Even with interest rates approaching six percent, the Jamaica Plain real estate market remains strong, with a tight inventory according to local realtors.
“Jamaica Plain real estate is still strong, “ said Ellen Grubert of Compass Real Estate. “Many buyers view Jamaica Plain as an affordable neighborhood. There is a lot of home ownership,” she added.
Erin Russ of Compass noted, “This is still a sellers market, though there are fewer offers on a property than a few months ago.”
“This is still a sellers market, but not as robust,” agreed Constance Cervone at Cervone Deegan Associates at Coldwell Banker, though she added that some buyers might be holding back on buying because higher rates determine how much house they can afford. In many cases, the higher rates might dictate a house for a buyer, but without all the bells and whistles.
The recent increase in mortgage rates dramatically has affected the affordability of a home purchase for many buyers. When rates were at three percent at the end of last year, the monthly payment for principal and interest for each $100,000 borrowed was $421.60. However, at an interest rate of five percent, the monthly payment is $536.82.
For a person borrowing $500,000 at five percent, that represents a substantial increase in their payment of $575 per month.
However, Cervone noted that she had an open house last weekend and received four offers.
Ken Sazama at Compass Real Estate pointed to the lower inventory. “It’s slower than last year,” he said. He noted the current active listings of properties on the market showed 11 single families homes, 54 condominiums, and 12 multi-family residences.
“This is still a seller’s market, but the playing field is more level,” he added.
The lack of inventory is the principal reason why prices have remained high despite the sharp increase in mortgage rates. The laws of supply and demand still control the market. With higher interest rates preventing many sellers from being able to move up to a more expensive home, some experts say this is keeping a lid on the number of available homes on the market.
According to all of the realtors interviewed, with the market not in the same buying frenzy that was typical of the past year, buyers are now taking their time before submitting an offer and are putting in contingencies.
Nonetheless, according to Russ, sale prices are still above asking price, with single-families selling for 107 percent of asking price and condominiums selling at 104 percent.
“The market has not totally shifted, though listings are staying on the market longer,” said Karen McCormack at Insight Realty Group.
McCormack noted that at the height of the real estate boom, properties were on the market for less than a week. Asked about the number of listings as compared to a year ago, she said that they are about the same.
According to McCormack, “All neighborhoods in Jamaica Plain are hot, since all are close to green space and the MBTA.”
Cervone pointed out that she has a buyer ready to pay up to $3 million for the right house, but cannot find it.
Realtors offered some general advice for both buyers and sellers:
For sellers, keep the listing price for the home in-line with the market and neighborhood. Certain neighborhoods, such as Pondside, Arboretum, and Central, always will command higher prices. And lastly, they said, now is a great time to sell.
For buyers, have your finances in order — a pre-approval letter from a lending institution would be great — and if you find your house, be prepared to move fast.