We ran some data across our core markets this week to see where we stand as we enter the last 6 weeks of 2016. The industry uses a so-called “Inventory” statistic to differentiate between buyers’ markets and sellers’ markets. We appreciate this statistic because, once calculated, it is a rather simplistic way to assess the market’s health.
A market’s “Supply” or “Inventory” is calculated by dividing the number of active listings in a given market by the number of units sold per month, on average, over the previous 12 months. The result is the number of months it would take to sell off the inventory at the current rate if no new listings came on the market.
Buyer's Market: When there is more than six months of inventory.
Balanced Market: When there is between four and six months of inventory.
Seller's Market: When there is less than four months of inventory.
Across the board buyers have the advantage in the ultra luxury market ($3M+). Back Back, South End and Midtown are all hovering at a relatively benign 7 to 8 months of inventory. Meanwhile, Beacon Hill tips the scale at 17 months of inventory due to a surplus of new construction!
Perhaps not surprisingly, Beacon Hill topped the charts with the most expensive listing at $12,950,000 for one of the most coveted addresses in Boston, 6 Mount Vernon Place. Though currently just a shell, all permits are secured and the contractor is ready to start work once the new owner decides on the floor plan and finishes.
Looking at the luxury market, $1M - $3M range, sellers maintain control of this segment - with inventories well below 4 months. Only Beacon Hill, in the $1M-$3M range, offers a balanced market.
If you are considering putting your house on the market in the $1M-$3M range, now may be a good time to do so. On the other hand, those considering purchases north of $3M may be able to negotiate a compelling arrangement with sellers whose units have been stagnating.
If real estate is something on your mind at the end of the year, we’d be happy to provide you with more specific data to guide your decision making.
The charts below provide numerical evidence of the climate in Boston’s luxury real estate market.
Current Months of Supply
Current Inventory $1-3M Range
Current Inventory $3M + Range
*data was sourced from MLS on 11/15/16