Buyers Market? Or Are People Still Getting Into Bidding Wars?

I saw it last Fall during those endless afternoons when my kids and I were hanging out at the “Yellow Park” on Hanson Street in Somerville.

The park we were playing at is more officially known as Palmacci Park sits on the corner of Skehan and Hanson is one of the many neat things about this almost hidden, wonderful neighborhood. It’s just North of Beacon Street and runs between Park and Dane Streets. It’s like a little village. Unlike a lot of neighborhoods in Somerville, where there are ten different versions of the same house, all the houses are really different from one another. It’s full of teensey tiny streets barely wide enough for one car to squeeze through and houses that almost touch the sidewalks. Some of the houses are truly historic and others are brand new, but the neighborhood has a cohesive feel to it. The newer developments are easy to spot with their clean lines and landscaped lots, but they are they are in scale with the other houses around them.

Adjacent to the park at 44 Skehan Street was a triple decker, with a for sale sign badly in need of some TLC. It had shaggy asphalt shingles and there was grass growing up from the cracks in the driveway. But even from that distance, you could tell this house had decent bones. It was a traditional bow front Victorian with two bedroom apartments on each of its three floors. Then in November, the for sale sign went away. On a warm January day, I was at the park across the street again and the asphalt shingles were a memory. I did a little research and found out that the house had sold for $542,500 over $100,000 over it’s modest $424,000 asking price. Admittedly, it’s in one of the coolest neighborhoods in Somerville. But it needed a lot of work and I thought this was supposed to be a buyer’s market!

Was the low asking price a real estate agent’s strategy, or did the seller just get lucky?

  • jen c

    Margaret,
    I’ve noticed some fishy stuff lately where a house sits on the market for many months and when it does sell, it’s for well over the asking price. It seemed unlikely to me that a bidding war had taken place given some of these houses sitting for so long. And then I read this article http://www.rockymountainnews.com/news/2007/dec/20/incentives-distort-true-home-prices/
    Makes you wonder what’s really going on.
    –jen

  • http://boston.redfin.com/blog/author/margaret.sanford Margaret Sanford

    Ah yes! Thanks for pointing this out. There was a lot of sketchy stuff going on that was unearthed during the subprime loan scandal. Sellers would “donate” the down payment to a non profit who would gift it to the buyer. Then the mortgage would reflect the gifted down payment.

    Thanks for bringing this up!

    Margaret