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This past week I submitted four offers and none of them was accepted! All winning bids were much higher than the ‘market price’. Upon expressing my frustration in the office I found out that I’m not alone. So what is going on?!

Several factors affect the current market:

1.      1.  The inventory is at all times low. In Newton, Needham and Brookline it is half of what it was in 2012. The only exception is the single family houses in Brookline.

  2.       There is cheap money around: Interest rates are at all times low. The 30 years fixed rate is only 3.45%.

3.      3.  Alternatives are more expensive: Renting a home is more expensive this year.

4.     4.  Foreign Real Estate markets are higher: Many foreign nationals sell their assets abroad and use the cash to buy ‘cheaper’ assets in the U.S., i.e. markets spill-over effect.

5.     5.  Because interest rates are so low investors can’t find SAFE investments with good returns. Real estate is viewed by many as a solid investment with good returns (rent is up) in the long run.

 Looking at all these factors it looks like we are entering a bubble: Too much money with little inventory. What should you do?

Sellers: If you are thinking of selling your house- THIS IS THE TIME, DON’T THINK TWICE!

Buyers: This is indeed a tough market:

1.       Be patient.

2.       Think how much you want the specific house and how much it is worth for YOU.

3.       Be ready to act right away and come as strong as you can!

4.       If you unsure you are to stay at your new house for at least four to five years- don’t buy. Four to five years is the average time it takes for the cost of mortgage to break even with the cost of renting a house.

I hope you find this information helpful. If you have further questions contact me and I will be happy to expound.