The Boston real estate market is suddenly red-hot. Sales are up, prices have risen, and bidding wars—unheard of two years ago—are now a given in both the city and the ’burbs. To take the temperature of the market, we spoke with Jennifer Titus, exceptional properties specialist with William Raveis Real Estate, Mortgage & Insurance in Boston, and Jill Boudreau, sales associate with Coldwell Banker in Wellesley.
How much have you seen values rise in the past year?
Jennifer Titus: The majority of Boston neighborhoods are yielding double-digit increases in average prices from 2012, from approximately 10 percent in South Boston and the South End to 15 percent in Beacon Hill and Charlestown.
Jill Boudreau: In the suburbs we are seeing an average 7 percent increase— and a 28 percent lift in sales volume. Seller confidence is coming back.
JT: The greatest velocity is within the ranges of $500,000–$600,000 and $1 million–$1.5 million. Families with children are staying in the city, and empty nesters are enjoying the next phase of life in urban environments.
JB: Our biggest population i s relocation buyers coming out of Boston in the price point of under $1 million and under $1.5 million—that’s where the most buyers are. We’re also starting to see activity in the higher end, in the $4 million to $5 million range, which we haven’t seen in years.
What’s been driving the increase in values?
JT: Inventory levels are at anemic lows with the spring market providing 50 percent fewer condominium units for sale during 2012. Agents are deferring showings on new listings until the first open house, which creates anxiety for buyers, thereby inducing bidding wars, which ultimately drive up prices.
JB: In many instances, we are seeing multiple bid situations—which is great if you are a seller, but can be frustrating if you are a buyer. I brought a property on the market recently with an open house on Sunday; on the previous Friday I had four offers, and not a single person had seen it.
Why is inventory so low?
JB: There is such pent-up buyer demand, houses are flying off the market. In 2012, the average stay on the market for a single-family was 119 days. Now, for 2013, we are looking at 78 days and falling.
JT: There is also a paralysis in the market because of buyers who want to move but are fearful of selling without an exit strategy. This dynamic is having an adverse effect on inventory because supply and demand have to align seamlessly for a successful transition.
14 Peirce Road in Wellesley, listed by Boudreau, for just over $3 million.
What are the hottest neighborhoods?
JT: The South End has exploded in popularity due to the quality of housing, its eclectic mix of restaurants and shops, and a sense of community.
JB: Newton is wild. I am hearing from my colleagues that at certain price points they are seeing 18 offers, 22 offers. It’s unbelievable. One house came on for $799,000 and sold for $200,000 more than the asking price.
How do you expect sales trends to continue in the next year?
JT: Hopefully we will have a more balanced market, but the rise in interest rates could start to stall the first-time home buyer, which has a ripple effect on higher-priced properties.
JB: I think rates are still going to be very attractive. That will give buyers more buying power, and values are going to continue to rise. I don’t think they’ll hit their peak in the next year. If the rebound continues, we’ll be up to healthy levels in the next few years.
Jill Boudreau, Coldwell Banker, 71 Central St., Wellesley, 617-460-3787