Friday, March 1, 2002
Buyers wanted for Carlisle's million-dollar houses Demand high for scant mid-priced housing
The uncertainty arising from 9/11 combined with the slowing Massachusetts economy has caused real estate sales to slow over the past six months compared to the first half of 2001. But interviews with agents at each of Carlisle's three real estate offices reveal another reason for dragging sales: an over-abundance of high-priced homes and a scarcity of the under-million-dollar houses most buyers are seeking.
"Demand in the mid-range is very good," says Marty Nestor of Coldwell Banker Hunneman-Senkler. "I could sell many more homes in the $400,000 to $800,000 range if they were available." Phyllis Cohen of Barrett & Co. agrees, "There's not a lot of inventory in the mid-range. I could sell these homes all day long." Laurie Cadigan of Carlson Real Estate adds, "We really, really need regular old homes. People are actively looking, but they just can't find anything they can afford."
21 million-dollar houses
There are plenty of choices for buyers seeking million-dollar homes. The Multiple Listing Service (MLS) database of homes for sale in Carlisle in mid-February shows a stunning 21 homes in the million-dollar-plus range, and just three below that price level. According to Phyllis Cohen of Barrett, 17 of the 21 are new and four are resales. She also points out this doesn't include seven new homes on Carriage Way not yet listed. "On the high end, inventory has outstripped demand," says Marty Nestor, and Laurie Cadigan agrees, "There's at least a 12- to 24-month inventory of houses over a million dollars."
According to the MLS, in 2001, the best year for million-dollar home sales in Carlisle's history, 15 homes over
$1 million closed. The 21 homes now on the market represent a one- to one-and-a-half-year supply, assuming demand is as strong this yeara generous assumption considering there has been only one sale in this price range since December. By contrast, in neighboring Concord, a town nearly four times the size of Carlisle, there are currently only 17 houses listed for over $1 million.
Cautious buyers look for value
Job losses have not had a huge impact on sales. The large number of million-dollar homes on the market represents an influx of new housing, not of distressed selling. "The market is still very active with a large number of people looking. This is not what we saw in the early '90s," says Cadigan, when skyrocketing unemployment caused real estate sales to plummet. Nestor adds, "Real estate is more cushioned. There are more two-income families, and more accumulated wealth," so a job loss isn't as immediately devastating. "This economy has had a good nine-year run, so a setback isn't as threatening. There's no panic."
But an uncertain economy has reduced buyer confidence. Compared to the past two years, claims Cohen, today's buyers are "more cautious and they're doing their homework. They wonder where the market is going and don't want to pay too much." Nestor agrees. "It's a matter of confidence. When the stock market rose recently we saw a little burst of activity and more offers. But as it sinks, offers clam up." Cadigan notes, "Buyers don't know whom to listen to, and they don't want to make a quick move they might regret. They want to be sure they're getting value." Uncertainty in the high-tech industries has particularly affected the over-million-dollar market which grew rapidly over the past few years on the success of that sector.
Affect on prices uncertain
Realtors differ on the impact a slower market is having on prices. In the mid-range, it is still possible to receive offers over the asking price. A colonial listed for $729,000 the last weekend in February sold within a day. But quick sales are nonexistent in the million-dollar category, where average time on the market now stretches to six months. Nestor sees "downward pressure on price at the upper end [over $1.4 million] with some discounting off the original asking price." She notes a house that recently sold for $1,450,000 , down from the asking price of $1,495,000, and believes "resellers of newer homes won't get back the full cost of inflation and improvements." She sees "pressure on builders, but most learned their lesson in the early nineties" and have not gotten too extended. Cohen agrees, "I don't see them [developers] panicking. They can afford to wait a bit."
Cadigan believes prices will not drop much. "For two years we saw offers over the asking price. That hasn't happened since October in the over-million-dollar area, which has not been active for some time." She adds, " was a vibrant year before September. There's the cocooning factor. Families are more home-oriented and willing to put more money into a house. Prices won't drop dramatically, but buyers will want good value."
Cohen, on the other hand, believes prices for new houses are rising in Carlisle. She credits a scarcity of new construction in the Greater Boston area and the need to recoup high building costs. "Developers are more likely to add amenities. I'm not seeing flexibility on price. And Carlisle is still very affordable compared to Concord and other surrounding towns" where new housing may cost $2 million or more. "If a builder asks $1.5 million, he will get it."
Information provided by Carlisle Building Inspector Bob Koning supports the view that developers remain gung ho on Carlisle. Noting there were 26 building permits for new construction issued last year, Koning expects the same number this year. "Applications are going along," he says. "There's been no earth-shattering change." He has also received three applications for teardowns this year, a significant number given "Carlisle has very few teardowns as a general rule."
Carlisle: a magnet for the high-tech worker
While the large inventory of million-dollar houses is concerning, Cohen believes it is not a major problem. "Historically, we're just not used to seeing three or four subdivisions come on [the market] together," says Cohen. But history may not be the best guide. "Carlisle has developed a cachet" and, she believes it is now a magnet in a way it previously wasn't. "When people have the money," she says, "they come to Carlisle."
Cohen describes the typical Carlisle buyer as a young family trading up from a starter home in the Greater Boston area, or transferring from outside. "Carlisle has what they're looking for. It's convenient to jobs, the schools are traditionally strong, and it's scenic." Nestor expands on that picture. "Carlisle is attractive to the high-tech buyer. These are people to whom schools are very important." In addition, she claims, "They don't see themselves as typical suburbanites. They want something different from the typical anonymous suburb. They love Carlisle because it's interesting, with more personality."
So where is the market going?
"We expect a slower spring," says Cadigan. "There's uncertainty, and people are taking a wait-and-see attitude." However, she sees positive signs. "We've had many inquiries and opinions. We've been spoiled the past couple years with active Januaries and Februaries, but March is traditionally when revenues have revved up. Low interest rates are helping," she adds. "A fear of rising interest rates has spurred interest."
Cohen notes that her office, which is marketing the Carriage Way subdivision, received more calls in January than in four months last year. She says the market feels healthy. "It's balanced between buyers and sellers. Buyers are getting fair value, but not taking advantage." She believes that "Carlisle will remain strong. Barring an economic slowdown, or more terrorist activity, I think we'll see plenty of activity this spring."
© 2002 The Carlisle Mosquito