Crazy times -- Fall market update
The last time I wrote a blog post of substance was back in March, just after we’d gone into lockdown mode for the coronavirus. At the time, I expected a very slow year in real estate – wow, was I wrong! Once we got over the initial shock of the situation and people figured out that they could – and would have to – put on a mask and get back out into the world, things picked right back up. And the spring market, which normally winds down end of May/early June, kept right on going into August.
If you’re not actively following real estate right now, you might be wondering who is out there buying and selling, and how can this be, with the economy where it is, small businesses closing left and right, and unemployment numbers in the double-digits. Well, here’s what I’ve been seeing…
Many people have been reevaluating their lives since COVID, including their homes and overall living situations. For some, there’s the obvious need for more space, with a lot of condo-dwellers feeling cramped and in need of an extra room for a home office, outdoor space for a bit of fresh air, or an actual yard for their kids to run around in. Then there are those who’ve decided they want to be closer to family – either just because their priorities are shifting and these relationships suddenly feel more precious, or frankly because they need help with childcare. Of course, there’s the shift to remote working, allowing people much more flexibility in terms of where they live, since they no longer have a commute to factor in. And there are investors deciding they no longer want to be landlords given the extremely high rental vacancy rate and their fear over some of the tenant protections being put in place.
One thing I think is overplayed is the whole “everyone is fleeing the cities due to fear of the virus” bit. Now, I can see where people might get that idea. The reality is that some people have been leaving Cambridge/Somerville and certainly Boston. But from what I’ve been seeing with my own clients, it’s not so much that they WANT to leave, as that they simply can’t find or afford what they want in terms of space – many of them are quite reluctantly leaving. And many aren’t leaving at all. Some are simply trading up to a larger condo or maybe even from a condo to a single family in the same city.
Now, my qualifier is that at the end of the day, there are a lot of people that for whatever reason, have been selling their homes in the cities and maybe not as many people looking to buy these homes. In Cambridge and Somerville this really hasn’t had a huge effect on the market, but from what I hear from my agent friends who work in Boston proper, it is not a great time to be a seller. (Note to would-be buyers: if you’ve been sitting on the sidelines not wanting to get into a crazy bidding war situation, this is a great time for you to potentially avoid all that…)
Personally, the coronavirus has made me love city living more than ever -- I am soooo missing the activity on the streets, being able to pop into a cafe or bar, or meeting up with friends for dinner INSIDE a restaurant. I get small moments of joy from seeing people eating out on the sidewalks where restaurants have spilled out to accommodate outdoor dining, the occasional band playing on the street, the signs in store windows reminding us to be safe and that "we're all in this together" -- to me, this is what living in a city is about -- being a community and being vibrant and enjoying life. But I digress...
As is always the case, everything varies property-to-property, so some homes in Boston, Cambridge/Somerville and other urban areas are still going to be seeing multiple offers and very quick sales over asking price. But unlike the trend in recent years, we just can’t assume that will be the general rule. Larger buildings are getting tougher because people feel more exposed to risk during the pandemic and, let’s face it, they are often paying pretty steep condo fees for amenities they can no longer use – fitness centers, swimming pools, community rooms, etc. Also, when the world outside no longer feels like your playground, having private outdoor space, even just a small balcony, has become increasingly in demand, so places without this feature are less appealing than they were pre-pandemic. So flip all that and what has still been doing well are single families, condos with private entries and/or in smaller, non-elevator buildings, with room for a home office and some sort of outdoor space – even if it’s just a small balcony.
But all of that is what we had been seeing through the summer. After a bit of a lull around Labor Day, the fall market has begun and once again I find myself in a position where I don’t really know what to expect. Right now, things are feeling a bit slow, and inventory is up over last year, with 392 active condo, single-family and multi-familly listings in Cambridge & Somerville today, compared to 283 this time last year. This means more options for buyers, especially for one-bedroom condos (69 available right now compared to 40 a year ago), many of which had been investment units and are now being sold off. GREAT time to be a newbie buyer looking for that starter condo…
The rest is yet to be seen – stay tuned for a year end update!