Friday, February 18, 2005
In Carlisle, real estate prices hold for now . . .
To be a Carlisle homeowner these days is to live with market uncertainty. Will home investments be worth tomorrow what they are today? With news of jobs moving out of state, record-high home prices, and upward pressure on interest rates, is the bubble about to burst? Or will prices go even higher?
"So far the Carlisle market has stayed strong," says Phyllis Cohen of Barrett & Co. "Since December we've had some homes going under agreement with multiple offers. There are buyers out there." She points to statistics for 2004 showing the number of homes sold in Carlisle increased to seventy-five versus sixty-two in 2003. Average days on market was a respectable 84.5 versus 96 in 2003.
Last year was a very good year," agrees Charlie Blair of Carlton Real Estate. He credits steady interest rates and pent up demand from buyers who had waited to see where prices were going. Cohen notes that in 2004 buyers felt secure after a couple years in which war and the threat of terrorism had encouraged market pessimism. "The fall came and there was nothing new. The stock market continued to do well" and the economy seemed to be reviving.
Maura Ferrigno of William Raveis Real Estate notes, "Home sales continue to be strong for Massachusetts. In the single-family home market, last month's sales volume makes it the busiest December on record in the state's history." A Boston Globe article ("Is it High Time for a Reality Check?" 9/19/04) pointed to continuing low interest rates and a shifting of dollars from the stock market as factors contributing to steady demand and higher prices.
Carlisle prices moderate, then rise
Carlisle's average sale price in 2004 at $872,000 was a small increase over 2003's $867,000, but nothing like the 35 to 40 percent increases of a few years ago. Are prices beginning to moderate?
Looking at the 2004 sales breakdown it appears high prices continued to be asked and obtained. Only one home sold for less than $400,000, and it was advertised as a possible teardown in disrepair. On the other end, of seventy-five homes sold in 2004, twenty-three went for over one million dollars, with the highest price $1,650,000 for a new home in Great Brook Estates.
Sales were slow early in the year. From January through March, only 11 homes were sold, and from April to June, only another 15. By mid-June, the average sales price was a depressed $764,025 and average days on the market for homes sold was a somewhat high: 120, according to a Multiple Listing Service report. But by September 30, 30 more homes had been sold, and by year's end, another 19. Seven homes were sold in January 2005, and at that rate, first quarter 2005 will exceed 2004. (Note that sales dates lag acceptance of an offer by two to three months).
Ferrigno reports over the past six months, Carlisle's sales prices increased to an average $930,888, reflecting movement in the over-million dollar range. Carlisle Assessor John Speidel estimates prices are up 10% over last year. Although he sees higher-end properties moving slowly, "It might take a little longer to market, but values are not going down."
Days on market longer for high end
How long should sellers expect to wait for a buyer? In 2004, 26 homes were sold within one month, 30 more within 90 days, and 19 took more than 90 days to sell. Variability was great, with some homes whisked off the market in a day, and others sold only after a year or more of looking for the right buyer.
Higher-priced homes carried a higher risk of a long wait. A new home on Acton Street waited 520 days for a buyer — then sold for $1,200,000, a premium over the asking price of 1,069,000. A home on Buttrick Lane, originally listed for $1,975,000 was on the market for 444 days and sold for $1,475,000. Other homes on Buttrick Lane and Carriage Way waited eight months or more for buyers looking to spend in excess of a million dollars.
However, high price was not necessarily a deterrent to quick sale. Five homes listed for over a million dollars sold within thirty days. A new home on Carriage Way listing for $1,389,000 sold in twenty-one days for a premium price of $1,400,000. A home on Estabrook Road sold for $1,260,000 in nine days. And a home on Westford Street got its asking price of $1,325,000 in just five days (see below).
Lower priced homes tended to see less time on the market, but finding the right price — and luck — were just as important. Two homes that sold in January 2004 illustrate the point. The first, on Laurelwood Dr. was assessed at $564,000 and sold for $640,000. The other on Blaisdell Dr. was assessed at $537,000 and sold for $610,000. But the Laurelwood property had waited 217 days for a buyer, while the Blaisdell home sold in nine. The latter home attracted a decisive buyer who fell in love with the cul-de-sac location and acted immediately.
Sellers can increase their odds in the sweepstakes with the right pricing. "You must go with what market value is," says Cohen. "You shoot yourself in the foot if price is above what buyers anticipate." But even the experts agree pricing is more art than science. "You can't get them all right," says Assessor Speidel, noting he monitors selling prices and tries to keep assessments within 10%.
Assessments are meant to reflect the true value of real estate, but in a market where prices are rising, they often lag. A scan of variances between selling price and assessment indicates a significant number selling for 15 or 20% more than assessment. In addition, odd properties are obviously difficult to assess. A Concord Street antique, for example, sold for $635,000, 30% higher than its assessment of $478,300, while a small house of only four rooms sold for $400,000, less than its assessed value of $486,600. Speidel notes that selling prices lower than assessed value are often the result of disrepair or distressed selling.
Current listings reflect high prices
In Carlisle, there are currently 27 homes on the market ranging in asking price from $625,000 to $2,695,000 for a home built in 1749 on 7.4 acres. Of the total, 15 are listed for over $1,000,000. While this may seem a high number, it compares favorably to three years ago when multiple subdivisions, including Davis Road, Hart Farm, Carriage Way, and Buttrick Lane were coming on the market. At that time, of 25 listings, 21 were asking over $1,000,000.
Still, the problem of too much inventory on the high end remains. The average listing price is $1,170,854, considerably above the $872,000 average for what sold last year. A buyer with $872,000 to spend this spring would be able to see all the pertinent Carlisle listings in a day or two — there are only nine below that number.
Blair says high prices are changing the relocation equation, encouraging a trend toward relocating out of Massachusetts. He recently sold a $1.2 million home for a family relocating to Dallas Texas, where they were buying a similar home, but spending only $600,000. (It was jolting to accidently access an on-line real estate site for Carlisle, Pennsylvania while researching this article. There single-family home listings begin at $75,000). Currently there are six homes in Carlisle listed for over $1.5 million.
So the old problem remains. While land prices remain high, developers can't afford to build small. And without smaller houses or condos to downsize to, empty nesters with homes that might sell in the middle-price range stay put. "They can't downsize if they want to stay in the community," says Blair. "Where are they going to go?" He encourages towns to take action, "What I would like to see is as land comes available it's used for multi-purposes including moderate housing."
Blair sees prices on the higher end begin to have some downward trend. Cohen agrees there is a glut on the high end, and that the number of days on the market has lengthened over the past three years. But she is seeing more interest this spring, "There's good activity at $1.3, 1.4, even 1.5 million. Where it was slow, now there seems to be movement."
But another realtor has a different perspective. "It's a buyer's market right now. Prices are slipping." She believes sellers are asking too much. "Unfortunately, at the moment, the buyers are better educated on the market than the sellers."
Carlisle remains attractive
Cohen believes Carlisle has many strengths in attracting buyers. She says people are familiar with Concord and begin looking there, "but they're attracted to Carlisle for what they can get in acreage and home size." Also, "There's more new construction in Carlisle." She believes recent publicity, whether "This Old House," MCAS scores or our volunteer fire department, doesn't really impact perceptions. "Carlisle stands on its own for what it is. The school system is going to remain good. It remains very attractive to buyers."
There is a buyer for whom Carlisle is too quiet, one who wants town services or who needs "a hub." But Cohen says savvy buyers read the Mosquito and even hang out at Ferns before making a decision. If there's an aspect of Carlisle life buyers may question, it's often the name of the town paper. "They wonder if they're going to get West Nile virus if they move here," Cohen laughs.
© 2005 The Carlisle Mosquito