North East Real Estate Market Update (5/26/2020)

A lot of clients (and friends) have been asking me what is the state of the real estate market now. Is it a good time to buy? How will we know when it makes sense to start looking more aggressively? Is the coronavirus impacting the price of homes?

I'm glad to help answer these questions and provide some insights into what is happening in the market today.

What I have noticed is over the last week and a half the inventory is starting to increase. Hard to tell in terms of volume how things have been affected by the coronavirus, but I have made a few observations that are worth sharing.

1. Houses that were taken down earlier in the season are being relisted

Example 1: A house being listed in March, taken down, and then relisted in May

What we see in this example above is a house that was listed in March and had the unfortunate timing of running into the coronavirus. On March 20, 2020 the listing agent probably realized that there was no demand for real estate at the time and made the decision to actually take the listing down. The listing was down almost a month and a half before finally putting it back on the market on May 8, 2020.

Why would someone take a house off the market? My guess is she wanted to do everything she could to prevent the DOM (Days on Market) number from ballooning during this period. Usually if a house sits on the market too long and gets "stale" most prospective buyers assume there is something wrong with the house, which is why everyone before them passed on it. This could potentially have a snowball effect such that more and more people pass on it, which leaves it on the market longer, and ultimately makes it even harder to sell.

2. Some homes are starting to drop their price (only slightly)

Example 2: House being listed in March that cut its prices a month or so later

Example 3: House being listed in March that cut its prices in both April and May

Some homes are not being priced as aggressively. There's a few I've seen that were listed in March that had a hard time moving and as a result are trying to drop their price to be more appealing and competitive. Generally, when a homeowner lists their property to sell they hope it sells quickly. For someone to own a home and sell it, the case is usually that the sellers are trying to move themselves and the longer their current home is for sale the more it puts the house they are trying to buy at risk of falling through.

3. Good homes are starting to move quickly again

Example 4: House being listed in at the end of May that had an offer accepted four days later

As we got later into the month of May and the state of Massachusetts' restrictions started to ease up I'm seeing that people are feeling more comfortable pulling the trigger on houses that are nice and at the right price point. I think this is a combination of the general sense that the worst is behind us combined with the fact that a lot of people have been watching the real estate market from the sidelines so they recognize a house that meets their criteria and they want to act fast before others realize the same thing. This is an example of a home that was on the market only four days before having an offer accepted. I would not be surprised if we start to head more and more in this direction over the coming weeks.

Overall Recommendation

Overall, I see this as a strong opportunity to buy. In an area with strong economic backing, great schools, and a variety of industries, it is a rare opportunity for buyers to have any amount of leverage. With two months of slow movement we are seeing the traditional sellers market lean ever so slightly to the buyers' favor. With places that were listed in March desperate to sell buyers are more likely to be able to negotiate price or other factors. Another reason it is currently a great time to buy is interest rates are still incredibly low compared to where they were even a year ago. It looks like more buyers are starting to emerge from their quarantine slumber so don't be afraid to act now while the state is only partially opened before everyone feels comfortable coming out and making offers.