Years ago I used to do annual blog posts on the relative value of homes in our market year-over-year, but it's been a while since I've done this. I decided that now is the time for an update -- and given that my last published analysis was in 2019, we'll not only do a year-over-year assessment, but also look back at the value differences between now and pre-pandemic.
Following is a breakdown of the average sale prices (rounded to nearest thousand) of a few categories of homes sold YTD in 2024, compared to last year and 2019, in both Cambridge and Somerville.
My big caveat is that standing alone, data can paint an inaccurate picture. As you likely know, our market struggles with limited inventory, so we are working with fewer than 100 homes sold in each category (in most, fewer than 50). In some cases, this can really skew the data. I have called out a few scenarios below where we need to look under the hood to see what's really going on.
So here's the rundown on average home sale prices now v. last year v. 2019:
1-bedroom/1-bath condo with no parking
Cambridge
YTD 2024 -- $613,000 (40 units)
YTD 2023 -- $592,000 (41 units)
YTD through Aug 13, 2019 -- $549,000 (I didn't record unit numbers for my 2019 analysis)
Somerville
YTD 2024 -- $620,000 (16 units)
YTD 2023 -- $532,000 (5 units)
YTD through Aug 13, 2019 -- $472,000
As you can see, in Somerville, we had very few sales, due to the dearth of one-bedroom units in the city. Also, of this year's 16 units sold, seven were located in a newly-built Union Square condo building, where the sale prices started at $715k and went up to $899k, so those units are largely responsible for the $90k year-over-year price increase.
2-bedroom/1-bath with 1 parking space
Cambridge
YTD 2024 -- $872,000 (31 units)
YTD 2023 -- $895,000 (34 units)
YTD through Aug 13, 2019 -- $711,000
Somerville
YTD 2024 -- $782,000 (21 units)
YTD 2023 -- $712,000 (27 units)
YTD through Aug 13, 2019 -- $658,000
As you can see, there were fewer units sold in both Cambridge and Somerville this year, and oddly, the average sale price went down in Cambridge, which comes up again in the 3-bedroom units below. I don't think this is indicative of any real decrease in value.
One interesting note... I accidentally did my first search for this category mistakenly searching condos with 2-beds and parking BUT 2 full bathrooms instead of just one, and the prices were significantly higher -- in Cambridge for example, the average sale price YTD 2024 was close to $1.3M, compared to $872,000 with just one bath.
Now, is a second bathroom truly worth over $400k? Of course not. The price differential is likely attributable to the types of units that have two bathrooms instead of one -- typically they are either in larger buildings with more amenities or newer condo conversions where developers prioritize bathrooms in a way they didn't used to a couple decades ago. So in reality, the higher price tags are likely more a result of these units being in new or more newly-renovated buildings with more modern conveniences and/or amenities.
3-bedroom/1.5+bathroom with at least one parking space
Cambridge
YTD 2024 -- $1,624,000 (51 units)
YTD 2023 -- $1,633,000 (72 units)
YTD through Aug 13, 2019 -- $1,472,000
Somerville
YTD 2024 -- $1,238,000 (84 units)
YTD 2023 -- $1,169,000 (92 units)
YTD through Aug 13, 2019 -- $1,008,000
Note how many more units sold in this category of larger, more expensive condos compared to the smaller, less expensive one- and two-bedroom units. It is not because there is more demand; it is a supply-side issue -- this is what developers have been building.
Single families
Cambridge homes up to 2000 SF
YTD 2024 -- $1,467,000 (27 units)
YTD 2023 -- $1,444,000 (22 units)
YTD through Aug 13, 2019 -- $1,104,000
Cambridge homes larger than 2000 SF*
YTD 2024 -- $3,343,000 (45 units)
YTD 2023 -- $3,242,000 (41 units)
YTD through Aug 13, 2019 -- $3,134,000
*Note that this is the least useful category of data since larger Cambridge homes range from modest to mansion -- for example, YTD this year, the price points ranged from $1.3M to $10M.
Somerville homes up to 2000 SF
YTD 2024 -- $1,011,000 (38 units)
YTD 2023 -- $913,000 (30 units)
YTD through Aug 13, 2019 -- $811,000
Cambridge homes larger than 2000 SF
YTD 2024 -- $1,866,000 (25 units)
YTD 2023 -- $1,744,000 (19 units)
YTD through Aug 13, 2019 -- $1,283,000
So what's the takeaway from all this? Well, for one, we can see how much prices have risen in the last five years. We can also see that for the most part, the dismal real estate market that 2024 was has not resulted in falling prices. And, as usual, but maybe even more so this year, we can see that we need more homes on the market. While I don't necessarily see that happening this fall, my fingers are crossed that with the decreasing interest rates, once we get through the election, perhaps the spring will bring us a few more homes to go with the May flowers. My fingers are crossed!
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