Condo inventory rises, and developers get creative
The uptick in listing activity and the completion of construction projects, coupled with steady mortgage rates, suggest a promising shift is underway in the Massachusetts real estate market, according to the Massachusetts Association of Realtors (MAR) January housing statistics report released Feb. 20.
New listings in January increased 78.9% from December. That’s a good thing as available inventory still struggles to keep up with buyer demand.
Mortgage rates also dropped nationally last month from their peak. Combined with the housing supply shortage, home values are also benefiting, as existing home prices rose 4.4% from last year.
“Low inventory and affordability continue to challenge many buyers, but we’re beginning to see an increase in listing activity, construction completions and stabilizing mortgage rates helping to drive a positive shift in the market,” said Amy Wallick, 2024 president of MAR and Realtor at Lamacchia Realty. “With this slow rise in inventory, we’re hopeful to see more buyers and sellers emerge in the coming months.”
Last month, the median sale price for a )single-family home in Massachusetts increased 9.6% from January 2023 to $570,000, while new, single-family home listings increased by 5.1%.
There was good news in the condo market last month as well as the median condominium price also increased from last year, up 4.5% to $520,000. Condo listings also fell last month, down 7.8% from a year ago.
The report also found that year over year, single-family closed sales fell 2.5% from 2023, while closed condo sales dropped 22.7%.
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The Globe’s Kimberly Blanton is out with a story today about how developers are offering up incentives to boost sales, now that the market has cooled and condo inventory has risen.
Keep in mind, the story is about getting incentives from developers. Your average seller isn’t going to be so eager to negotiate, even now (which is why sales have slowed – buyers want lower prices, sellers want it all). Some of that’s logic – the developer has a pool of condos to sell, and has to get rid of a bunch, all at once, plus his necessary profit on the deal probably allows for some “slippage” in price.
I had a client who bought at Parris Landing, one of the properties mentioned in the article. He was able to get a year’s worth of condo fees paid by the developer, plus some other nice incentives rolled into the package. Parris Landing was also offering a $3,000 broker incentive. I had a problem with that, because it puts a buyer’s agent in a tough position – am I giving my client the best advice if I’m getting a little money on the side? – so I gifted $2,000 back to my buyer (and kept a $1,000 for myself (hey, I gotta make a living)), and we were both happy.
Buyers these days should certainly push for lower prices, or at least some major upgrades in the finishes in any new construction.
(Oh, in the article, one buyer ends up buying two units at 15 Beacon, instead of one, because the developer slashed $30,000 from the purchase price of a second unit. Here’s the deal – you do the same sort of thing at any development in town (preferably $1 million+), and I’ll slash 50% off my 2nd commission, okay?)
Complete article: Developers throw in extras to seal condo deals: Cash incentives, fee waivers offered – By Kimberly Blanton, The Boston Globe
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