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.
Inventory
|
March. 2012
|
March. 2013
|
Difference
|
Newton single family
|
180
|
113
|
-37.22%
|
Newton condo
|
96
|
53
|
-44.79%
|
Brookline Single Family
|
57
|
61
|
7.02%
|
Brookline condo
|
146
|
59
|
-59.59%
|
Needham single Family
|
119
|
55
|
-53.78%
|
Needham condo
|
22
|
11
|
-50.00%
|
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.
|