It's hard to make sense of the current market. REALLY hard. I keep reading things in the news about home sale prices going down, more price reductions than ever, etc., etc. And in some cases when these statements are made on a national or even state-wide level, the data may actually bear out in a statistically significant way. But when I look at what's happening in Cambridge and Somerville it's nearly impossible to make any sweeping statements.
For example, if we look at the 697 condos that have listed in Cambridge YTD, 153 of these -- 22% -- have had some sort of price adjustment. And if that sounds like a lot, note that last year the number was 25%, and in 2021 --while we were still in the thick of the COVID real estate frenzy-- it was 20%. So we're right there in the middle. Also, of the 75 condos that listed below $450k, NONE had price reductions, whereas 4 of the 7 condos that listed at/above $4M had at least one price reduction. So you can see where the data can get skewed.
Looking at Somerville, of the 537 condos that have listed YTD, 37% have had price adjustments. Obviously, this is quite a bit higher than in Cambridge, which actually makes sense because Cambridge tends to be a bit more resilient to market fluctuations. Though again, this data may not tell a complete story. I didn't have time to get this granular in my analysis today, but historically the more central areas of Somerville --Davis, Union and the Somerville sides of Inman and Porter-- have fared better than some of the more peripheral neighborhoods like East Somerville, Ten Hills and the part of Winter Hill north of Broadway. I'm guessing if we did a deeper dive we would see that playing out now.
In Somerville, we also experienced a similar variation to Cambridge in price adjustments by price point, with NONE for any of the 6 units that listed under $450, and 94 of the 221 condos priced at $1M+ (43%) having price adjustments. (If you're curious about why Somerville only had six units listed under $450 compared to Cambridge's 75, it's because Cambridge has more older, large buildings with one-bed units that fall into this price range.)
So. I could go through a similar exercise with single-family homes and multis, but hopefully you get the picture, which is that it is very hard to make generalizations about the current market. Other than to say that it is weird, unpredictable, and really nobody likes it right now -- buyers are dealing with higher rates that we've all been used to for the last decade+, there are very few homes on the market to even look at, much less offer on, homeowners are feeling stuck, unwilling to give up their existing low interest rates, even if they need more space, want to downsize, change to a new school system, etc., and agents are generally working harder with less to show for it. Alas.
Anecdotally, here are a few tidbits I can share -- based merely on my own observation and experiences this year:
The "market" is very different from property to property. I have had buyers score great deals on properties that have been sitting for weeks/months, and I have had buyers competing in multiple-offer scenarios with five, ten, even 25 offers
Homes that are move-in ready, well-staged and marketed are selling faster than homes that need work or do not present well.
Opportunities for buyers are out there -- for those willing to look beyond the "new and shiny," there are still some good value homes to be had.
One final thing I have to get off my chest and I'm taking it out of the anecdotal bullets because I do have some actual data here. Plus a very strong opinion, which is...
Developers are making too many oversized, super-deluxe Somerville condos. This year alone there have been 95 units listed with 3+ beds, 3+ baths, 1500+ SF (six of these over 3000 SF), that listed between $1.1 and $1.85M. 34 of them are still available. Does this qualify as a glut? I'd say so... I wish they'd go back to building solid, 2-3 bed, 2-bath units that buyers can afford, without all the bells and whistles they don't need and in many cases, don't even want. There. I'll get off my soapbox now...