Friday, October 24, 2008
Carlisle’s housing market is alive and well
Trying to sell a house in Carlisle these days could make you an object of pity. With every week bringing more bad news about mortgages, investments, and housing prices, you may wonder if there’s any chance at all. But Laura Baliestiero of Coldwell Banker has some encouraging words: “The Carlisle housing market is alive and well. Houses are selling and plenty of them.” “Sellers listening to reality are having good results and can sell quickly,” says Laurie Cadigan of Barrett and Company. Marguerite Widell of Carlson RE/MAX agrees: “If a house is well priced and in good condition, there are buyers out there.”
The key, she says, is modified expectations, “People need to retrain their thinking. Obviously, the market has changed. Buyers are looking for value and good condition.” Adds Baliestiero, “There is nothing wrong with the Carlisle housing market that the right pricing won’t cure. Buyers are buying when they perceive value.” Cadigan says, “Buyers are savvy. They are looking for value and afraid of overpaying.”
Statistics from the Multiple Listing Service (MLS) data base indicate that 48 homes have sold in Carlisle since January 2008, and 55 homes have sold within the past year. Of course, that’s only two-thirds of what sold in the heydays of 2004 and 2005, but it’s pretty consistent with the markets of 2006 (58 homes) and 2007 (64 homes). Of the 55 sold this year, 17 garnered over $1 million, and this also is consistent with the past two years; in 2007 18 were sold, and 17 in 2006 (in 2005 the number was 35).
Prices are down, but how much?
Price is the grease that keeps the machine running, and Carlisle sellers are learning to be very realistic. “Homes well priced are selling, and often with multiple offers,” says Baliestiero. “It is all about price in this market.” But finding the right level can be difficult, says Widell. “When I take a new listing, I tell the sellers to look only at comps [comparison homes] that have sold within the past three months. Prices are changing on a weekly basis.”
According to Banker and Tradesman, Carlisle sales since January 1 have averaged $800,000 versus $725,000 for the first nine months of 2007. A look at recent sales indicates, however, that there has been recent price erosion. While two homes purchased in 1999 and sold in September had escalated in price, two others purchased more recently did not do as well. A residence on Audubon Lane sold for $777,000, up from $564,000 in 1999, and a North Road residence sold for $660,000, an increase over the $505,000 originally paid that same year.
But a Bellows Hill home that sold for $730,000 had been purchased for $780,000 in 2003, and another Audubon Lane home sold in July for $1,150,000, down from the 2005 purchase price of $1,275,000. This is a small sample, but it indicates that homes purchased within the past five years are not always holding their values (prices are from the Mosquito archives).
Prices needed an adjustment
Cadigan says prices are definitely down, but “prices needed an adjustment. The Massachusetts economy was being affected by the lack of affordability.” Homeowners who bought in 2004 and 2005 “are seeing a considerable drop in value,” notes Widell. She points to a listing for $379,000 and asks, “When’s the last time we had a house in Carlisle below $400,000?”
On the land side, Town Assessor Melissa Stamps says prices are generally holding, and land assessments are likely to stay at $440,000 per two-acre lot. But premium price listings may need to become more realistic. Baliestiero notes that lots at the Applegrove development on West Street that originally listed for as much as $795,000 recently saw a 30% price reduction. Immediately afterward, “I had three offers in one week,” she says, adding, “There are buyers, and if they smell a deal, they’re out.”
Robust listings bring competition in mid-market
Another influence on price is the number of homes currently on the market. If a buyer has many opportunities to compare, the competition will tend to drive down price. “There are pockets of too much inventory,” says Widell, “and other [price points] at which we could use more.” She points to a home she recently sold in the mid-$700s that was in “wonderful condition” and says, “If I had more like that I could have sold it ten times over.”
Last year’s sales were fairly evenly split among three price points: 19 homes were sold at below $650,000, 19 were sold in the range of $650,000 to $1 million, and 17 were sold above $1 million. Currently there are 37 homes on the market in Carlisle, but the price distribution does not fit the even pattern of last year’s sales. Only six are priced below $650,000, 18 are in the $650,000 to $1 million range, and 13 are above $1 million, of which four are listed above $2 million. In the mid-range, nine homes are offered in the $800s, where five sold last year. If history is our guide, sellers of homes below $800,000 and particularly those below $650,000 can expect an easier time.
But only if those homes are in excellent condition, says Widell. In a competitive market, no one is looking for a fixer-upper. “I suggest a home be thoroughly cleaned and staged. You really want to put your best foot forward.”
Staging is recommended
Staging involves having a real estate expert suggest inexpensive improvements that will enhance the impression made on buyers. A homeowner may be used to the dim lighting, the fingerprints on the wall, the clutter on countertops, or the overgrown foundation plantings, but a prospective buyer will prefer the home that is light, airy, and well maintained. “A little investment goes a long way in this market,” says Widell. “In the old days you just put up a For Sale sign, but now it takes a lot more.”
If your house sits without interest for more than a few weeks, it is time to consider a price change, advises Widell. Baliestiero points to a chart of selling prices over the past year mapped against time on the market. It shows a proportionally decreasing trend line for price, the longer a property sits. On average, by the time a house has been on the market for six months, it will sell for 84% of the asking price. This year, average time on the market has stetched to 150 days, says Widell, and “many [homes] go through a few price adjustments, especially if they’re not in the best condition.” The chart illustrates the need to move property quickly and argues against a strategy of holding on to a price, hoping just the right buyer will happen along.
Mortgage crisis bypasses Carlisle
Compared to other communities, Carlisle is in pretty good financial shape. The mortgage crisis has not had as large an effect, and, according to Stamps, there has been only one recent foreclosure, a condo at Rocky Point. “We are fortunate we are in an area without much sub-prime lending,” says Cadigan. “People here are conservative with their finances.” While mortgage rates have risen, she points out, “these are not high rates. Mortgages are still very affordable.”
“[Carlisle buyers] seem to be more cautious,” adds Baliestiero. “These are not first time buyers. They have equity, and often buy less than they can afford.” She sees a trend toward downsizing, even when finances don’t dictate it. “It’s a lifestyle choice. People are less frivolous and more practical. They want financial freedom.” The downside of that practicality is that even million-dollar buyers “will walk away if the utility bills are too high.”
Buyers are still out there
So while the market is not great, Baliestero says “We’re still busy seven days a week.” With job transfers and lifestyle changes, “There are always people who need to buy. You need to convince them [your home] is an opportunity.” Widell notes that since the financial crisis, “I sold five houses in five weeks. There are still good buyers out there” and many are attracted to the current prices.
Cadigan says that this region is not as impacted by the downturn. “We’re in an area people really want to live in.” In fact, the greatest problem she has seen is that people trying to relocate here from other parts of the country cannot sell their homes. Widell agrees that the region retains its allure. “People like living where the schools and medical facilities are excellent,” she says. Certain basics never go out of style, “and one is a good home in a good town like Carlisle.”
Some advice from a buyer/seller
Bill Luther has ample experience in Carlisle real estate as both buyer and seller. Recently he and his wife decided to downsize and sold a home they built two years ago on Woodridge Road to buy another home in Carlisle that they will tear down to rebuild. Before moving into their Woodridge Road home, they had sold two others in Carlisle. He spoke to the Mosquito by phone to offer his advice to both sellers and buyers.
“The best business decision you can make is to use a local, trusted realtor,” says Luther. He values the advice of Marguerite Widell, who sold his three homes because “she is not afraid to give honest feedback,” especially regarding price. A local realtor, especially one who has lived in Carlisle, knows the town and is familiar with the market. Luther says many prospective buyers for his home were from out-of-state, and some were a little put off by Carlisle’s seclusion. A local realtor can allay those fears.
Having recently been a buyer as well as a seller, Luther says that first impressions really do matter. For a few hundred dollars, he suggests hiring a landscape company to mulch, spade, mow and generally clean up the property. “It’s short money to get a great first impression.” While you’re at it, he suggests, hide that rusty barbeque and clean up the yard trash. A thorough cleaning inside is also in order. While Luther is tolerant of a few kids’ toys around, he asks,“How many [homes] have I gone into and thought, ‘This is on the market?’ Dirty carpets, newspapers piled up, dirty dishes in the sink. . .”
He highly recommends the staging provided by a good realtor. “You feel comfortable in your house, but you don’t know what looks good” to an outsider. A stager may recommend rearranging pictures, moving furniture, and even adding some inexpensive pieces to give a better impression. After Luther implemented some of Widell’s suggestions, prospective buyers who revisited remarked on the improvement.
For buyers, Luther recommends reviewing comparable properties that have sold recently and bringing in an inspector to identify items such as heating, energy use, and roofing that could cost you later. If a home you’re interested in seems too pricey, he suggests negotiating improvements with the seller using the information gathered. “Offer to split costs,” he says. “Don’t go for the bottom dollar. Remember, the seller feels personally attached to this place.”
It took five months to sell Luther’s home. It has not yet closed, but he has received 98% of the assessed price, and pretty close to his asking price of $1,124,900. The couple who will buy his place are from Westford and had been looking for a few years. Buyers are watching the market, he says, and will pounce when they see a deal.
The most important factor is price. Sellers who think a home assessed for $1.1 million might get $1.3 million are sadly mistaken, says Luther “Those days of dreaming are gone and will be gone for awhile.” ∆
© 2008 The Carlisle Mosquito