Market momentum is on everyone’s mind.
Well, let’s look at the facts …
Real estate in Wellesley is wavering…that is the volume and average sale price plunged dramatically during the first 45 days of 2009, compared to the same period in 2008.
In 2008, 28 homes closed during the first 45 days, for a total value of $39.4 million.
Same time this year – 9 homes closed, representing a 67.9% plummet.
Sales volume fell 74.4% to only $10.1 million.
The Globe goes on to say that Wayland was hurting in comparison to Wellesley.
During the first 45 days of 2009, Wayland experienced a 125% increase in home sales over the same period in 2008.
In 2008, Wayland had just 4 homes close for a total value of $2.8 million.
In 2009, that number jumped to 9 homes closed .
Total sales volume in Wayland for the same time period in 2009 totalled $5.1 million, representing an 82.1% increase over 2008.
So what does this all mean?
Well it’s encouraging that one broker had 42 people come out to a Wellesley open house. But the Globe neglects to tell us what the price point was.
And it certainly doesn’t justify the “island of safety” conclusion drawn by the Globe.
What it really means is that for a long time period, the high end market in Wellesley was relatively untouched by the trending downward of the economy.
While many surrounding communities felt the effects of the recession which we “officially” entered in 2007 much sooner, Wellesey’s higher end, homes priced in the over $2 million range, continued to see high demand in 2007 and the following year.
But things started to change in the fall of 2008, following the collapse on Wall St.
The Wellesley market slowed considerably, and there are now 26 homes for sale over $3 million. That’s a lot of inventory.
During the past 6 months, 4 have sold.
At the rate of four sales every six months, Wellesley has more than a 3 year supply of homes for sale over $3 million.
So Wellesley held up longer than most, and is now being hit harder. When you have a lot of inventory, the sale prices are going to come down.
Towns that were hit by the recession earlier on, seem to be starting to pick up. There’s less inventory and a lot of pent up demand on the part of buyers.
Wayland is a good example of this.
And price plays a major role.
The higher end is soft in outlying communities, as it is in Wellesley.
But the price point is very different for what constitutes high end in Wellesley versus the high end market in towns such as those listed in the Globe’s article on “Strained Relations…”
A town closer to Boston, such as Wellesley, will probably see a stabilization sooner in the high end, than will a town over 20 miles outside the city.
Homes under $1 million are selling better than those priced above right now.
Those open houses are seeing a lot of activity.
People who are downsizing may have equity to buy another home, and at the same time, first-time buyers have increased tax incentives in the new stimulus, making buying a home an attractive option.
In all cases though, it is the homes that are priced correctly that are selling.
And the right price is the perceived value in today’s market.
Now six weeks is a short period of time.
And this is simply a snapshot of the current market.
But it is indicative of where things currently stand.
And where is the market headed?
Top Real Estate Agent for more than 14 years, serving the real estate needs of Wellesley, South Natick, Weston, Needham, Wayland, Newton, Framingham and other MetWest communities. www.johnprescott.net
Century 21 Commonwealth
BostonKayakGuy…The MetWest Scene
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