May I add “again’’ as this has been the same headline for the last few years at this time. We are definitely in a strong seller’s market, still.
Last year, we set a new record in average sales price for both single-family and condo sales. For single families, the number of transactions is the highest on record with the exception of 2002 (Cherry Hill Development).
But one must realize that prices could not have increased without an increase in transactions. This is basic Economics 101: Sales volume changes first, and only after that do prices change. This has been proven year over year and we are now in a strong bull market … the prices are being justified by the high number of transactions. And last year’s “days on market” for both single-family and condo are the lowest ever recorded (dropping like a lead balloon over the years).
Properties are selling quickly at the highest prices we have experienced. It’s not a strong market, it’s hot … look at these outstanding numbers … for single families, the average selling price was 97.4 percent of its asking and 37 percent sold at asking or above; and condos had even better numbers, 98.9 percent of asking and 42 percent at asking or above.
On another note … . The city is losing rental units and quickly! Have you noticed all the construction on High Street between Green and Tremont?
There are four development projects that are under construction or near finishing. These buildings had been converted to rentals in years past but are now being developed to condos.
On that stretch alone, the city has lost 17 modest rental units to higher-end condos. In the last year, I have counted another 27 rental units that have or are in the process of being developed to condos as well.
There are also another 42 condos throughout the city being built that are new from the ground up. It is only a matter of time that the number of condo transactions will eclipse single-family transactions. At the time of this writing, there is an equal number of single-family and condos that are on the market.
The developers would not be building these high-end condos unless there was a demand for them. We are experiencing in greater numbers than ever before, buyers from outside the Greater Newburyport area that are downsizing to these condos.
They are the stereotypical baby boomers that are selling their larger home once the kids are out. They want new high-end housing with low maintenance near downtown where everything is walkable. And they are changing the demographics of the city. They are raising the price threshold for entry to Newburyport with an unanticipated and unintentional result of pricing out many first buyers.
As the number of households with school-age children continue to decline, so will the emphasis on the school budget. But on a positive note, the city should like this; as the newer condos replace the rental units, the assessed values will rise, providing more revenue.
Bill Barrows, who periodically contributes columns to The Daily News, has been a Realtor for 26 years. He can be reached at firstname.lastname@example.org.