Are the condo bidding wars here to stay?
Boston condos are consistently selling for more than their asking prices.
A new report from the Greater Boston Association of Realtors (GBAR) has some good news for condo owners. Buyers are consistently paying more than sellers are asking for their homes.
The GBAR report found condo sellers received offers that were 101.1 percent of their original listing price in July. That’s a boost of 1.3 percent from the previous year.
Over the course of the year so far, sellers have been seeing offers on their condos that are 100.3 percent of their listing price. July was the fourth consecutive month where condos went for over asking price, according to the Boston Business Journal.
The news is almost as encouraging for sellers of single-family homes. In July, sellers received 99.1 percent of their asking price, a 1 percent jump from the previous year.
The median sales price for condominiums in Massachusetts rose by 9.8 percent to $460,000 in July. Meanwhile, the median price for single-family homes rose by 5 percent to $530,000.
What’s going on?
Low inventory could be one possible explanation for the generous offers made on listed condominiums. GBAR reports the number of available condos dropped by 25.3 percent in July. Single-family homes dropped by 20.6 percent.
With these conditions in place, Michael DiMella, a former president of GBAR and managing partner of Charlesgate Realty Group says “there’s likely to be bidding wars’’ over condos.
“Buyers are seeing this as a good time to get in the market,’’ DiMella told Boston.com in a phone interview. “The flipside is there isn’t enough inventory, so there’s going to be bidding wars that happen over desired condos.’’
He recommends buyers work with a realtor who has knowledge of the neighborhood and community where the property is located to navigate any potential bidding war situation.
While sellers are in a good position, DiMella cautions homeowners not to seek unreasonable asking prices for their properties. If they price their homes too high, they risk receiving no offers.
Story continues after gallery.
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“There’s a difference between being realistic and overly aggressive with pricing,’’ he said. “Those who are realistic are creating that demand, but those who overprice could miss the market.’’
Like buyers, he recommends working with a realtor who knows where bidding wars are breaking out and who has a strong sense of a condo’s appropriate listing price.
DiMella predicts condo prices will remain high as long as condo inventory remains low and Boston’s economy continues to strengthen.
“I don’t foresee demand slowing in any way,’’ he said. “We’ll start to see more inventory on the condo side of the market, that may help moderate prices a little but we’ll still see some solid [price] growth.’’
“Boston is an extremely desirable place to live, the economy is growing, and it’s a great place to invest in real estate,’’ said DiMella. “People need to understand this how the market is right now. It’s not good or bad. It is what it is.’’
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