Linda Balliro, Broker Associate, Cambridge, Somerville & Greater Boston Real Estate
Just about every day people ask me: “So how long is this down real estate market going to last? Where’s the recovery?”
They’re surprised when I tell them that in some markets, the recovery is already under way. You can see this in Cambridge real estate and the surrounding towns. (Consumer attitude often lags behind local market data.)
You see, there were lots of market indicators as far back as 2005 that the bust was on its way. Despite the fact that inventory on the market was increasing, prices floated up well into 2007. But there came a point when the “market data came home to roost.”
And when it did, well... no need to rehash bad news.
In some markets (especially those where buyers have recognized the incredible values and low interest rates) we see several indicators which suggest rebounding market health: Shrinking inventory, multiple offers, and fewer days on market. This is especially true if you look at non-distressed properties.
If those indicators are in play, you’re not in a buyer’s market any more. It’s becoming a seller’s market.
In Cambridge, MA and the surrounding towns, we've seen just these indicators in 2011. Look at this review of condo sales in zip code 02141. In 2010 - sales were much lower - and the number of days it took to sell was much higher - but look at the price - the average sale price in 2010 was HIGHER. So, we can see that buyers started buying because they see a good deal - the lower prices are increasing demand.
If you studied Economics 101, you know what happens next: Increase in demand leads to decrease in supply - which leads to increase in prices.
We are at the beginning of a recovery. (I made the chart using MLS data).
Obviously, tight-fisted lenders and buyers facing shaky job prospects exert their influence on the market. People are wary, and that psychological uncertainty is a part of the pervading sense that “things are bad.” But if you have access to capital and stable income, now is no time to be holding back. We’re unlikely to see these buying conditions again for a long time.
Oh, and by the way: Don’t forget the relatively low amount of new construction during this time paired with the pending population boom in the U.S. over the next 40 years. Builders and developers are already picking up on this - construction for new apartment complexes is already on the rise.
Now is definitely the time to buy before the market moves up.
Is the recovery already underway in your neighborhood or neighborhoods you’re considering? Contact me to find out!
I can send you a free Market Report on your neighborhood or a neighborhood where you may want to buy. firstname.lastname@example.org. Tel 617-401-4048. www.ballirorealty.com