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The Cost of Pricing: How Technology, Psychology and Timing Impact Listing Value

by Bob Corcoran

Keeping expectations realistic can be a chore in Boston’s real estate market, which has exploded in recent weeks. Sales and prices cooled off for much of the early part of 2015, as weather kept many homebuyers indoors. The beginning of summer, however, brought concrete gains in sales numbers and in price. The available numbers further complicate the process of hanging the right price on a home.

Data gathered by the Greater Boston Association of Realtors showed strong year-over-year growth in sales numbers and how much consumers were willing to pay. Sales of single-family homes jumped 10 percent this June to 1,853, up from 1,683 at the same time last year. It was the second-highest June sales total on record, according to the GBAR, topped only by the 1,922 homes sold in June 2004. It also represented the highest year-over-year jump since sales increased 22.4 percent in 2013.

The month-over-month increase from May to June is particularly striking. GBAR pegs the number of single-family homes closed in May at 1,082, meaning sales shot up 71 percent in that timeframe.

The median selling price for single-family homes rose by 3.2 year-over-year, from $510,000 last June to $526,328 this year, establishing a new record high median for the month. Month-over-month, the cost of a single family home jumped 9.7 percent in May, when the median price was at $480,000. The number of homes selling for more than $1 million nearly doubled, from 163 in May to 305 in June, accounting for a substantial portion of the median home price increase.

Several factors can be attributed to the steady increase in prices. Improving confidence in the housing market and the economy in general, the continuing tightness of inventory and the eagerness of Millennials to shift from renting to owning – as well as older consumers looking to downsize and sell their homes while the market is hot and prices are up – all play a part.

For Messenger, the work comes in bringing her clients down to earth and reminding them that they’re outside the city proper. “Even homes in the closest suburbs like Arlington and Belmont and Brooklyn would get 10 or 20 offers on a property, and they could sell for $50,000 or $100,000 over,” she said. “You’re talking tens of thousands of dollars. When you get out to Sudbury, and multiple offers might be three or five and it’ll sell for $5,000 over, maybe $10,000. It’s not quite what people are hearing about, but when the media talks about the Boston area, it’s not specific. It really does vary from town to town.”

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