Shortage of Inventory Drives Cambridge Market!
As of February 6th, 2000 the listing inventory for all Cambridge real estate firms was practically 1/2 compared to the same time of year in 1999. This low supply factor will likely continue to drive prices upward.
While many sellers have benefited from historically high selling prices. Low supply may in part be due to the inability of potential home sellers to trade up due to the higher cost of what they would like to buy. As a result, some sellers stay put and renovate rather than move. Additionally, the strong job market may be keeping Sellers here instead of relocating.
The recent volatility of the stock market and mortgage rates has not visibly affected the real estate market. Interest rates continue to hover around 8% for a 30 year fixed rate conforming mortgage with 2 points.
First time Buyers continue to buy, they say, because once they look at the cost of what is available to rent, purchasing gets them a much better deal for their monthly payment.
Some Buyers find Cambridge to be a relative bargain. Buyers who have been looking in other communities 'across the river' like Back Bay, Beacon Hill or the South End, say prices there have gone up so much, that they get more for their money in Cambridge.
Meanwhile, the Cambridge spill over has caused Somerville prices to rise. Condo prices of $300/sf have been reported in parts of Somerville with a condo in Davis Square renovated school building pending at $333/sf. A large loft project is nearing completion in a old church near Union Square with dramatic spaces selling in the $200s and $300s. A Davis Square loft project is asking $300 to $400/sf along the bike path and a 5800sf loft in a Davis Square church is asking $1.4 million.
In the 'high end' Cambridge market, homes that used to sell for $1 million, now sell for $2, $3 and sometimes close to $4 million. We've seen considerable developer speculation in this segment as homes needing work are quickly snapped up. Several newly renovated singles will come on the market this spring priced in the high $1 millions and up.
I welcome comments or feedback on this report and any information you may have about what drives the real estate market.
If you or a friend are considering selling or buying, and would like a Complimentary Market Analysis of the value of your home, or information about what's on the market to purchase, contact me at your earliest convenience at:
DeWolfe New England
617-864-8566, ext. 244