Boston Has A Housing Problem, But It?s Not What You Think
By Ian B. Murphy
Banker & Tradesman Staff Writer
Boston?s housing market is suffering, but not from the same highly-publicized ills as residential real estate in the rest of the country.
Banks are well capitalized and lending, and interest rates are at historic lows. The buyers are out there, but in Boston and the city?s suburbs, the market is suffering from a lack of inventory.
Potential sellers are withholding their properties from the market and taking a wait-and-see approach, hoping property values will in-crease. Others have taken their homes off the market to avoid inconveniences over the holidays.
The November 2008 inventory of single family homes has decreased 17 percent in and around Boston compared to last year, accord-ing to the Greater Boston Association of Realtors. The condominium inventory has decreased 21 percent.
?As the market shifted, there were sellers that were looking to get a certain price, and they have withheld their properties because they?re not in a position where they have to sell,? said John Dulczewski, executive director of the Greater Boston Association of Realtors. ?That is a particular frustration now because of where interest rates are. Buyers are being drawn into the market ... and there are people who are actively looking, but they?re frustrated by a lack of inventory coming onto the market.?
John Ranco, the director of sales at Gibson Sotheby?s International Realty in Boston, said he has tried to combat the perception that the market is flooded with housing, and only slashed prices will bring in buyers. He said his areas of business, downtown and the Back Bay, are always in demand regardless of the economic climate.
?It?s a case of the national news versus the regional data, which is much different,? Ranco said. ?The biggest strategy were using is we?re calling all our past clients over the last five years, and letting them know that we want to be the market update, not CNN. Good properties tend to sell.?
Condo inventory can only get worse, Ranco said, as there are few new buildings going up during the down construction market, and many current developments are becoming rental properties or commercial space.
?Over the next two years, there is really nothing new in the pipeline,? he said. ?We?re going to see nothing new coming onto the market for residential. Eventually, that pipeline is just going to end.?
Kathy Lewis, president of the Greater Boston chapter of the Women?s Council of Realtors, said the lack of inventory doesn?t reflect a flight from the market. Lewis said the trend is consistent with the usual delisting of properties over the holidays, as potential sellers seek to avoid complications during the stressful season.
?There are some areas that really have a real problem, but Boston is not one of them, and Needham is not one of them,? Lewis said. ?If something is priced properly it will sell. It?s absolutely a seasonal thing.?
The housing inventory should get a bump after the holidays and some sellers will lower their price, but that won?t be a cure-all. Both buyers and sellers need more certainty in the job and real estate markets for inventory to start to rise again.
?We need to see that resurgence of confidence on both sides to bring that resurgence to the market,? said Laurie Cadigan, broker and owner of Barrett and Company in Lincoln, Concord and Carlisle.
Cadigan said because buyers use the Internet to be better informed than ever before, they know what they want, what it should cost, and many are willing to wait to get it at the right price.
?There are a lot of my agents who have buyers that are sitting in the wings waiting for something special,? she said. ?Today?s consumer is very bright. They want things that are in great condition and priced reasonably. They come in with all the data, before we even speak to them.?