How’s the Market? June, 2015
Prices of residential real estate in Newton and Brookline MA have gone off the charts!!
Where are we going with this?
I’m not an alarmist but I have to say that prices for real estate in Newton are getting way high. And I’ve been around for a while.
I recently was referred to a young couple in Newton who were looking to move to a bigger house with their children. I acted as their Buyers agent. An ideal property came on the market for $1.4M and (with my negotiating advice) they bid against 5 other buyers and eventually got the house for $1.55M. Then I acted as their listing agent and they put their house on the market for a fair price of $799,000. We got 7 offers, the lowest was $825,000. With another round of skillful negotiation assistance from me, the house sold for around $920,000. It’s almost like there are no limits. The same thing is happening with real estate in Brookline, Belmont, Weston, Wellesley and other towns.
In the past three years, real estate prices have gone up just like they did in 1998-2000, somewhere around 10% per year. That means prices double every 7 years. That’s a lot of inflation. The reason is not only excess demand and short supply, the reason is low interest rates. Money is so cheap that people are borrowing $1M and thinking nothing of the monthly payments of around $4,000 per month.
So I for one, will not be unhappy when rates start to go up and it takes the bloom of this rose on steroids.
But if you’re a real estate seller, this blog should make you very happy!!
Call me if you have any thoughts on the subject.
PS: The statue above is on Commonwealth Ave. by City Hall, and has two figures, the young Johnny Kelly, and the old Johnny Kelly, who ran the Marathon more than 40 times.