I’m looking at house-buying on a 3-5 year timetable, ideally in Camberville or neighboring communities; watching companies like GE move into the area and biotechs and internet companies continue to expand in Kendall Square; and curious to take the temperature of the market, from someone who’s closer to it than I am, in case I need to adjust my plans. I see from the blog that in 2015 it looked last year like the market might be peaking and headed back down. Is that still how it’s looking?
There is no way to predict three years out. There are too many factors. These things will be so: prices are very unlikely to be lower. Even if there is another recession, our area recedes mildly compared with State and National averages.
- We have strong tech sector employment nearby. Were there to be another crash in tech employment (as there was in the late 1980s-early 1990s), housing would fall in the double-digits. This is unlikely. The layoffs at Biogen last summer mostly created a shuffling of positions among people employed there. A relatively small number became unemployed or left town. The GE deal seems to be moving forward. Akamai (a large tech employer) is not moving from Kendall. Tech and biotech are entrenched here.
- New building is a problem here. We are in an old city, there is little available land for building. So supply is pretty much stuck at low growth.
- The flow of foreclosed properties onto the market has been slow in Massachusetts because of a legal battle over legitimate property titles. Now that this has been resolved (in favor of the lenders) foreclosures are increasing here. In the meantime, property values have increased and many owners in Massachusetts were able to sell before their lenders took their house through foreclosure. In other parts of the country, foreclosure is declining because those areas have “sold through” their foreclosed inventory from the 2008 crash.
- Then there is the hypothetical Green Line extension. The struggle to right the broken promises of this infrastructure improvement lingers on. The Green Line, when it comes, will enhance the economic life of Somerville. Some of that will benefit Davis Square. But when will that happen? Anyone’s guess.
My office works collaboratively, so we share our “war stories” at our meetings. This gives us a pretty good read on what is in demand, what is going up, where the opportunities for good deals are, and where competition is going to lead to a lot of frustration. We report what we see, but it is not a prediction.
There were housing economists who claimed they didn’t see the housing crash of 2008 coming. As exclusive buyer’s agents, we did (and I wrote about it). But these economists know far more than I do about macroeconomic factors. I cannot begin to keep up with this knowledge base.
As I set this blog post up to publish, I read this, about how the declining birth rate in Japan creates a need for insurance companies to diversify their assets; thus invest in American real estate, and other things. There is no way I can do a comprehensive job of knowing things like that.
What are we seeing?
Our local condition continues the way it was last August, when I wrote that blog. We are in an inflationary period, where demand is high and supply is short. The increase in local well-paid jobs increases demand and therefore price. There have been some whopping-high sales around Davis Square that got a lot of attention. This is driving the craziness/desperateness of uninformed buyers.
What else has changed? Because the market has risen, short sales have slowed to a near-stop. Foreclosed properties, however, are rising. Information here from early this spring. Foreclosures are unusual in Somerbridge (Camberville), but there are more than last year. My office is seeing a lot more foreclosures in Melrose, Woburn, and areas that are second or third choices for buyers like you.
Over the winter, we made some pretty good deals, when there was property worth buying. Spring is when prices are they highest of the year, but choice is also the greatest.
My suggestion: sign up for an MLS search and check it weekly or twice a month. I can set your criteria to be fairly specific, then put no price limits on it. If you want that, let me know what you want as your search. I can do a radius from specific points (like .5 miles from Porter Square T.) I can limit condos to only townhouses, or only ones with elevators, or only ones with 2 parking spots… Let me know.
I will tell you if the database won’t do what you’re asking for. For example, the database cannot rule out busy streets (I really want it to!)
By watching the market casually, you will get a sense of what areas are hot, or not. What types of properties sell quickly, or not. Be aware that listing sheets are sort of like personal ads on dating sites. Read between the lines; many properties look better on your computer than they will in real life.