Look at Homes Priced Higher Than You Can Afford in Brookline and Newton

My fellow real estate agents will hate me for this post, more the reason you, my non-agent friend, must read it.

Are you looking to buy a home? What’s your price range?

Whatever your price range, look at homes priced up to 10% higher! You can find a home you love at a great price. This strategy works if you have time, patience, persistence and an agent who is not shy about negotiating.

This is not a suggestion simply based on a few anecdotal stories, but statistics. Looking at the ratio of sale price to list price (SP:LP), you learn the final sale price of a house compared to the asking price. This ratio was 95% in Brookline and 96% in Newton in 2011. But there is a ratio I like even better: sale price to the original asking price (SP:OP) . From this number you learn the final sale price as a percent of the asking price before it was reduced. This number is obviously lower, at 91% in Brookline, 93% in Newton.

On average, a houses in Brookline in 2011 sold for 9% LESS than their original asking price, and 5% LESS than the final asking price. For example, a house went on market for $1,650,000. Over time, the price was reduced to $1,580,500, and finally sold for $1,501,500. A buyer who can pay up to $1.5 could have seen this house, waited 125 days (average market time in Brookline in 2011), and bought it.

This means the house was overpriced. Not all the houses will be overpriced when put on the market at $1,650,000. These days, they may even sell for over asking. But on average, if the house prices in Brookline in 2011 sold for 9% less than the original asking, you should be looking at homes priced higher than you can afford.

Please have your agent check the SP:LP and SP:OP ratios for your area and neighborhood. We can search it by zip codes, price ranges, types of homes, etc. Adjust your search criteria accordingly. Note that usually the higher the price range, the lower the ratio (larger price differential).

Buy bravely!

The Newton and Brookline Market Downturn

My friend was telling me how the market downturn was an opportunity to find a bigger home in Brookline. Unfortunately, she didn’t find the home she wanted. (She wasn’t my client).

Yes, the market took a turn. Everyone in the country knows about our real estate downturn. But in Brookline and Newton, this downturn disappointed many hopeful buyers.

While Massachusetts real estate numbers are showing us in a continued slump, Newton and Brookline have proved remarkably resilient. I’m looking at the Multiple Listing Service statistics for the years 2007-2011. In Brookline, the downturn single family house prices dipped from their 2007 peak of $1.43 million to the low of $1.32 million in 2009. In 2011 the average Brookline house price was back up to $1.41 million.

Condos, on the other hand, experienced a price hike. On average, a condo in Brookline cost $503,600 in 2007, and in 2011 the price was up to $562,100. This is approximately at 12% increase in condo prices and a leveled single family market.

In Newton, the numbers for a single family are different but point to a similar trend. In 2007, the average Newton house cost $936,100, dipped all the way to $842,100 in 2009 and in 2011 went back up to $908,900. The volume is still lower, 617 houses sold in 2007 versus 518 sold in 2011. But this Spring’s market has been extremely busy, and multiple offers are common. Sorry, buyers. Hooray sellers.

Digging a bit deeper, though, you find some interesting details. The hottest segment of the single family homes in the Newton market is those in price ranges lower than the average price. While the larger homes take longer to sell, and go through more price reductions and negotiations, the smaller homes are selling fairly quickly.

These numbers tell me this is a great time for a move-up. If you are both buying and selling in Brookline or Newton, don’t feel you missed the boat for an upgrade. At least request an updated market analysis on your home.

A market analysis is a free service most Brookline and Newton real estate agents provide. I recommend you get a couple of opinions. Zillow doesn’t count!!!