Now a Seller’s Market in Boston Luxury Real EstateOctober 6, 2012
The market has definitely turned around and the sellers are delighted. Unfortunately, buyers don’t have as much negotiating room as they had for the past two years. In some of the best Boston neighborhoods, every listing under $1.5M has had multiple offers and sold for way over the asking price. As a result, many unhappy and disappointed buyers are faced with what to do next.
To Pay Over Asking Price or Live Outside the Best Boston Neighborhoods?
Of course buyers don’t want to pay over the market price. But bidding wars prompt questions like, how much should a buyer raise his/her offer above asking? Buyers who have been in the Boston luxury real estate marketplace long enough are pretty savvy and know what the reasonable price for a property, based on comparable sales. It really comes down to:
- How badly does a buyer want a particular property?
- How much beyond the asking price is the buyer willing to go (think ROI)?
- Is it wise to pay over the market price?
The fact remains that inventory is very limited in all price ranges. Sellers are impacted by the limited inventory as well. They tend to hold out for higher prices, because they don’t have anywhere to move and know they will be affected by the shortage too.
For buyers, it all depends on their situation. Some buyers feel that it’s not worth getting into a bidding war, and they’re willing to wait until more inventory comes on the market. They take their time and are in no hurry. Others are just tired of looking and with mortgage rates so low, they are willing to stretch their budget and offer whatever it takes to get the Boston luxury real estate property they want.
If it’s a long term commitment, then it really may not matter how much you pay today for a property. If you’re planning to sell in a few years, then return on investment should be a more thoughtful consideration. It’s a mistake to offer an outrageous price for a property by acting too fast, and you may later regret it. You have to make sure that you have done your homework.
Contact me for advice about actual property value. I’m here to make sure you’re comfortable and happy in your next home.