NEWBURYPORT — We have all heard it constantly over the years: The real estate market is on fire; it’s a seller’s market; low mortgage rates; low supply; multiple offers, etc.
What we have experienced in the real estate market over the last few years is not your normal “low supply-high demand” occurrence. It has been on steroids and still is. Newburyport is on a tear and it’s been a perfect storm: This is the lowest inventory ever; highest demand ever; historic low mortgage rates; buyers moving away from Greater Boston; high quality of new construction being offered, and a great place to call home.
And we have all heard various stories of many multiple offers on properties going above asking price, buyers waiving home inspections, waiving appraisals and a new trend: Buyers adding escalation clauses to their offers (an escalation clause states that the buyer will pay a certain amount above the highest offer the seller receives with a ceiling cap).
Some of these clauses have caused selling prices to exceed 10% of asking. This strong housing market has led to continuous sales records.
Numbers don’t lie. This current market is crushing records. For single family homes last year, the average selling price was 14.84% over 2020’s prices with the lowest days on the market ever and for the first time ever, the average selling price was over the average asking price. Also, behind the raw numbers: Of the 186 sold, 133 received asking price or over, and 22 were over by at least 10%.
The condo market also performed well with the sale price eclipsing the asking price, and of the 168 sold, 141 received asking price or over and 20 were over by at least 10%.
And look at the past six years — the single-family home sales average is up 57% and condos are up 47%.
On a side note, an indirect result of low inventory and the effects of COVID-19 is the amount of home improvement work that has been created on existing properties — complete guts to small additions. As people can not find a place to move to, they stay put and improve their existing property. I noticed this past year over 45 dumpsters and construction sites in Newburyport’s South End alone.
As for the present year, I am confident that properties will see another 10 to 12% increase. At the time of this writing there are only 16 properties on the market in Newburyport; not a balanced market at all. A more balanced market in April would have the neighborhood of about 70 properties on the market. It will be another year of being a seller’s market.
Let me leave you with this thought: In May 2021, there was a house that received 21 offers after an open house. Good story for one buyer, but what happened to the other 20 buyers?
Bill Barrows has been a Realtor for 28 years and can be reached at billbarrows1@gmail.com.
