25% of condos in town sold for over $800K through Q3
Steve Poltorzycki, an Arlington resident writes about what he sells -- local real estate.
Here's my newsletter recapping the Arlington condominium real estate market through three quarters of 2018. I hope you find it informative. While the numbers are different, the narrative is similar to that in the newsletter I recently sent out regarding the Arlington single-family home market.
Twenty-five percent of condos sold for over $800,000, an all-time Arlington record. Through the first three quarters of 2018, 44 condos sold for over $800,000 (compared to 37 for all of 2017).
Buyer demand stays strong
After a momentary step back in 2014, days on market (DOM), a good measure of the strength of buyer demand, continued their downward trend from 2016 through 3Q 2018 (the shorter the time, the greater the buyer demand).
Eighteen DOM during 2018 indicates that condos were on market for only a short week or two before they went under agreement. The strength of buyer demand in Arlington in 2018 surpassed that in all neighboring communities, including Cambridge (25 DOM), Medford (26 DOM), Belmont (29 DOM), Lexington (30 DOM), Somerville (31 DOM) and Winchester (41 DOM).
Another key measure of buyer response to the market is by how much actual sales prices exceed (or fall below) asking prices. Arlington condos in 2018 sold on average for 6 percent over asking price, reflecting extraordinarily strong buyer demand. Buyers don't pay more than asking price unless they face stiff competition from other buyers for the same property.
Inventory levels may be increasing
There was a modest uptick in new listings during the first three quarters of 2018, which saw 232 new listings come on market, as compared to 216 during the same period in 2017. Sellers appear to be seizing the opportunity to lock in the gains made available by all time high price levels.
Arlington condos are a good value
Per-square-foot prices in Arlington ($483/sq. ft.) were significantly lower during the first three quarters of 2018 than in neighboring Cambridge ($806/sq. ft.) and Somerville ($627/sq. ft.), and were not far off prices in some nearby upscale towns, such as Belmont ($454/sq. ft.) and Lexington ($421/sq. ft.).
This shows that, from a buyer's point of view, Arlington condos are a good value in comparison to condos in nearby towns, and, from a seller's point of view, that the Arlington market will continue to attract buyers priced out of some neighboring markets.
Implications for sellers, buyers
Sellers of condos in Arlington are enjoying one of the stronger seller's markets in the Boston area, with prices continuing to rise steadily. Of course, there is no guarantee that condo prices will continue to go up.
Rising interest rates, a stock market correction, and local factors, such as a potential Proposition 2 1/2 override (raising Arlington property taxes in the face of an anticipated budget shortfall in 2020 -- an issue still under discussion) and the large debt exclusion that will be needed to pay for the high school building project, could have a chilling effect on Arlington home prices.
In the short term, though, a new high school would likely make Arlington an even more attractive place to live, which could increase home prices down the road. Given the record prices condos are fetching on the market, owners thinking of selling might want to lock in gains by selling sooner rather than later.
Buyers looking for a condo in Arlington will continue to face a seller's market, often with several buyers competing for the same property.
Buyers need to be prepared to move fast and put in competitive offers with as few strings attached as feasible. But, despite rising prices and tight inventory, Arlington per square foot prices are a relative bargain compared to Cambridge and Somerville.
And if Arlington prices are too high, buyers may want to consider nearby towns such as Burlington, Medford, Watertown, Waltham, Bedford or Woburn. The median condo price during the first three quarters of 2018 in Burlington ($565,000) was 7 percent less than that in Arlington ($602,000), in Medford ($529,500) it was 12 percent less, in Watertown ($525,000) it was 13 percent less, in Waltham ($494,000) it was 18 percent less, in Bedford ($481,500) it was 20 percebt less, and in Woburn ($440,000) it was 27 percent less. Prices were lower even in upscale Lincoln ($538,000), showing how far Arlington condo prices have come.
Data were collected from MLS PIN and MAR and do not include private transactions. Bershire Hathaway Home Services Commonwealth Real Estate and its sales agents make no representation as to the accuracy of the data and are not responsible for any actions taken as a result of use of or reliance on this information.
This column of information by Steve Poltorzycki was published Friday, Nov. 2, 2018. Please email him at steve[@]stevepolt.com if you would like to receive his real estate newsletter and see his website >>
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