Dear Friends and Neighbors,
I'm celebrating my seventeenth year in Cambridge real estate sales and my thirty-first year in the Cambridge housing industry. Thank you for contributing to my success!
After a multi year run-up of prices, the Cambridge area real estate market has been slowing. Cambridge can't remain immune forever from the region's economic ills and the recent recession. However, while the number of sales (say per month) is 'slowing', and anecdotal evidence says prices are soft, some data indicates that average prices have continued to rise.
Part of this has to do with what Wellesley economist Carl 'Chip' Case calls 'sticky prices'. As demand slackens in a slow economy, prices don't just come down, as they would in say, the stock market. Seller's hold out. They don't always 'have' to sell. What's happening now is that inventory is building up--it's almost double that of a year ago. Properties take longer to sell.
Meanwhile, in spite of historically low interest rates--the lowest in 40 years --some buyers are still in a holding pattern. Some are waiting for prices to come down, although they may be disappointed. And the high unemployment rate in Massachusetts has stemmed the tide of incoming buyers.
All this leads to more supply and lessened demand. As Harvard economist Nicholas Retsinas said, Cambridge prices have more to do with supply and demand than anything else. The demand is still there--just not as strong right now. In addition to the draw of its universities, Cambridge is becoming a major Biotech hub. Novartis, the Swiss drug company giant, if leasing one million square feet in the Kendal Square area. Everybody wants to live in Cambridge! And as for supply, 'they're not making anymore land'.
The good news for Buyers is that there's more selection than ever and interest rates are absurdly low. What a great time to lock in a 30 year fixed conforming rate in the 5.25% range! Sellers, on the other hand, will need to be careful about pricing and positioning their properties.
This is not an easy time to make predictions--my crystal ball is foggy. Will lower demand and volume cause more price softening or even decline, or will Sellers 'wait it out'? Will Buyers move forward and take advantage of low rates, or continue to wait? Much depends on the market segment. While the high end has come down in price and is 'over supplied' and the middle range ($600k-$1 million) is slow, the entry level (now $300s to $500s) is still relatively strong. Exceptional or well-priced properties still sell quickly--but Sellers with 2002 expectations will have to adjust.
If this sounds totally incomprehensible, just give me call, and I'll see if I can confuse you even more. Actually, I'd be glad to consult with you on strategy, process, timing, the value of your home or the reality of finding your dream house.
This year will be the 5 th Anniversary of the Cambridge Housing Assistance Fund (CHAF)'s Benefit Concerts to open doors for the homeless. Nnenna Freelon, a five-time Grammy nominee will sing Gospel, Jazz, Rhythm and Blues at CHAF's October 3d concert. Nnenna is a Cambridge native and will make a live TV Special entitled "Coming Home" of her performance. If you'd like to help the homeless by making a donation, sponsoring, advertising, or in some other way, just call me at 617-864-8566 x244.
The transition from DeWolfe to Coldwell Banker continues to be a success. We are truly 'One Stop Shop', with Home Finding and Selling services, Buyer and Seller Representation, and Mortgage, Insurance, Moving and Relocation Services. The best resources of both companies have been combined to provide better than ever services to our customers and clients. We're not Number One, You Are!
If you are considering buying or selling , the time is now to start planning! I am always available if you would like an update on the value of your home, or if you would like a consultation on your real estate needs.
I look forward to hearing from you, whether to simply catch up, or to assist you with real estate.
MY NEW EMAIL ADDRESS: David.Pap@NEMoves.com