I bring good tidings! Cambridge remains a healthy market despite what you have been reading and hearing in the news about market slowdown. The market has been unusual in the last, though, probably the most unusual market I’ve seen in my 30-ish years of working in this interesting business.
During the last 5 very hot real estate years, there have been no “undesirable” parts of Cambridge; properties were selling with multiple offers everywhere. As always, Harvard Square was/is prime, with pent-up demand for full-service buildings on Memorial Drive and Mt. Auburn Street. When condominiums or apts at 1010 Memorial Drive, a co-op building, do come on the market, there are multiple offers and the residences tend to sell for hundreds of thousands over the asking price, unless the price was exceedingly high to begin. Rarity of product; a desire/need for a more carefree lifestyle; fewer/no stairs, and the knowledge that the market is still-rising is the rationale behind these very high offers.
Single-family houses are very much in demand, as more buyers are attracted to Cambridge. Cantabrigians are opting to stay here with their families vs moving to the suburbs because of their preference for a more urban lifestyle and without the long suburban commutes. Single fams comprise the smallest segment of housing product in the City and, again, depending on the location, some sell for hundreds of thousands over asking and even a million plus over asking. If buyers can afford to buy a bigger house in Cambridge; want their children to have a public school education or their child/children are already settled in a private school, Cambridge happily remains their home rather than a house in the suburbs—unless a big yard is a must.
Two-unit buildings on prime streets for owner occupants have sold extremely well, too. However, for developers and investors, the numbers don’t work. There are 9 multi’s scattered around the City now, sitting on the market, mostly because the prices are too high (plus 2 new ones on the mkt this wk).
Buying properties in trusts is not new—it was a must when Cambridge had the un-American ordinanced units. For high-end buyers especially concerned about privacy, a new tack has been added to the trust to keep personal information private: The true selling price of a property sold off-market is not being disclosed. The City is working to counteract this relatively recent activity, as it poses a dilemma for the City with tax assessments and the information is meant to be public record.
There is so much money in Cambridge. A number of houses this year which were sold off-market, with true prices unrecorded, have sold for millions over their value. With no solid confirmation of price, one house on Sparks is rumored to have sold for $18m-$20M and several on Appleton for $10m and more.
Townhouses are a very desirable commodity and for good reasons: private entry; no one walking overhead; not having to tolerate others’ personal belongings in the common areas; private outdoor space; parking—all for a lot less money than a single family house. TH developments are being built and successfully sold all around the City.
So many rental buildings have been constructed during the last 1-2 years, and developers continue to build them. Banks are more willing to lend money on apt buildings than condominiums. With the continued success of Kendall Square/East Cambridge and ever-increasing employment, developers hope to attract these professionals, most of whom prefer to rent vs buy because of their preference for mobility. 221 rental apts. are on the market now in MLS (Multiple Listing Service) and some flats never go into MLS, so the number is even greater. Except for the apt. buildings near MIT/Kendall, most of the newer bldgs are not in prime locations; but the goodies landlords offer—free rent; no rental commission; free wifi; big entertainment room with bar; exercise facilities; all new—make tenants willing to compromise on location. Of course, some of these renters would like to buy, but because of Cambridge prices—and now Somerville, Arlington and West Medford prices as well—they need to wait and save or get parental assistance. The new tax laws make buying less desirable than it was, but rents still are high to offset that and landlords are opting for vacancies rather than lowering rents.
For the past 2 years, some buyers have been exhibiting resistance to multiple offers, and we’ve been seeing more of it since the 2018 Spring market—understandable, given the increase in prices; the pressure of making quick decisions on something as important as one’s home; simply not wanting to waste the time making an offer, only to receive the dreaded phone call, over and over, that one’s offer wasn’t accepted. As a seller’s agent, I so dislike making calls to agents to tell them their buyer’s offer wasn’t accepted. When I represent a buyer and my client’s offer wasn’t accepted, giving the bad news is worse. Some buyers have become burned out and have dropped out of the market or moved to more affordable areas.
Buyers buy lifestyle; they watch HGTV; they buy house design magazines. Too many properties on the market are not up to snuff for today’s buyers. Buyers won’t visit properties they consider overpriced and they won’t step up to the plate and get involved in a multiple offer situation unless the property is special; that they really want it. It’s surprising, though, how many calls I get from agents after a property’s deadline to see if an offer was accepted, another indication of buyers wanting to buy but not wanting to be engaged in a multiple-offer situation.
Whereas buyers were competing for any property at any price, now some properties are sitting on the market; there have been price reductions; and some have been withdrawn from the market—all unheard of in the past 5 years. Buyers aren’t stupid; they have so much data at their fingertips. It’s incumbent upon the lister to be sure the properties we represent show as well as possible and that the pricing is on target.
A few other important components have contributed to the market change besides high prices and multiple offer resistance: interest rate hikes; restrictive changes in China’s currency laws; relaxed City regs to permit more expansion of a homeowner’s property so some owners don’t need to move for more space. More properties came on the market last October, November and December, when buyers are fewest, than I ever can remember. Supply exceeded demand—unique for Cambridge—and a lot of that supply was overpriced and substandard; ergo, the housing didn’t sell with deadlines and some listings were canceled.
One other aspect which affects the salability of a property is the quality of the listing agent and the effort put forth with prepping the property and doing standout marketing. The days of just hanging a sign in front of an unprepared listing and expecting instant success have past, I think. Now, too, so many agents are working in Cambridge with so little knowledge and who are so unwilling to expend any effort. I am appalled when I visit some open houses, where the agents are as casually dressed as if they were watching a football game at home, and they don’t even bother to open window shades to let light into a room.
Condominiums comprise the largest segment of the Cambridge market, so there are more condominiums on the market at any given time than any other style of property. Despite some resistance to multiple offers, we continue to have deadlines for offers. If the property was priced low and had a special quality, there could be 6+ offers; priced where it should be, 1-4, depending on how special the property was. For very special properties and offers quite similar, we’re still having second rounds. The lowest amount offered will be the asking price. If a buyer falls in love with a property, like the buyer did for Unit 406 at 10 Dana, a darling 4th floor walkup duplex with 1,045 sf, the asking price was $698K and it sold for $850K. As mentioned earlier, condominiums in full-service buildings are a totally different situation, with buyers paying hundreds of thousands over asking unless the price was at the roof line already.
So, the Cambridge market has been the most unpredictable I’ve seen: Off-market singles have sold at unprecedented prices. Almost all on-market singles have sold, some at unprecedented prices; a few in areas where prices exceeded the quality of the location, they have been withdrawn from the market. Most multi’s have stagnated because of their price and condition. Unrenovated condominiums in full-service bldgs. have sold for hundreds of thousands over, while unrenovated condominiums have languished, with some withdrawn from the market. In the prior 5 years, everything sold everywhere.
I expect the Spring market to be a good one but not necessarily a wild one. Prices will continue to go up. Not much has come on the market yet, but a condominium in an elevator bldg on Ellery last week for $719,999—renovated; dark; low ceilings; 1/3d of the parking space was blocked—had 6 offers. The Compass lister of a lovely top floor condominium on Cottage Street, priced at $1.1m, with parking but no outside space, received 5 offers. The townhouse in Cambridge near Davis Square I’ll be bringing on next weekend should do well. There are lots of buyers in the market and the new inventory is low. If you’re considering selling, now is a good time.
Attached are some interesting charts (stats are stats but are not the “true” picture, which I have tried to portray, especially with the singles, which shows a decrease ). Please keep in mind that the figures don’t reflect off-market sales; just those in the Multiple listing Service. I’ve included some memorial quotes, too, from BostonVoyager.com—a good way to start the year. Call/email/text me for details re the charts.
Thank you for being my loyal clients and for referring me to your friends and family, which I so very much appreciate. Do stop by to say hi at our street-level office in the blue bldg where Bowl and Board used to be. Compass has rented additional office space across the street at 1100 Mass. Ave., but I opted to remain at 1073. I love to see city life and to have you stop in to say hi or wave as you walk by.