Highlights from the Boston Real Estate Now blog.
You would think that real estate agents across Massachusetts, especially those working within Interstate 495, would be ready to roll out the champagne right now.
After all, home and condo prices are soaring and, in Greater Boston’s more affluent suburbs and city neighborhoods, have already blown past highs set during the bubble years.
But even as home values rise, the confidence level among realtors is slipping, according to a new survey by the Massachusetts Association of Realtors.
MAR’s Realtor Market Confidence Index fell for the second month in a row in December, hitting 52.63 on a scale of 100. Anything above 50 is considered a strong or rising market while below 50 signals a weak or declining market.
The December confidence numbers were down 8 percent from a year earlier.
You see, while high prices are just fine and dandy, if you are in the business of selling real estate, volume is far more important. And, with the number of listings scraping along at historically low levels down 20 to 30 percent compared with already anemic early 2013 and 2012 levels — there are not enough listings to go around.
Here’s an interesting detail. Asked to sum up the state of the market in a word or two, realtors polled by MAR labeled 2013 as the year of “no inventory.”
“Sellers staying on the sidelines” was the second most popular phrase, followed by the “return of home equity.”
As we head into the spring market, we may very well see an uptick in listings. But whether it will be large enough to keep up with demand is another question.
This is not just about a few realtors bummed out about having fewer homes to sell. Rather, it points to the top challenge right now for the market in the Boston area, especially for buyers actually hoping to land a home.
Still, the official line is that rising prices will entice more homeowners to list their homes, eventually easing the inventory problem.
“Price increases have helped put equity back into homes, leaving more homeowners in a position to sell and that should help increase inventory and confidence in the market going forward,” said MAR president Peter Ruffini, regional vice president at Jack Conway & Co., in a press release.
Sorry, but I am not a realtor so I am not so professionally optimistic. Anyone thinking of selling a home first has to be confident of finding another one to buy. Many would-be sellers are looking out at a market with too few attractive choices and deciding not to take the plunge.
Meanwhile, new construction has lagged for years in Greater Boston.
Is Dot the next Southie?
Dorchester, Boston’s largest neighborhood, has long been one of the Hub’s most affordable places to live as well.
It has one of the largest collections of Victorians anywhere in the Boston area, as well as being home to the ubiquitous three-decker.
Frankly, it’s not just one neighborhood, but a collection of mini neighborhoods, such as Andrew Square next door to South Boston, Savin Hill, Fields Corner, Meetinghouse Hill, Codman Square, among others.
Better yet, it is probably one of Boston’s most diverse neighborhoods, home to 100,000 of the city’s 636,000-plus residents.
But as prices rise, is Dorchester set to follow the lead of South Boston, which has been transformed by a wave of development and rising prices?
The median price of a condo in Dorchester is now $285,000, up nearly 30 percent, while single-family home prices are up 24 percent, to $332,500, Warren Group stats show.
Certainly prices in neighboring Southie are out of control, with the median price of a single-family home having hit $517,000, up 17 percent through November, while condo prices jumped 11 percent during the same period, to $446,000, Warren Group reports.
Younger buyers are getting priced out of Southie, and Dorchester seems logical to emerge as a less expensive alternative, noted WRX on the comment board of this blog.
What about Dorchester? Is this the next Southie? Or, for that matter, is Dorchester the next JP? Jamaica Plain is fast morphing into a hipster hotspot, with a median home price of $567,000, up 27 percent in 2013 through November.