington, Bedford, Billerica?

[MikePRU]

Originally Posted by J1mbo01

What do you consider a tier one, two, or three town? Is it geographical location, schools, or housing prices? I think that most people from here don't usually think in that way. I lived in West Somerville for 30 years.....a single family house in 02144 sometimes goes for over a million....does that make Somerville a tier 1 town? Whats the difference between Reading, Burlington, Bedford, Billerica?

I was just using those terms for purposes of making the example. I could have just as easily said town A, town B, and town C. An "A" town or a "tier 1" town is just one that is sought after by a large percentage of the buyers. I wouldn't say the mere existence of $1M+ homes are a definite indicator of how sought after an area is. There are many towns that have at least a few homes that would have a market value at this level.