DAVID DRINKWATER – ‘A better feeling’
After coming off a winter cycle where homes for sale lingered on the market longer than in the hot summer months, real estate agents are preparing once again for a busy sales season despite reports of a pending economic slowdown.
According to statistics from Worcester-based MLS Property Information Network, listings on its network in December 2000 for single-family homes in Greater Boston stayed on the market for an average of 47 days.
Similar statistics were seen in November as well, where the average listing stayed on the market for 44 days. October’s statistics mirrored December’s with a 47-day average, while the average stay for listings in September equaled those in November at 44 days.
Those averages are from 22 percent to 30 percent longer than the average days on market for homes in Greater Boston listed through MLS-PIN during the summer of 2000. Listings in June, July and August had average days on market of 36, 36, and 35, respectively.
The average number of days each listing stayed on the market was consistently shorter each month than the corresponding month in 1999, one of the hottest years ever for the market. The total number of homes listed each month, however, also was consistently higher.
Area Realtors said a number of factors this year contributed to the traditional winter slowdown, ranging from the stock market to the presidential election.
David Drinkwater, a Realtor with Coastal Countryside Properties in Cohasset and president-elect of the Massachusetts Association of Realtors, said he saw several fluctuations over the past year in the amount of time homes remained on the market before being sold.
“In terms of market perception, we’ve had a good market over the past several years,” he said. “The spring and summer of last year were very strong, but as we got closer to the election, I found there was more hesitation on the part of the buyer.
“There was more window shopping going on than anything else.”
While the holiday season typically brings a slowdown in the market, Drinkwater said the numbers in late 2000 were additionally affected by the election.
“The election had a lot to do with it,” he said. “It didn’t necessarily have to do with Bush vs. Gore, because the two have a lot of similarities and their views aren’t widely divergent. But people deal with uncertainty in different ways, and some chose to hold onto their money during the uncertainty of the election.”
Drinkwater added, however, that because the presidential election takes place only every four years – and since it was followed by a month of uncertainty as to who won the election – he felt 2000’s numbers were an anomaly and were not indicative of any specific trend.
The presidential election may have had an effect on homes staying on the market longer, but the pricing of homes also played a significant role, according to some.
“It does appear the days [a home is listed] are longer,” said Shari Marquis of Marquis Real Estate/GMAC in Brighton and 2000 president of the Greater Boston Association of Realtors. “It has to do with a number of market conditions, but price is still a major factor, even though the inventory is still low.”
Robert Imperato of Boston Realty Assoc. in Boston agreed. “It all comes down to whether a house is properly priced,” he said. “The houses that are priced properly are still selling immediately, but if they’re overpriced they’re no longer selling as quickly.”
He said there are a number of properties for sale in Boston’s Back Bay neighborhood that fall into that category. “They’re really nice, but they’re overpriced, and buyers now are more sophisticated and are willing to wait.”
Pent-Up Demand
Marquis said homeowners may feel compelled to list their homes with a high selling price because of the rapid appreciation of home values they have observed over the past few years, a theory that might not work as the economy begins to cool down.
She added that she observed more instances of hesitancy in the market around her company’s Plymouth and Duxbury branches, which typically lists more expensive homes than the Brighton branch.
“We saw a lot of hesitancy in the higher-end,” Marquis said. “One consideration may be that most high-end buyers also have money in the stock market, and fluctuations there affect homebuying.”
The shortened number of days that homes linger on the market may have already arrived.
“I listed a house in West Roxbury the other week in the upper $200,000 range, and had an open house from 1 to 2:30,” Imperato said. “The first person came in at about six after 1; from then on there were never less than two people in the house at the same time looking, and at the end the home sold for over the asking price.”
“Last week, I put three listings on the market and all three sold in one town,” Drinkwater said.
The agents interviewed also said they felt homes would likely be on the market for shorter periods of time once the traditional spring homebuying season gets into full swing.
“Now that the first of the year has hit, the rates are down, and the election is behind us, there’s a better feeling out there,” Drinkwater said. “It’s been busy. You have four months of pent-up demand of buyers that were waiting.”
The early months of the year traditionally have been the time when homes remain on the market the longest. Listings in Greater Boston in January of last year had average market stays of 58 days; averages in February and March were 64 and 65 days, respectively, according to MLS-PIN statistics. Averages in January, February and March of 1999 were the highest of any months that year as well.
Imperato said the time appears to be right to make a home purchase, especially considering the low interest rates that lenders are currently offering. “Some people have been waiting four or five years for the market to go down, and it’s cost them a fortune in waiting,” he said. “Unemployment is still low … and there is still good consumer confidence. I don’t see any slowdown.”
