condo in Central Square

Asked by Vivian, Cambridge, MA Fri Apr 4, 2008

I have been looking at a condo in Central Square in Cambridge. The seller is asking for what she paid in 2006 - $365K. She is unwilling to agree on anything below that. Do you think that it is a good investment and do you think the condo is worth the same as it was bought for in 2006? Do you think value of properties in Central Square will increase in the future?

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Jon Ernest, , Brookline, MA
Wed Apr 9, 2008
TRE - it's not on the market... and there's ways to look up if the owner refinanced or not... it's public information if you know where to find it.

Vivian - I didn't figure it out through zillow, I just know where to look. The 400 sq ft that are below grade is an interesting one, but it does add value to the property as usable space (how usable is "semi-finished")?. The area has some 900 sq ft newly renovated solds around the same price... It sounds like the price is in the ballpark, but it might be a little high depending on how much work it actually needs. Does "semi finished" mean it has 2 routes of egress and it's heated?

Prices peaked right before 2006, dipped last year, and have come back a little since, but I doubt the place is what it was worth in 2006. That being said, TRE is right, the seller could have payed below market in 2006. I suspect that the seller is probably being a little hopeful, but the fact of the matter is, if the seller won't accept a price below $365k... you certaintly can't hold a gun to their head and make them sell at your price. (I mean... you COULD... but that would be illegal, and an invalid contract because it was made under duress)
0 votes
Territory.c…, Agent, MA,
Tue Apr 8, 2008
Like I said before the person who is selling could have over paid for the place a couple years ago (john mentioned a mortgage of $325,000 but they may have refinanced and the loan amount may have increased) and so they are trying to sell it higher than the market value to avoid a short sale situation. We are seeing this a lot. Or they bought it at $365,000 and then put some equity into it and they are trying to break even. Other than that, could be that either the seller simply has their head in the clouds or the listing agent is not advising them properly. To your advantage, the longer it sits over priced the better your negotiating power.
Web Reference:  http://www.territoryre.com
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Vivian, Home Buyer, Cambridge, MA
Tue Apr 8, 2008
Thanks for both of your answers.

Another note, according to the Cambridge assessor's database, it's a 2bd/2bathroom.. but it's actually a 3bd/2bathroom. However, 400 sq ft and 1 bathroom of the 1400 sq ft are in a semi-finished basement.

Jon ~ I guess I didn't expect someone to actually look deeper into it, but I guess with Zillow it's really easy. To answer your questions, the condition isn't great. The kitchen is fine, but one bathroom is heh. I wouldn't say that it's a fixer-upper, but it could use some work. I don't know when it was last renovated.

With that said, does anyone have an opinion if this is overpriced?
0 votes
Jon Ernest, , Brookline, MA
Fri Apr 4, 2008
You kinda just did disclose the exact address .... even though it was bought for $365k it has a mortgage of $325.1k.. so there is some room to move on the sellers side (if they're willing). It was built a long time ago... how is the condition of the place now? Do you know when it was last renovated?

Most units in the area (that have sold) with that number of bed's and bath's are a little more than half the size.... but newly renovated, and roughly the same price...


"Do you think value of properties in Central Square will increase in the future? "
The answer is absolutely unequivocally yes, to do otherwise would be unprecedented.... but the real question for the old crystal ball is how long it's going to take to happen.... I truly believe that this flattening out of prices will not last as long as '85-'92... but who knows what else could go wrong next...
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Vivian, Home Buyer, Cambridge, MA
Fri Apr 4, 2008
It is actually in Area IV, which I know is not the safest part of Central, but I've been on the block where the house is located twice and it seems safe - some parents walking their children and also young professionals.

I'm not comfortable disclosing the actual address, but it's on Washington Street between Norfolk and Columbia and according to the Cambridge assessor's office, is assessed at a higher value than she's asking.
0 votes
Jon Ernest, , Brookline, MA
Fri Apr 4, 2008
Make sure you know Central Square well. There is a -Cambridgeport- side, A - mid-cambridge- portion, and -area IV-..... all of which are VERY different neighborhoods even though all Central Square.
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Territory.c…, Agent, MA,
Fri Apr 4, 2008
PS. I think this 1 bedroom in harvard square looks really nice ... If that seller keeps pushing back maybe you should consider this one:
http://www.territoryre.com/CC_Property.php?LIST_NO=70730994
Web Reference:  http://www.territoryre.com
0 votes
Territory.c…, Agent, MA,
Fri Apr 4, 2008
Central Square is a great place to invest. It is sandwiched between Harvard and MIT and those schools dump a lot of money into the area and aren't going anywhere. That said, you should never buy a place for the price the owner bought it simply because they are avoiding short sale mode. Sounds like she is sticking to her price not because it is the market value but because if she goes lower she will be in short sale territory which is not good. Now, in the case the property is actually valued at that price then it would make sense to consider buying at her price.

Bottom line, and i have had to advise my clients on this a lot recently because of all the short sales and foreclosures, don't feel pressured to buy the place because the seller has put themselves in a financial bind. Only buy it at that price if you absolutely love it/have to have it or if the price is in line with the market value.

If you are comfortable, post the address and I will tell you if it is over priced.
Good luck!
Web Reference:  http://www.territoryre.com
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