The Greater Boston housing market continues to struggle with an inventory crunch across the single-family, condominium, and multi-family markets. Fewer listings have meant fewer sales, with properties trading at higher prices.
The following observations on the first quarter of 2022 are based on MLS data for 150 communities in Greater Boston. Sellers of single-family homes were able to capture an average of 3% above their asking price in Q1.
Bidding wars were common in the most active price points in the market, which led to many properties trading for hundreds of thousands of dollars over asking price. For example, 30 homes that were priced in the $800,000 range closed for 12% to 55% above their listed price, leading to sales prices between $1 million and $1.3 million. Even with homes in the $2 million to $3 million range, buyers were, on average, willing to pay full asking price or above.
With record-breaking absorption rates persisting in both the single-family and condo markets, prices are highly unlikely to level off in the next quarter, despite rising interest rates. The biggest challenge agents have had this year is working with sellers who are “stuck.” These are homeowners who want to sell but aren’t listing their property because they can’t find a suitable home to buy in the current market.
There are solutions for this type of situation, such as making the sale of a home contingent upon the seller finding suitable housing or being able to rent the home back from the new owner after the closing. However, not every buyer wants to commit to a purchase with these terms. Agents are also encouraging some sellers in this situation to pre-market their home as a “coming soon” listing to expose the property to other would-be sellers who need to purchase a new home before listing their own.
As it’s been the case for many months, buyers in the Greater Boston, North Shore, and Metro West markets must be prepared, both financially and emotionally, to make strong offers on properties of interest and to jump on bidding opportunities quickly. That said, before making a “big” offer, buyers should keep in mind that the primary goal should not be to satisfy a temporary desire to “beat out” other buyers in this extremely competitive environment. Rather, it should be to make decisions that are truly best for themselves and their families over the long term.
To download the Compass Q1 2022 Market Report - Click here!
