View from the trenches

In the past 3 weekends my colleagues and I have introduced three properties in "popular" neighborhoods that all received multiple offers. In each case none of the initial offers, despite the buyers being aware of the competitive bidding situation, reached the asking price. What was seen by all three sellers, with three very different homes, is that buyers are very cautiously submitting offers on property even in what had been considered "A+" locations. In the end two of the three properties went under agreement, and I'm sure the third isn't far behind, but I'm not sure if any of the three very popular listings will sell for full asking price. The other observation shared by all three listing agents is the drawn-out nature of the multi-offer negotiating process. In the past buyers saw the competition and one or two made a push to win the property. I think all parties would agree that in these cases the buyers gingerly approached the negotiating rounds and at no point was anyone truly forcing the issue and taking control of the negotiations. At the end of the day the signs are somewhat conflicting. Sellers who have a strong product to offer will still find a significant number of interested and qualified buyers. Those buyers will still make offers, but the speed and strength of those offers has been greatly reduced.

Finally, these three properties all had very strong initial open houses. In the case of two of the properties they were introduced to the marketplace on Easter Weekend, had no print advertising driving traffic to the door, and still drew an extremely high number of open house guests. If I were the Boston Globe I would start to worry that sellers are going to stop pushing for their house to be listed in the Sunday print edition, because agents have been saying for years now that the print media does not aid the selling process at all. I would much rather take the significant money spent on Globe advertising and create content-rich websites and e-marketing campaigns. At the end of the day, the sellers usually want to be in the Globe no matter what, so we're there, but this process would be significantly less costly without print media.

They're still selling

Last week I commented on the influx of new property on the market in Brookline. The best news is we haven't seen as much come on this week and we have an incredibly high number of under agreement properties. This week we already see 14 "UAG" condos which is a very nice response to the 21 that were added to the marketplace a week ago. In addition there are 11 properties with price changes and only 9 new listings.

The low number of new listings might be a result of the Easter Holiday weekend, but the high number of under agreements in a week that started with so much financial unrest is an impressive number. Personally, I was involved in a six offer situation on a single property which according to the Boston Globe, shouldn't be happening in this market.

The negative media persists, as we have to assume they will. Median prices are a sign of what happened 1-3 months ago, these numbers are what's happening now.

I am off for Good Friday and Easter, but hope to have more on Monday.

Here comes the rush.

Wow, while I haven't been officially counting, we see this week the highest number of new properties introduced to the market in a single week since last year. 21 new condos have hit the market in the last 3 days and another 4 single family homes. The condos range from a 541 sq. ft. 1 bed for $275,000 to a 3512 sq. ft. 4 bed for $1,295,000.

This should be the first full "test" of the Brookline market this season. We've always said that as long as the available housing inventory stays low the constantly regenerating demand of the Brookline market will keep things moving at a healthy rate. Twenty condos should not throw the whole balance off, but if we have another few weeks with similar supply increases we'll need to see some price adjustments to keep the "older" properties moving.

New Condos near Coolidge Corner

The TAB did a short piece about a meeting that will be held tonight regarding the planned new condo development on Sewall Ave. For those who don't know the players involved, the developer is the same company that currently owns The Warwick at Coolidge Corner as well as two other multi-family lots in and around Coolidge Corner with planned condo/townhouse developments underway. While the Sewall Ave properties are getting the most press, they are the farthest away from actual work. Look for new townhouse developments, possibly by the end of the year, first.

What we do know about the developer is they've got a pretty consistent track record with their Brookline properties. From the 11 Atherton Rd development two years ago to many others, primarily excluding the Warwick because of its unique size and nature, this developer will most likely provide a building that fits in with the aesthetic styles of the neighborhood and helps maintain the overall property value of surrounding homes. I personally think Coolidge Corner could use some more housing, but I always hope that the housing we add comes with on-site parking and at a price point accessible to the many young professionals who desire to call Brookline home. This development will be a quick walk to the Longwood Medical Area and it would be a shame if that community couldn't be served by new property.

Amazing Trends

In the last 20 days the Brookline market has seen the following:

New (not reactivated) property on Market:

9 Single Family Homes - average list price: $1,393,333

27 Condominiums - average list price: $651,174

1 Multi-family house

Property Under Agreement:

9 Single Family Homes (2 still taking back-up offers)

27 Condos (2 also still taking back-up offers)

1 Multi-family

At the time of year when we should see supply start to flood the market we're almost at a 1:1 ratio on new property to property being removed from the marketplace.

We can also look at some of the days on market for the property going under agreement and we see numbers like: 15 days & 25 days for Single Families and 7, 7, 10, 11, 12, 13, 18 & 26 days for the condominiums. The multi-family home was put under contract in 14 days.

These numbers are amazing given what we've all heard and seen in the marketplace. If your life is dictating that you should sell right now, but you're worried about what's going on, these numbers are proof that you will be ok. If you're looking to buy right now and you're "waiting it out" these numbers are proof that the property in Brookline will be bought my somebody else if you don't step up to the plate.

9 Factors Protecting Brookline from Market Collapse.

Today we had a discussion in the office in which someone commented that "there is no way Brookline can be the only town in America that doesn't 'crash'." Well, first, Brookline is nowhere close to the only town in America that is surviving the real estate "downturn." Second, I asked "what has changed about Brookline that would lead to a crash?"

1) Our schools are still as strong as they ever have been.
2) Longwood Medical Area is still next door and there is another new batch of residents preparing to move up here in the next three months.
3) We are still the absolute closest community to downtown Boston.
4) We still have (for lack of a less-used term) "historically" low interest rates for buyers.

Add to these factors:

5) Children are starting or finishing school every year, leading to lifestyle and housing changes for their parents.
6) Couples are still marrying or divorcing.
7) The biotech, medical and academic communities are not disappearing any time soon.
8) There are very few, if any at all, communities that have performed so strongly in recent years. Also, very few real estate investments have proven so stable as those in Brookline.
9) Almost most importantly, the number of homes "sitting" on the market is the lowest we have seen in a very long time.

All of these factors point to secure strength in the Brookline housing market in 2008. As much as we might expect a downturn or we might be afraid of one, we need to look at which factors could lead to or prevent a turn in the market. Commentary without analysis does not help anyone right now. The analysis shows us we are in a good spot. With the incredible mass-media negativity for the second half of 2007 we should have seen a real estate implosion. If some of the nine factors listed above change then we should look for changes in the market. As far as I can tell, with rates and inventory staying down, the other factors are not changeable in the short term.

Property news as we go into the "off-season."

As we approach the busy shopping and family visiting time of year, properties like The Warwick and Washington on the Square will most likely get more aggressive in marketing their final batches of units. Last year, when I was one of the listing agents for the Warwick, the busiest week we had was the week immediately before Christmas. That Saturday morning we were able to put 4 condos under agreement. I point this out because as buyers, you should still feel comfortable putting property under agreement if it fits the quality of life you are looking for. In fact, you might just find that the seller is more willing to negotiate in these upcoming weeks than they will in early January with the prospects of the "Spring Market" around the corner.

As you go about your holiday preparations, please consider me a resource. Having represented buildings like the Warwick as well as many other properties in and around Brookline, if there is a question about something you have seen, I will do my best to answer it. I spend much of my time during the week previewing new listings (most of the time before they hit MLS) and will be more than happy to try to point you in the right direction.

Who "sells" the house?

I am currently in the middle of an in-depth training program to become a "Certified Home Staging" expert and an interesting discussion came up in our down-time today. Many times a homeowner will call an agent, sign a listing agreement and then tell their agent to go "sell" their house. My question to you is... who sells the house?

Here is my take on the question:

You, the homeowner, have a product that you are bringing to a competitive market. You control the "product" but I control the image of that product. So who is more directly responsible for having the house sell (or not sell)?

Well, one way to look at my job as a listing agent is to break it down into four primary functions.

1) I must take the house you own and position it competitively within its market.

2) I must facilitate access to your home and focus on refining the public exposure and marketing of your home.

3) Once an offer is presented I must present the merits of the offer within its relation to your goals and the current market conditions. I will then present you the data from which we will build the case for your counter-offer. Finally I will deliver the counter-offers in a manner consistent with maintaining an amicable relationship with the potential buyers and their agent.

4) Finally, I will facilitate and manage the conditions agreed to within any offer and subsequent Purchase & Sale Agreement. This includes inspection contingencies, fire department inspections, appraisals, mortgage contingencies, and a pre-closing walk-through.

These are four major sections of the transaction, and each one of them has many smaller functions tied to them. For example, we need to make sure that we are pricing realistically for current market conditions. It would make no sense for me to give you numbers from April to price a November listing. You need better data than that. Second, bringing in a staging expert (someone certified) to consult with you and present a multi-tiered plan of attack for presenting the house to the public is critical. You, the seller, will be tasked with taking the staging tips and pricing data and coming up with an appropriate listing price based on how much work you're willing to put into the presentation of the house. While we're doing the "pre-launch" work we will most likely bring in someone to draw up floor plans and hire a professional photographer to highlight the feature elements of your home. We will also start working on a catered event designed to draw interest from your immediate neighbors. We might use this event to demonstrate some of the creative staging elements we have tried to incorporate in your marketing plan.

These, and so many other critical details, are just part of the listing package we agree to. As with so many contracted relationships, work must be done by both parties to ensure we make the strongest impression possible. If you are wondering why your house has not sold yet, take a look at some of these and match them with the efforts you've made on your behalf. Remember, at the end of the day I am tasked to facilitate and represent the sale of your home, but you are the one selling. Make sure you're taking an active role in the process!

I know what you're saying, but what do you mean?

There is so much talk these days about the real estate market, pricing changes and trends, and all things related to our most precious investment. What does it mean? What numbers should we pay attention to and what should we not worry about?

Statement 1: "The real estate market has dropped close to 20% nationally."

Response: There are areas of the country that are being hit very hard right now. Some of the largest losses are in Florida and California.

Statement 2: "The media has story after story about how bad the market is, how can it possibly be good?"

Response: Compared to the 3rd quarter of last year, our total number of condominiums sold increased 15.6%. The median prices increased 3.0%. The average days on market is down two days and the total inventory remaining on the market is down 18.9%. The single family sales numbers are far and away better than the condos. Please contact me if you want the full breakdown.

Comment: So, what does this mean?

Response: Buyers and sellers need to take a good hard look at the numbers. Right now we are in "stand-off" mode. Buyers are going to properties and saying "I'm not going to pay that price because the market is down." It is critical for buyers to take a good look at property simply for how it fits the lifestyle they want and then have their buyer's agent negotiate the proper price for it. Sellers, you need to make sure you are absolutely attuned to the sensitivity of the market right now and take your best shot pricing your property from the start. Long gone are the days of "we'll try this price for a few weeks and if it doesn't sell....." Price your property to sell immediately. The worst thing that can happen is people get into a bidding war over it. Doesn't sound so bad now, does it?

We'll wait to see what numbers October brings us tomorrow, but for now Happy Halloween and take a deep breath. The sky is not falling.

New on Market?

It's Friday and before I go off and prepare for the Patriots' opener this weekend let's take a snapshot of what's "new." Why the question mark and the quotes? Well for condos there are 39 new properties in the MLS system for Brookline, 13 of which are below $450,000 which is first time home buyer territory here. Seven of the condos are in The Warwick (my former listing) and one is at Longwood Towers. Obviously these buildings are not "new" but they're units which haven't been owned before. Two of the other "new" condos have been on the market for a total of 592 days! That's almost 2 years!!!

So, how do 39 new condos to start September compare to previous years?

2006: 36 new condos (15 are below $450,000)
2005: 36 new condos (12 are below $450,000)
2004: 22 new condos (14 are below $450,000)

Ok, so what does that mean?

First, inventory was up in '05 and '06 because we were seeing the tail end of the "bubble" as the media likes to call it. Sellers were conditioned to take that last gasp chance at winning the real estate lottery. In '06 condos like The Warwick, Washington on the Square and Longwood Towers were all in full marketing swing. This year though we see the highest number of new condos. I thought The Globe said it was a bad time to sell.

Well, sellers aren't listening to the media when it comes time to list their property. Our number of new listings is up, but our overall inventory (see below) is down quite dramatically. This means people are out there buying. Sellers are getting the prices they need to get to keep the market moving and buyers are submitting offers.

The fears of supply out pacing demand are not being realized here in Brookline. The market is churning along quite nicely and as the fall progresses we'll see if the incredible year we've had to date continues.

For the record, I say this to all of my clients and will put it in print here: Every statistician who looks at trends will see 2004 and 2005 as statistical anomalies. They were so far off the charts that they should not be counted as valid reference points. If you remove them, 2006 was the best year ever for local real estate sales, and so far this year we've done even better. Why can't the media tell us this?