Is Boston’s Housing Market Starting to Thaw? (Feb. Insider Report)

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The Boston area housing market still seems to be suffering from the effects of the violent winter storms and the absence of 2010′s first time home buyer tax credit. All sales numbers are down compared to this time last year while inventory continues to climb, especially in the key metropolitan areas. Put simply, buyers have not been motivated to stir from their dens so far in 2011.

Inventory Begins to Thaw

City Compared to January 2011

Compared to February 2010
Single Family Houses
Boston +13.7% +4.5%
Condos
Boston +18.8% -5.8%
Cambridge +18.8% +6.6%
Somerville +26.9% -0.6%
Brookline +45.7% -2.9%

Change in # of Houses for Sale on February 28th 2011

The sun is coming out, and so are the sellers. Inventory has increased year-over-year as well as month-over-month. It looks like we’ll have a bumper crop of homes on the market for spring, but will the buyers show up to reap the harvest? It’s too early to tell. But the February data shows sales declining as inventory rises.

But enough cold, hard numbers. What are Redfin agents seeing on the ground?

Sales Almost Done Sliding?

Redfin agent Sean Valiton says the winter blues haven’t slowed his motivated clients, who have plowed (uphill, both ways) through the weather to find good deals despite the chilly air and chillier economy. When the good deals do poke their heads out of the snow, buyers are ready to pounce: “Within the last week we have seen many multiple bid transactions,” reports Sean. “One just yesterday in Medford went for well over asking price, with nine offers.”

City Compared
to Jan. ’11
Compared
to Jan. ’11
Adjusted for
# Weekdays
Compared
to Feb. ’10
Compared
to Feb. ’10
Adjusted for
# Weekdays
Single Family Houses
Boston -43.2% -40.4% -44.7% -44.7%
Condos
Boston -25.7% -22.0% -39.3% -39.3%
Cambridge -33.3% -30.0% -53.2% -53.2%
Somerville -12.5% -8.1% -36.4% -36.4%
Brookline 0.0% +5.0% -35.3% -35.3%

Change in # of Houses That Sold in February 2011

Rear-looking trends suggest a glacial glut of inventory, but that sound you hear may just be a little pent-up demand bubbling beneath the surface. Homes near the city that are well-kept and well-priced get snapped up faster than mugs of cocoa after a snowball fight.

“We’re all hoping that more inventory continues to come into the marketplace,” says Sean. “Multiple bid situations are stressful and discouraging for everybody but the sellers.”

Stone-Cold Buyers Drive Prices

City Median Price in
February 2011
Median $/SqFt Change
since January 2011
Median $/SqFt Change
since February 2010
Single Family Houses
Boston $342,475 -14.0% -10.2%
Condos
Boston $393,000 +19.5% +18.8%
Cambridge $383,000 -18.1% -8.3%
Somerville $356,000 -0.3% -27.1%
Brookline $430,000 +4.1% +7.0%

Change in Median Price of Houses That Sold in February 2011

The Boston area condo market has its own unique climate to deal with. Lending requirements have eased a bit, making loans easier to secure for buyers. But with plenty of inventory on the market, buyers are in no rush. Buyers who stay stone-cold are winning out; sellers may give their initial offer a chilly reception, but eventually warm up when they realize that condos aren’t exactly selling like hotcakes.

Redfin agent Matt Zborezny says many of his condo clients have enjoyed shopping from such a large selection, especially when they have 20% to put down and are willing to hold out for a good deal: “Inventory will grow with the spring as expected, but I think some of these price corrections are going to make certain neighborhoods like South Boston attractive again to a larger audience. We’re already seeing an increase in activity in those areas. ”

Of course, like the saying goes, past performance is not an indicator of future results. We know what happened over the winter, but what does it mean for spring? All signs seem to be pointing towards a not-so-gentle decline in sales. But allowing for neighborhood-to-neighborhood differences in location, pricing and available properties, we still suspect some frenzied buying in the spring.

Our suggestion is always this: don’t get into a bidding war if you are not sure about the property. The early trickle of new properties always creates a frenzy. If you’re unsure, hold your ground and wait for the right property; that trickle of listings will only grow in the warmer months. That being said, if you find the “must have” property, do a careful comparative market analysis (CMA) with your agent and pull out the big guns if you can. Sometimes overpaying for the right property burns a lot less than losing your dream home.

Want to know what’s happening in your neighborhood? Download our comprehensive spreadsheet and dig into the data for yourself! Inside you’ll find county, city, and neighborhood information galore. To learn more about how we calculate these numbers, check out our methodology page. You can also liven up the place by posting a comment below.

Best,

Alex Coon
Boston Market Manager