Saturday, January 28, 2006

Prestige no protection from price drops

Inspired by Lowball! over at the Northern NJ Bubble and some reader suggestions, I put together a list of some recent sales that stand out for their price cuts. I don't have access to this info on a searchable database - I just went to Coldwell Banker, logged in, and searched MLS for recent sales in some prestigious Boston suburban towns. Plenty of homes are still selling for close to their list prices. But even in these desirable areas, sale prices are consistently below asking, and some much lower. I'm not able to access info on whether homes were relisted at lower prices before they sold, so the drops could be even more significant from original asking prices. Here are some recent standouts:

NEWTON , MA 02459
MLS# 70270545
Ask: $554,900
Sale: $450,000 (1/13/2006)
19% reduction

NEWTON , MA 02459
MLS# 70283827
Ask: $699,000
Sale: $625,000 (12/30/2005)
11% reduction

NEEDHAM , MA 02492
MLS# 70256995
Ask: $729,000
Sale: $655,000 (1/5/2006)
10% reduction

MLS# 70194581
Ask: $2,195,000
Sale: $1,730,000 (1/6/2006)
21% reduction

MLS# 70299424
Ask: $669,000
Sale: $600,000 (1/12/2006)
11.5% reduction

MLS# 70223416
Ask: $575,000
Sale: $450,000 (12/29/2005)
22% reduction

I'm not a big fan of anecdotal evidence, so I won't make too much out of this. But these numbers do emphasize that risk in this market is not restricted to less desirable neighborhoods. Most of these sellers no doubt made plenty when they sold, even at the reduced price. But if you moved in next to them last summer, they just set the new comps for your neighborhood.


rent to own said...

Anecdotal evidence can reinforce data, and in the case of housing, might be an earlier indicator.

YOY numbers can be skewed in one town by SFH v. Condo, the coming online of a new pricey development, etc.

In Andover I have given up my house hunt for another year and signed a lease in a new place that wasn't selling. Getting a great deal and preserving my options for a while.

Here the issue on pricing is about brackets- the sub-$600K market is competitive and the sub-$500K market more so. The sub-$400K market are all shacks.

We need about a 20%+ drop at all levels to make this town even partially reasonable.

Pinch a Penny said...

It is odd that places like these have about the same prices as the place I live in. I live in N. Attleboro, and that is about the range of pricing for houses around here.
I do not think that living in N. Attleboro is as glamorous as living in lexington, or wellesley... Why would I pay the same amount? I rent for about 25% of what I would pay in a mortgage for a similar place. I can save each month, and if I so wanted, go out to dinner.
Great job, and I will be visiting periodically, and contributing!

Ruined Invegas said...

Great blog. I've just posted a link to your blog on the website "best regional housing blogs".

rent to own said...


Yes, that is the queer thing. So Tewksbury is not as fancy as Andover, but try to find a decent house there for under $400K.

I just signed a lease to rent an unsold condo for half of what it would cost me to own it.

DT said...

Thanks for all the positive feedback.

also renting in ma: I agree that the lack of suitable housing for less than $400K is truly frustrating. Have you seen the recent Globe articles about the forces working against building "affordable" housing? Maybe I can put together a future post to discuss the problems and ideas.

pinch a penny: no question, renting makes a lot of sense for a lot of reasons right now.