LOCAL REAL ESTATE UPDATE FOR HIGH END PROPERTIES

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Single-Family House Sales: Greater Boston

The closings that occur in January and February of each year generally reflect under agreements from the fourth quarter of the previous year. 2011 seems to have come out of the gate strong in terms of single-family home sales over $1 million, but the impact of the severe weather in January and February is not yet reflected in the data. Last month 45 single-family homes conveyed in Eastern Massachusetts (excluding the Cape and Islands and towns west of Worcester County) priced over $1 million and this was 3 fewer than the same month last year — a 6% decline. The market for million dollar homes is still in recovery, but we remains unclear if we will achieve the peak levels of a few years ago.

On a year-to-date basis for the year 2011, 16 more single-family homes have sold over $1 million than the same two months of 2010, for an increase of 14.2%. Last year, the market absorbed 113 million dollar homes between January and February; the comparable number in 2011 is 129 (and only 77 in 2009).

As sellers contemplate putting their luxury homes on the market this spring, they need to be aware of the imbalance between supply and demand (much more supply than demand) and the skittishness of potential buyers at the high end of the market.

The $2,000,000 to $2,999,999 price segment is also recovering, but it is a much more thinly-traded market than many sellers realize. Sales in this price band account for only 19 of 129 million dollar plus properties conveyed. This is under 15% of the entire million dollar market!

On a year-to-date basis, 6 more single-family homes have sold between $2,000,000 and $2,999,999 than the same two months of 2010, for an increase of almost 36%.

Single-Family House Sales: Statewide

While 46 towns are represented in the 142 closed sales over $1 million statewide for the first two months of 2011, the data are skewed towards the more popular communities. The top 5 towns (Newton, Wellesley, Boston, Brookline, and Barnstable) account for 42% of the closed million dollar sales. As was true last year — with the exception of Barnstable on the Cape — there is a heavy concentration of sales in this price range in the towns with the closest proximity to the City of Boston.

Some other statistics for this market segment:

— The average price for a single-family sold over $1 million so far in 2011 is $1,700,139

— The average house in this price range had 10 rooms and approximately 5 bedrooms

— On average, these houses sold at 91.68% of their original listing price — underscoring yet again the importance of accurate pricing in today’s market. Listings priced too far over market value are not selling.

For the state as a whole, million dollar single-family sales in the first two months of 2011 exceeded the same period of last year by 17.4%. Interestingly, the top 10 towns for million dollar sales were up 42% during the same period. With the exception of Cambridge and Cohasset, 8 of the top 10 towns were either flat or up.

Condominium Sales: Statewide

8 cities and towns are represented in the 51 condo sales for the first two months of 2011, but Boston alone accounts for 76.4% of the closed million dollar condo sales.

Some other statistics for this market segment:

— The average price for a condo sold over $1 million in calendar 2010 was $1,821,652. (Interestingly, this is higher than the average sales price for a single-family home in the same time period: $1,700,139.)

— The average condo in this price range had 6 rooms and approximately 3 bedrooms

— On average, these condos sold at 95.58% of their original listing price — underscoring yet again the importance of accurate pricing in today’s market. Condos priced over the market simply aren’t selling.

Comparative data for the first 2 months of 2011 versus 2010 are somewhat deceptive because of sales at 400 Stuart Street (The Clarendon), Boston. In the first 2 months of 2010, in the first wave of occupancy, 11 units closed at the building versus 2 in the same period of 2011.

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About Brad Hartz
I am the owner of Hartz Real Estate, a Massachusetts residential real estate sales company specializing in houses and condominiums.

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