I recently received this question from a buyer client. In fact, I get this question all the time. But in this particular case, my client was struggling to find a Back Bay condo that matched what she was looking for. She was disappointed because the Boston condo market did not meet her expectations. Expectations, as set by what you may read in the news, or see on TV, can be a large factor in the eventual success of your real estate search. So it’s important to get a true understanding of the market.
The key factor to note is that market trends are very localized. What is true for Los Angeles may not be true for Boston. The market trends also differ greatly from the city of Boston to the Suburbs and even from neighborhood to neighborhood! TV and print news simply don’t have the time or space to go into detail about the intricacies of many sub-markets, so they generally paint the real estate market in one broad stroke. Understandable, but not helpful for most buyers and sellers.
Getting back to my client…..what type of condo was she looking for that she couldn’t find?
- 1 Bedroom condo in the Back Bay
- 450+ square feet
- a separate bedroom (or space to build one)
- sunlight
- budget up to $400,000.
Now based on her search….is it really a buyer’s market?
Well there were plenty of Boston condos on the market that met the criteria minus one item—sunlight! If you read PT’s post about The Unchangeables you will understand why this is a very important criteria item. As an example, let’s take a look at the condos that have sold over the last 6 months basically fitting her criteria. There were 21 Back Bay condos (that were not basement level) that sold between $210,000 and $430,000 with an average size of 578 square feet. The average list price was $364,562 and the average sale price was $351,010— Less than a 4% discount! Average days on market of 105. If you look closer you will note that 15 of these listings actually sold in 79 days or less.
And that says nothing of the fact that she really wanted one with great sunlight which narrowed down her list of potentials even more. So with a short list of potential Boston condos to choose from and strong market activity…..
…..is it really a Buyer’s Market?
As another example in the same Back Bay condo market, there are currently 185 Active Listings on the market for sale and there have been 251 condos sold in the Back Bay over the past 6 months. That’s equivalent to only about 4.5 months of inventory on market and indicates a fairly robust market (most experts would say 6-8 months of inventory indicates a balanced market, more than that a buyer’s market, and less a seller’s market).
This classical definition would actually say the Back Bay condo market is currently a Seller’s Market! What?!? Hard to believe, but true. And frankly, a simple indicator like months of inventory cannot possibly come close to explaining the whole picture of the real estate market. But, in Boston, especially in the downtown neighborhoods, it would be very hard to define the market as a buyer’s market.
A Sampling of Back Bay Condos
To give you a better idea of the current inventory in the Back Bay, have a look at this sample of the 5 newest listings for Back Bay condos.
A Happy Ending
The good news is that my client is currently under agreement on a condo in the Back Bay that did meet all her criteria! And she is extremely happy that her search was made easier once I helped her better understand the market that she was looking at. And that really is the key. If you’re looking for a Boston condo (or a home anywhere), you have to look at what the market is doing in your particular segment. My job as a Buyer’s Agent is to help you understand that the search process is not as easy as it may seem and that the real estate market can vary considerably from place to place. But with good guidance, you can make your home search efficient and pleasant and find your perfect fit. If you’d like to talk about your home search and see if there’s a fit between your needs and my service, just let me know.
