A quick analysis of condominiums currently under agreement in East Cambridge could reveal a remarkable weakness in the housing market. The Real Estate Cafe prepared the market snapshot below to substantiate a comment we made earlier in the week in Boston.com’s blog, Real Estate Now:
“Wouldn’t other readers agree that the aggregate statistics [included in the original Boston.com blog post] need to be deconstructed further to (1) reveal “soft parts” in the housing market, by location or product / price range; and (2) provide actionable insight to potential buyers on specific properties, or on timing the market?”
Here’s an example from a market analysis done for a current client: Eleven condos are currently under agreement in East Cambridge, Massachusetts. Of those, nine listed tax assessments in the MLS; and of those, four asking prices were reduced below their assessed value BEFORE the units went under agreement (ie. to attract buyers willing to make an acceptable offer). When final sales prices are revealed AFTER closing, my guess is that seven of the nine units will be sold below their tax assessment —that’s an amazing 78%! And that’s for properties being sold through the MLS which means “retail” pricing; distressed properties sold outside the MLS are MORE likely to sell below their tax assessment and are not included in our market snapshot!
Could that mean that data will soon reveal that approximately 90% of condos in East Cambridge are selling below their assessed value? What kind of price reductions would be available if mortgage rates weren’t at record lows for the seventh week in a row and tax credits had not propped up the housing market over the past year?
How will trends this Fall compare to the research The Real Estate Cafe did in 2006, that resulted in this feature story in the Boston Globe, when many denied that the housing market had peaked? Don’t the findings then look tame by comparison to pending condo sales in East Cambridge?
An analysis of Newton home sales showed 16.5 percent of homes sold below assessment between January and June, up from 10 percent the prior two years.
Commercial pitch: Preparing an offer this weekend? Got a market snapshot you’d like us to prepare? If so, we’ll cut our hourly fee of $150 (without a retainer) in half to encourage you to sample two to three hours of our moneysaving, fee-for-service business model (see article in Wall Street Journal about our 100% commission rebate).