How 'Winter' Impacted the Early Spring Real Estate Market
(Photo via ThinkStock.)
The weather isn’t the only thing showing signs of an early spring (more like: “the winter that never was”). But perhaps the weather is in fact influencing buyer psychology around here because buyers are out in force, and there are not enough homes on the market to meet demand for median-priced homes in well-regarded towns.
I had a buyer client who made an offer this past weekend on a house priced at $699,000 in Lexington. This was the first week on the market. There were four offers. Their best and final offer was well over asking price. They came in third place.
This particular part of Lexington is a neighborhood of very homogenous house styles and sizes, and as such, easy-to-find comps. It’s an apple-to-apples comparison and will represent the first of these houses of this size in this neighborhood to go above $700,000 in two years — and the last one was an anomaly that looked so nice that it was featured in a design section of a magazine. This most recent one was a perfectly fine, well-maintained house in pretty serious need of updates in the kitchen, baths, and flooring area. There have been a few recent (past six months) sales in the same neighborhood, all under $699,000. If I were the listing agent, I would be a little worried about the bank appraisal, frankly. I’ve been in that position before.
A colleague in my office also brought on a house this past weekend in another part of Lexington. It was priced below $900,00o. More than 40 people came to the open houses and 10 brokers showed the house to clients over the course of the weekend. It has an accepted offer the first week.
Another house priced at $699,000 in town also came on the market this weekend and sold immediately. But this is February! I usually spend this time getting my tax materials in order, preparing for the spring market, and napping. No sleep for the weary.
Let’s look at Multiple Listing Service data from towns I’ve been showing to buyers during this time:
In the towns of Arlington, Belmont, Lexington, and Newton, 53 single-family homes priced between $500,000-$900,000 listed on or after January 1 of this year have gone under contract (listed in MLS as either “Under Agreement” or “red flagged,” i.e. having an accepted offer while continuing to show for back-up offers). Of those Under Agreement or closed sales, there was an average of only 15 days on the market. The red-flagged houses still getting shown for back-up offers continue to accumulate days on market until the status is changed to Under Agreement.
Some of these are houses that were taken off the market for the holidays and put back on right after the New Year. So, one of the houses under agreement in Lexington factors in with the actual accumulated 81 days on market. Omit that one, and the average falls to 13 days on market. Of all the towns combined, only 100 houses came on the market in total between January 1 and February 21. So, even when factoring in listings that came on in recent weeks, about half have accepted offers.
This is a pretty remarkable for the winter. I am calling my clients who were targeting spring to list their homes and seeing if they want to consider rushing it along a bit to beat a possible big uptick in competing inventory.