2013 was a tough year for home buyers in Cambridge and Somerville, with very limited inventory, and a lot of potential buyers competing from those properties that were available. But if you were out there shopping, and were one of the lucky ones to win a bidding war, here’s what you could have bought…

With a budget of $300k…

Well, there wasn’t much out there at this price point, but 35 condos did sell in Cambridge this year for less than or up to $300k. The lowest sale price was $182k for a 288 SF studio at 9 Mullins Court in East Cambridge. Small to be sure, but renovated and a second-floor unit, which is rare at this price point — most of the lower-end of our inventory is “garden level” (aka, basement). For example, here’s a 2BR 692 SF garden-level condo at 269 Harvard St near Central Square, which sold for $299k.

269 Harvard -- $300k

In Somerville, there were 61 condos listed this year that have sold for up to $300k. Excluding one affordable-housing unit, the lowest price sale was $170k for a 350 SF 1BR condo in East Somerville, WITH a parking spot! At the top of the range, three condos sold for $300k on the nose, including a top-floor, 790 SF 1BR, under-the-eaves unit at 42 Cedar Street, just a couple blocks from Porter.

42 Cedar Street -- $300k

Moving up to $500k…

At this price point, 2013 condo buyers were solidly in the price range for a new or nicely renovated 1 – 2BR condo in either Cambridge or Somerville. For example, coming in at an even $500k, one happy Cambridge buyer scored a 1 BR/1.5 ba loft with 927 SF at NorthPoint. Garage parking included.

NorthPoint -- $500k

62 Central Street, Unit 2 in Somerville also sold for $500k on the nose. For that price, buyers got three bedrooms, two full baths and 1257 SF of living area in a nicely renovated unit on Spring Hill. No parking with this one.

62 Central Street -- $500k

And for $700k…

You can now comfortably afford a renovated two or even three bedroom condo in most Cambridgeville locations. For example, check out this new construction, 3 BR/2 ba, 1609 SF condo with one garage spot at 141-3 Harvey Street in North Cambridge, which sold for a cool $699k.

141 Harvey -- $700k

Our Somerville example is a great 3 BR/2.5 ba penthouse unit with 1447 SF on two levels at 80 Webster in Union Square, which came in right at $700k. It sort of has parking — in this building you have to rent a parking spot in the garage next door, but rates are reasonable at $125/month.

80 Webster -- $700k

And if you have a million dollars…

You’re now entering the realm of river views and/or really nice amenities. Here’s an example of what one buyer bought for $1M in Cambridge: a 4 BR/2 ba, 1885 SF condo on the Charles at 985 Memorial Drive. No parking but it did come with a fireplace, if that’s any consolation.

985 Mem Dr -- $1M

And over in Davis Square, just shy of a million, this 1938 SF, 3 BR/2 ba Wallace Street “urban chalet” sold for $950k. It offered high-end finishes and all kinds of bells and whistles including TWO parking spaces.

45 Wallace St -- $950k

Money is no object, you say?

Well, Somerville condo prices maxed out at $1,125,000 this year (only three condos sold for more than $1M), but there was still room to go up in Cambridge, where condo prices topped out just under $4M. And the distinction of being the most expensive condo sold in Cambridge this year goes to a 2170 SF, 2 BR/2 ba penthouse in the heart of Harvard Square, just above the soon-to-be-gone Upstairs on the Square restaurant. And here’s that buyer’s $3,974,000 view:

93 WInthrop -- $4M

Happy shopping — ho, ho, ho!

Always happy to divide-and-conquer, my colleague Natasha Burger and I recently divvied up the job of running 3-year home price comparisons for Cambridge & Somerville. I previously published my Cambridge stats, and am now adding Natasha’s Somerville data to the mix. I’m sure you’ll agree the market here in Cambridgeville is hot!

Somerville Condos  1BR/1ba, without parking
2011 YTD – 5 units sold – average price: $254,900
2012 YTD – 8 units sold – average price: $288,875
2013 YTD – 14 units sold – average price: $289,489
3-Year Change: Up 14%

Somerville Condos — 2BR/1ba, with 1 parking space
2011 YTD – 36 units sold – average price: $320,238
2012 YTD – 25 units sold – average price: $364,084
2013 YTD – 20 units sold – average price: $365,920
3-Year Change: Up 14%

Somerville Condos — 3BR/1.5+ba, with 1+ parking space(s)
2011 YTD – 34 units sold – average price: $594,951
2012 YTD – 47 units sold – average price: $533,663
2013 YTD – 37 units sold – average price: $603,634
3-Year Change: Up 1%

Somerville Single-family — up to 2000 square feet
2011 YTD – 22 units sold – average price: $382,125
2012 YTD – 36 units sold – average price: $426,656
2013 YTD – 27 units sold – average price: $484,185
3-Year Change: Up 27%

Somerville Single-family — larger than 2000 square feet
2011 YTD – 9 units sold – average price: $585,500
2012 YTD – 13 units sold – average price: $707,385
2013 YTD – 9 units sold – average price: $728,333
3-Year Change: Up 24%

Somerville 2-Family properties
2011 YTD – 46 units sold – average price: $495,582
2012 YTD – 46 units sold – average price: $539,378
2013 YTD – 48 units sold – average price: $671,705
3-Year Change: Up 36%

Somerville 3-Family properties
2011 YTD – 25 units sold – average price: $587,641
2012 YTD – 27 units sold – average price: $585,974
2013 YTD – 15 units sold – average price: $732,400
3-Year Change: Up 25%

Last week Standard & Poor’s Case-Shiller home price index reported increases in every one of the 20 markets it surveys — the composite increase was 10.9% — the largest gain in seven years. Thought you might want to know about our market specifically, so will be running an analysis of various housing types, beginning with condos here…

Cambridge condo prices:

  • 2013 YTD — 293 units sold
  • Average price — $571,884 — an increase of 12.0% over the 2012 average price of $510,758

Somerville condo prices:

  • 2013 YTD — 142 units sold
  • Average price — $434,502 — an increase of 8.4% over the 2012 average price of $400,852

Stay tuned for data on singles and multi-families…

 

It really pains me when I hear people reference “Zestimates®” of their homes. The Zillow algorithm for estimating a home’s market value may be a fun tool to play around with, but it is not an accurate indicator of value in our market.

So how off is it?

To find out, I took a look at a few recent Cambridge and Somerville sales and ran the properties through the Zestimator® to see how the numbers compared. Here are the results:

23 Harvard Street U:2, Somerville (Spring Hill condo)

  • Zestimate® says… $399,651
  • Actual sale price… $460,000 — 15% higher than Zestimate®

17 Tremont Street U:3, Cambridge (Area Four condo)

  • Zestimate® says… $463,581
  • Actual sale price… $538,000 — 16% higher than Zestimate®

48 8Th St, Cambridge (East Cambridge 2-family)

  • Zestimate® says… $529,504
  • Actual sale price… $440,000 — 17% less than Zestimate®

The net? If you really want to know what your home is worth, have a local agent come out to visit and prepare a comparative market analysis — you can read more about how I personally handle pricing in my post on the topic.

About a month ago I was interviewed by a writer for Boston Magazine about what’s going on in the Greater Boston real estate market. I gave her my two cents on the Cambridge & Somerville side of things, which you can read about in the article, which just came out today…

Boston Magazine: Getting in the Game

You can pretty much substitute “Cambridge,” “Somerville” or “Boston” every time New York is mentioned in this piece — same situation here. Very important that your lender works with experienced, LOCAL appraisers who know our market. Not sure? Ask your agent…

Getting Started – Assessing the Value of a Home | NYTimes.com

 

2012 was a crazy year for real estate in Cambridge and Somerville…

If you were out there as a buyer, you likely encountered multiple offer situations at every turn, and may have lost out on a property or two in bidding wars. Perhaps you even decided to bow out of the market for a while, given the frenetic pace and hyper-competitive conditions.

If you put your house on the market last year, you were probably very pleasantly surprised by the amount of interest, how quickly you received an offer or offers, and the price your property fetched.

And yes, I understand that many of you out there may not have been active participants in the 2012 housing market. So for you, here’s a bit of a rundown on what you missed.

Inventory was way down — On any given day in 2012, active inventory was down 40-50% in Cambridge and Somerville — this phenomena was seen for all residential properties –whether single-families, condos or multies– and spanned all price points. (And things haven’t yet improved in 2013 — see my related post.) But why? Well, it was partially due to fewer new listings, and partially because…

Demand was way up — This stemmed from a variety of factors including record-low interest rates, rising rents, and the renewed appeal of real estate as an investment. The result…

Multiple offer scenarios became typical — In fact, my post, “Dealing with a Multiple Bid Situation — Advice for Buyers & Sellers” was my top post last year — I just reposted it in anticipation of a similar 2013 market. And, to beat out the competition…

Many buyers came with cash, and many waived inspection contingencies — Obviously, not everyone is in a position to offer cash, and I caution buyers against waiving the inspection contingency, but those with deep pockets and a tolerance for risk made things very challenging for otherwise well-qualified buyers who require financing to buy a home. In any case, the net was that…

Prices were driven up — Econ 101: when supply is low and demand is high, prices go up. So after years of flat housing prices, 2012 brought significant increases throughout Cambridge and Somerville. The interesting thing, though, is that because of the way data is pulled from MLS, most media reports of the price increases don’t even come close to representing the extremity of these increases in our market. Allow me to illustrate…

Here’s an example of the 2012 increase in Cambridge condo prices:

838 condos were sold in 2012 (79% of all housing) at an average price of $510,758. The prior year, 714 condos were sold, with an average price $498,299. This is the simplest analysis MLS allows, and yes, it does shows the average Cambridge condo price in 2012 to be $12,459, an increase of 2.5%. Not so drastic, you might think. HOWEVER… this is not a true representation of the market.

To get a more accurate picture, I had to go in and manually slice-and-dice the data a bit further. I did this by taking a few sample condos a buyer might be looking for, and compared prices for these specific unit types in 2012 compared to 2011. And here’s what I found:

For a 1BR/1ba Cambridge condo without off-street parking:

  • 2012 average price: $327,009 (based on 91 sales)
  • 2011 average price: $306,066 (based on 93 sales)
  • $20,943 difference = 6.8% increase

For a 2BR/1ba Cambridge condo with 1 parking space:

  • 2012 average price: $435,344 (based on 84 sales)
  • 2011 average price: $358,278 (based on 57 sales)
  • $77,066 difference = 21.51% increase

For a 3BR/1.5+ba, with 1+ parking spaces:

  • 2012 average price: $889,191 (based on 81 sales)
  • 2011 average price: $795,826 (based on 82 sales)
  • $93,365 difference = 11.73% increase

See the difference? It’s quite extreme. And lest we forget our friends in The “Ville…

Here’s an example of the 2012 increase in Somerville condo prices:

In 2012, 459 condos were sold in Somerville, at an average price of $400,852. In 2011, 352 condos were sold for an average of $390,797. That’s a $10,055 difference, coincidentally, the same 2.5% increase as Cambridge data revealed. But a more granular analysis reveals:

For a 1BR/1ba Somerville condo without parking:

  • 2012 average price: $319,150 (based on 10 sales)
  • 2011 average price: $258,021 (based on 19 sales)
  • $61,129 difference = 23.69% increase

For a 2BR/1ba Somerville condo with 1 parking space:

  • 2012 average price: $346,008 (based on 59 sales)
  • 2011 average price: $303,180 (based on 55 sales)
  • $42,828 difference = 14.13% increase

For a 3BR/1.5+ba Somerville condo with 1+ parking spaces:

  • 2012 average price: $549,658 (based on 66 sales)
  • 2011 average price: $574,015 (based on 56 sales)
  • In this case, we see a decrease, but these results are skewed because of a few listings — trust me, most of the units I saw last year sold for significantly more in 2012 than they would have in 2011.

The net? We NEED more inventory so that we can get the market back to balanced! If you’re thinking about selling your home, or know someone who is, please get in touch — it’s for a very good cause!

And if you’re a buyer, hang in there! It’s a crazy market, but if your finances are in good shape, your expectations are realistic, and you’re truly committed to finding a home, your diligence will be rewarded — this is a great place to live and historically, our homes have retained their value.