THE SAGE REPORT [FALL 2021]
This is a republishing of The Sage Report, my quarterly newsletter. To subscribe to The Sage Report, click here.
Hi All!
The COVID pandemic has brought many unexpected changes to the real estate marketplace. Pricing patterns that seemed consistent and reliable have been thrown out of whack and it can be challenging to make sense of what’s happening and where we are headed.
If you’re a landlord, keep in mind that with COVID, many young professionals are now working full-time remote which has resulted in:
A smaller overall tenant pool, as remote workers and students are staying in their state or country of origin at higher rates, which in turn has increased rental inventory – inventory is up ~20% YOY in Cambridge
Properties are spending more days on market – up ~40% YOY in Cambridge
Decreased rental pricing – down ~$200/mo YOY in Cambridge
Of course, results will vary based on location, unit layout, and other parameters. I’ve had some landlords actually increase rent without issue and I’ve had others who have been forced to decrease, $200-$300+/mo below previous rental levels.
If you’re a tenant, you have had more options to choose from and frequently at a better price point than a year ago. Take a look at the # of apartments listed in Cambridge via MLS over the past 3 years (graph below).
Before 2019, inventory was relatively steady, hovering between 2000-2100 apartments listed per a year, so it’s clear COVID is creating significantly more opportunity on the renter side.
For home buyers it remains a challenging market to buy, powered by:
Ultra low interest rates (I’m seeing mid-to-high 2s as of this writing) creating an influx of competition
All cash offers, mostly from investors, making it harder for conventional home buyers to remain competitive
Low inventory, making it hard to find solid choices at affordable prices
As long as inventory and interest rates remain low, I don’t see the buyer market changing significantly for the foreseeable future. In many scenarios, expect to pay well over asking for well-priced properties.
And if you’re a seller, now is an excellent time to sell. See below, where I’ve collected data on condos sold in the past 3 months in Cambridge and Somerville, with days on market of 14 days or less (indicating the property was priced appropriately):
Avg List Price = $945k
Avg Sale Price = $1.04M
That’s an average over asking sale price of ~$60k or 6%! I can tell you from firsthand experience, it’s not uncommon in this market to see $100k, $200k, even $300k+ over asking for some properties.
That’s it for now! Stay safe and healthy and be back in touch for the winter edition next quarter!
All my best,
Sage
Silvia Jaen
This quarter we are highlighting the BEST professional home cleaner, Silvia Jaen. Silvia has been in the cleaning business for 13+ years and provides consistently outstanding service at a fair price. Silvia is originally from Costa Rica and has two children, ages 5 and 11 years old.
She’s reliable, professional, kind and someone you can count on time and time again. I have used Silvia to clean my own home and many clients of mine have used Silvia with outstanding results. Give Silivia a shout and tell her I sent you!
Many owners and renters don’t realize that pet fees, condo move-in fees, and application fees are all actually illegal! Did you know that in the state of MA, the only payments an owner can ask for are first month’s rent, last month’s rent, security deposit equal to no more than first month’s rent, and a key/lock change fee?*
Premiere On Broadway // Italian-American with live music & dancing // Magoun Square, Somerville
Zuzu’s Petals // Wine + cheese bar // Inman Square, Cambridge
Menya Jiro // Ramen // Harvard Square, Cambridge
Menya Jiro: I tried the Pork Belly Bun and the Kagoshima Ramen, both great!
Cloud & Spirits // Korean inspired New American // Kendall Square, Cambridge
Cicada Coffee Bar // Vietnamese coffee shop // Central Square, Cambridge
Cicada Coffee Bar: I tried the Iced Sea Salt Shaker and the Spicy Cured Salmon Banh Mi with pickled daikon and carrot. Both were EXCELLENT!!
Shojo (coming soon) // Modern Asian // Central Square, Cambridge
Judy’s Bay (coming soon) // Izakaya // Central Square, Cambridge
Looking to sell, buy or rent your property?
Have general real estate questions?
Give me a ring, text or email
Sage@CambridgeSage.com
617-833-7457