Sell my house now or wait in Boston? Cassandra Cumberlander Remax Boston weighs in
September 26, 2013 1 Comment
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One of the reasons to hire a great real estate professional is to help you understand all of the various messages in the media about the housing market. If you are thinking about selling your home and listen to what the media says, you may come away confused. There are stories about how the real estate market is still too unstable and that, with the rapid rise in prices, we may be approaching another housing bubble. Some potential sellers believe that, since prices have appreciated in Boston throughout this year, the trend will continue next year, so they should wait to sell to get even more money for their home.
Yes, it is true that prices have risen, but they are not out of control. Prices have risen because inventory has been low-typically double-digit declines-so this is simple supply and demand. GBAR data shows that, in Mattapan for example, the amount of single family and condominium inventory is 50% lower than last year, at 4.1 and 2 months of inventory respectively. Dorchester is down 29%, at 4.3 and 3 months respectively. West Roxbury is down 56.3%, at 1.2 and 1.4 months respectively.
In markets like these, opportunity is created for sellers; when they put their homes on the market, the homes tend to sell quickly and often receive multiple offers. Looking at MLSPIN data on past month sales in the same communities mentioned above in the past month, Mattapan’s listings have been on market an average of 37 days with sellers receiving 98% of asking price, 34 days in Dorchester with 99% of asking price, and West Roxbury 38 days with 99% of asking price. And that’s just singles and condos-multifamily homes in these cities stayed on market between 6-20 days and received 100-111% of asking price.
Will this price appreciation continue? For a while, yes, but it is difficult to predict for exactly how long. Nationally, we seem to be at the early stages of a full housing recovery (NOT another bubble)-sales are up, prices have turned around to reasonable levels, and inventory is rising. Though pending home sales typically level off during the second half of the year, it’s part of the seasonality of real estate-don’t panic. Potential sellers need to keep in mind that, as we approach more normal levels of housing inventory (5-6 months), the price gains will level off. It is critical to watch this progression. And remember, if the price of your house appreciates 5%, then the price of the home that you’re looking to buy may also appreciate 5% (or maybe more, depending on that local market).
Another important consideration for sellers looking to move up or to downsize is the cost of waiting, which is different from the price you’d be able to sell your home for. Price appreciation is one thing, and if your next home purchase involves obtaining a mortgage, you have to keep an eye on what interest rates are doing as well. The slide below shows you how a price appreciation and an interest rate increase of .5% can affect your bottom line on the purchase of a $360,000 home.
Right now, there are no signs pointing to rates dropping. Below are the interest rate projections for Q3 2014 from the top 4 industry experts. Selling to buy a new home now-whether you are downsizing or moving up- could be to your advantage. Do the math and see for yourself.
As I always say, everyone’s situation is different, but these are just a few things that you need to consider as you decide whether or not selling now is a good decision for you and your family. Call me to align yourself with real estate professional who can help you keep an eye on these and other industry changes and advise you accordingly-781-269-9836.
Cassandra Cumberlander, Real Estate Advisor, Keller Williams Realty
Michael Mahoney - Greater Boston Realtor - 617-615-9435
Remax Boston Real Estate 
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