It is a bit late in responding but I just put together a spreadsheet for a client that may interest you. I have a listing for a home originally purchased in 2007 and wanted to see what trends there were, if any, on the resale value in 2009.
I looked at the past 12 months single family sales in Wellesley and focused on those properties that had previously been purchased after 2002. (Note: Some of us feel the market here has corrected itself back to 2004 or late 2003) At any rate, of the 219 sold properties 37 (17%) were previously purchased between 2003-2008.
It was a time consuming project as most of the data must be captured manually--but I found the exercise worthwhile. Of the 37 properties 19 sold for less than their previous purchase price. Only six properties were in the price bracket of $1-$1.3 and their gain/loss were as follows: -1.25% -4.63% -5.06%; 5.56%; 8.99%; 13.60%
The properties that saw the largest increase in value were the properties that had major rehabs completed...new kitchen, new baths, etc.
I think you should have a copy of the report so that you can draw your own conclusions. The number of homes sold within each bracket (whether by year or price) is so small that one wonders of its statistical significance, if any.
If you want a copy of the spreadsheet just give me a call or send an email.
When we look at ALL prices, a superficial reading would lead one to believe that prices are way down. Average price year to date $1,262,000 across all prices vs. $1,482,000 YTD 2008. This is because YTD 2008 we had 9 home sales over $3,000,000 and have only one $3mil+ sale YTD 2009. This will change soon as several very high end properties have recently gone under contract. When they close this summer prices will, once again superficially, appear to have taken a big jump.
To understand Wellesley pricing and fair market value you need to work with a buyer's agent who is based in Wellesley, or at least a surrounding town, who understands the subtleties of location, condition and hidden traffic or development issues. You also must look within a given price range and at specifically Wellesley price trends. National trends do not apply.
The fact is that while prices have stayed relatively flat, the number of transactions is down significantly. 50 closed transactions YTD vs. 95 during the same period YTD 2008. In the end, Wellesley is a really nice place to live, so many sellers would rather stay, wait and enjoy their home rather than take an offer that is simply not worth it to them personally. The value is what an able buyer is willing to pay as well as what a seller is willing to take.
Try to keep an open conversation going with your desired seller-- keep negotiations pleasant and don't burn any bridges. You just may find that each of you eventually softens a bit leading to a mutually agreeable price. Good luck!
The comments are more interesting than the blog posts themselves.
Obviously the wealthier towns have a different dynamic than the less wealthy towns, but it seems to me that a dramatic reduction in deal volume must eventually be accompanied by a decrease in value. That is, unless everyone in Wellesley bought their homes with cash and can afford to keep it even if they decide to move someplace else.
I'm beginning to think my family ought to rent instead of buying and just wait for the inevitable correction.
Absolutely certain :-).
Kathy, thanks, I'll have to look into the Case-Schiller Index for Wellesley.
$1,399,000 is outside of what we can afford, even if there is wiggle room. We're hoping to find something for $1-1.1M with an absolute max of $1.2M, but good luck with the sale!
Please ask your agent to show you my listing at 36 Stanford Road! Nicely expanded Porter Colonial in GREAT neighborhood. $1,399,000.
Good luck and remember to keep the conversation going. You don't want to get so wrapped up in the macro issues that you miss the best house for you.
I don't mean this to be critical, but after additional thought, I've concluded that comparing the average sale price in the $1-1.5M category from year to year is circular and therefore not useful. For example, I would not be surprised if you were to tell me that the average sale price in the $1-1.5M category in Wellesley was $1.275M back in 1980, but that would not be meaningful. It's almost like saying that the average sale price in the $1.0000M-$1.0010M category is $1.0005. It's a self-fulfilling metric. That said, your comments about the type and quality of homes are well taken.
What I would ideally like to see is an analysis of the change in price of homes which changed hands in 2006-2007 and again changed hands between March '09 and now without significant renovation in the interim. Such homes would provide a good internal control for the change in the market. There probably aren't enough such homes to do an analysis though.
"Yes, the fact that transactions are down indicates that sellers are not pricing at the level that buyers want."
I would say that this means the homes are worth less, period. Sure, many seller have the means to wait things out, just as we had. Yet they may want to move for any number of reasons, just as we did. When they do, the buyers will determine what they can sell for.
In short, American produce no products that can be sold to the rest of the world ergo are broke. Massive amounts of debt have provided the illusion of prosperity. Debt has now dried up revealing a gutted and useless economy ready to collapse despite record federal intervention.
Read this article dated today for the latest reasons to not own real estate:
I look at it this way. The majority of people own real estate..more than ever historically speaking. Very few people are without realty. Imagine a balance with the have realty on one side and the have no realty on the other. As nature always seeks a balance, alot of people are going to have to stop owning homes to effect a balance. This movement from home owner to non homeowner will create a massive downward repricing. We are in the early stages of this cascade downward with agents screaming, "now is the best time to buy!" the whole way.
Also check the graphs at my blog. They will be eye opening to say the least.
I have a few questions:
Regarding your 1,266,080 vs $1,242,937 analysis, it is not clear that those homes are truly comparable. For example, is the average house size similar for $1-1.5M homes sold YTD vs that price band in 2007?
Also, doesn't the fact that the number of transactions are way down mean that homes are overpriced?
Thank you again.
We are working with a Buyer's agent, and I have asked her this very question, but I would like more data from others. I certainly understand if you are not interested in providing this information since I am working with someone else.
Thanks for your reply. Although there is undeniably a conflict of interest inherent with virtually all buyer-agent relationships, we respect and trust our buyer's agent. Also, sites like Trulia and Zillow, along with the courthouse, provide some objective information.
More about us:
We recently sold a home in a community (not in Massachusetts) where our selling agent initially advised us that prices were flat since we bought the home in 2007. The market decided, the other hand, that we should lose money, and we eventually sold the home at a 20% loss. We don't mind that we sold at a loss because that's what our house, according to the market, was now worth. Can't beat reality. However, considering a move to Wellesley, we want to make sure we are buying a house that is valued properly.
With that in mind, here again is my question:
Is there anybody here with expertise in Wellesley real estate who feels that the market value of $1-1.3M Wellesley homes has remained stable or has appreciated since 2006-2007? If so, can you provide data to support that belief? I cannot find any such data using the resources available to me.
Go to the courthouse and get this info yourself to determine what has been selling.
There is no end to the abuses and fraud within the real estate industry.
I would be more than happy to assist.