If the local real estate market were a person, the best way to describe it these days would be to say: The fever has come down, condition stabilizing.
Both statistics and real estate professionals interviewed this week say that the breathtaking surge in sale prices for housing in JP in recent years—as in the city, the state and the entire US to some extent—has ceased. At the same time, property values are not crashing, either.
What has happened in general is that there is more inventory on the market for somewhat longer periods, and prices have come down slightly.
Karen McCormack of McCormack & Scanlan and Tom O’Connor, an agent at Prudential Maxfield & Company, offered similar advice to fellow real estate professionals, buyers and sellers this week.
“They just have to adjust their thinking,” McCormack said. “Sellers who want to sell right away need to be more flexible.” And, though buyers have “more negotiating power” than in recent years, “there are still a lot of buyers that need and want to be here.”
“The market should not prevent selling or buying,” according to O’Connor. “Just buy and sell wisely.”
Tom Calucci of Coldwell Banker Residential brokerage said he was feeling especially good about the JP market this week. “Things started to pick up the last couple of weekends. It’s coming back to life.” He said dozens of people attended open houses his agents held the past two weekends.
Local real estate people the Gazette spoke to said the summer was typically slow, but things did not pick up right away after Labor Day. “There were some long faces,” Calucci said.
McCormack said there are double the number of condos on the market in JP than there were this time last year, and the rental market is “more flexible.”
“The market is not bad,” she insisted, more like getting back to normal. McCormack has worked in real estate in JP since 1989, and she has seen it all.
In the early 1990s, she remembered, it used to take about nine months to sell a property. “We used to have open houses just to show properties, not to sell them,” she said. She called the bidding wars buyers often got into when the market was hot a couple of years ago, “strange.”
“You could sell anything to anybody,” in 2004 and 2005, O’Connor said. Those years were an aberration in terms of statistics, he said. He recalled some potential buyers writing “love letters to the house,” where they wrote sentimental letters to sellers about why their offers deserved to be chosen.
In those days, he said, the media, in part, created the “feeding frenzy.” Now, he said, the media are promoting a “crisis mentality. People are panicking at the news.”
Everyone agreed that interest rates going up 17 times in a row recently dampened buyers’ enthusiasm. But they felt more optimistic because rates were not raised the last two times they might have been.
So what are the numbers like? McCormack said a survey she did comparing the two years prior to August, showed prices down 4 percent overall in JP.
A report on real estate trends for fiscal year 2006 issued by the City of Boston’s Department of Neighborhood Development says, “With 68 percent of residential sales, condominiums drive Boston’s real estate market.”
Calling condo sales JP’s “leading indicator,” as well, O’Connor went right to the Multiple Listing Service statistics on his computer, measuring condo sales in Jamaica Plain between Jan. 1 and Oct. 1 each year.
In 2002, 53 condos sold for an average of $378,000 in an average of 36 days.
In 2003, 85 condos sold for an average of $414,000 each in an average of 69 days.
In 2004, 77 condos sold for an average of $425,000 in an average of 62 days.
In 2005, 86 condos sold for an average of $429,000 in an average of 55 days.
So far this year, 73 condos have been sold for an average of $400,000 in an average of 88 days.
What conclusion did he draw? “The real estate market here is fine—not bad, not fantastic. Stable.”