Real estate is often in the news. Talking heads are sharing about how houses are appreciating or depreciating in value based upon national sales figures. However, real estate markets are not only NOT national, they are not just local either. They are hyper local. The Boston metroplex is not a national market. It is local to you and me here in Boston; but, the market can be vastly different in different areas of Boston!
Here is a chart of property data in and around Boston, comprising about 60 towns and neighbors:
|Locality||Available||Pending||Total||Sold - 7/31||Absorption||Mo Supply|
First, some vocabulary tips!
- Locality can be a town or neighborhood of Boston.
- Available means a property that no one has made an acceptable offer on.
- Pending means a property has an accepted offer but has not closed yet.
- Closed means money and title have transferred between seller and buyer.
- Total on the top line means all available and pending properties added together
- Sold - 7/31 means the total number of closed sales Jan 1 - Jul 31, 2019
- Absorption rate is the average number of sales per month between 1/1/19 and 7/31/19
- Months Supply is the number of months it might take for all the existing properties to sell**
** Months' supply of inventory does not take into account that new properties come on the market almost daily and that some sellers give up and take their homes off the market voluntarily! This means that the number of months of inventory is not a fixed fact but is a moving target!
Second, why is this chart important to you?
The bottom line is what you might find reported in the Boston Globe.
"There is a 4.2 supply of inventory in the Boston area as of today's news. Realtors say that a 0-3 months' supply
indicates a seller's market, a 3.1-6 months' supply indicates a balanced or neutral market, and 6.1+ months' supply
of inventory indicates a buyer's market. A seller's market means bidding wars and rising prices. A buyer's market
means falling prices. Boston is in a "neutral" market."
Such a story, although using real, accurate figures is "fake news!" Why? Because real estate is not just local, it is hyper local. Although it points to the truth that our seller's market has come to an end and we are eventually going to find ourselves in a buyer's market, this is just painting with a broad brush. If everyone in the Boston metroplex believes and acts as if we are in a neutral market, he will find some pleasant and not so pleasant surprises! Values and market timing are NOT the same from town to town or neighborhood to neighborhood. Look at Arlington or Belmont. Their supply of inventory is under 3 months each and so they are still enjoying a seller's market and might be surprised at how fast his property sells and for top dollar while places like Revere or South Boston ARE in a neutral market and it might take awhile to sell and maybe not for as much as the seller is hoping to get. On the other hand, if you look at Weston or Westwood, they are already deep into a buyer's market and are finding their properties sitting on the market, getting stale at the price they were hoping to get. They have to lower their prices if they want to sell sooner than waiting for the 10 months' supply to be finally absorbed.
Just so you know, hyper local does not simply indicate "confined to a town". In large towns, some parts sell better than others. Some price ranges sell better than others. Therefore, even in a town where you have, on average, a 4-months' supply of inventory, each price tier is likely different. One tier might sell in within a month. Another tier might not sell for a year!
If you'd like to know what market you are in specifically, please reach out to me and I will be glad to drop by and give you a hyper local estimate of value and time to sell.