What's the market like for condos where the 5% down buyers are missing?

By
Real Estate Broker/Owner with Ginny Enbody Realty, llc

This year the spring market started late (it's usually good weather that jump-starts the market in January or early February) and from all indications will continue into the usual summer downtime between June 15 and Labor Day.  

The market in Cambridge and pockets of Boston and surrounding towns is good this year despite the national news.  Low inventory in certain price bands is driving many sales.

An interesting turn of events has occurred in the 5% first-time home buyer category.  Usually, the home of choice in this location for the single, first-time home buyer is a one-bedroom/one-bath condominium in desirable locations like Harvard Sq., Davis Sq. in Somerville, and the Back Bay, South End, North End, Beacon Hill and Waterfront in Boston.  If a buyer secures a home in those locations, it's hard to let it go when they move up because of its attractiveness as a rental investment.   The resulting low inventory causes intense competition.

Since the first of the year, however, tight credit restrictions have priced the 5% down home-buyer with excellent credit scores out of those locations and caused somewhat of a small condo glut.  The FHA has stepped in to service some of those buyers; yet that market still remains soft.  Maybe the glut will disappear when come the 1st of July Fannie Mae and Freddie Mac make some changes.  In the meantime, the home-seller if he or she truly wants to sell needs to adjust their price expectations or offer creative financing. 

All for now.  Tomorrow, I will offer my take on how burgeoning gas prices are causing people to reassess their living situation and ask themselves if they should pull up stakes to move closer to the job or public transportation.

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Rainer
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Ginny Enbody

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