The competition buyers face this Spring season is unlike anything we’ve ever seen. Nearly all of what comes on the market is gobbled up immediately, leaving exceptionally low levels of inventory. But surprisingly, the data tells us that it is the buyers’ appetite — rather than sellers’ reluctance — that has changed.
A full year into the pandemic, what changes are structural? What changes are fleeting? In our predictions, we should focus on understanding demand, because supply hasn’t actually changed much. Plus, in these small markets, fleeting excess demand can be absorbed quickly, balancing the market in a matter of a month or two. That’s unlikely to happen until at least the late summer, though.
Record-Low Inventory
We wrote about low levels of inventory in the Lincoln, Concord, Sudbury, Weston, Bedford, Lexington, and Wayland real estate markets over the course of the pandemic here in July and November. Now that we are a few weeks into what would typically be the Spring market, inventory levels are actually down even further. With the exception of Lexington, inventory in the rest of our sample towns remains at less than half of what it has been the past 4 years.
Interest rates remain at historic lows. Segments of the economy are thriving. Our recent listings have gone under agreement immediately at or over asking. Our buyers have had success, but the climate both locally and across the nation is frantic and cut-throat.
Across the media, we’ve read reports relating to the low levels of inventory that pin the blame for this strong seller’s market both on increased demand and decreased supply. Covid keeps people wanting to stay in suburban homes and also increases folks’ appetite for space and land. Locally, however, the data is clear: plenty of people are selling, the issue is a bubble of demand.
How do we know? Because, while there sure have been anecdotes of sellers putting off their move on account of grown children home, etc. the level of homes sold actually ticked up. Significantly more houses have accepted offers so far this year than in prior years in Lincoln, Lexington, Wayland, Weston.
| March 5 | ’17 | ’18 | ’19 | 2020 | 2021 | Average 2017-2020 | Change | |
| Concord | Listings on the Market |
59 |
63 |
57 | 56 | 24 | 58.75 | 41% |
| Accepted Offers (Year to Date) |
20 |
36 |
31 | 46 | 28 | 33.25 | 84% | |
| Lexington | Listings on the Market |
34 |
32 | 47 | 47 | 36 | 40 | 90% |
| Accepted Offers (Year to Date) |
39 |
27 |
32 | 41 | 51 | 34.75 | 147% | |
| Lincoln | Listings on the Market |
16 |
13 | 10 | 19 | 7 | 14.5 | 48% |
| Accepted Offers (Year to Date) |
5 |
10 | 7 | 9 | 10 | 7.75 | 129% | |
| Wayland | Listings on the Market |
21 |
13 | 22 | 24 | 10 | 20 | 50% |
| Accepted Offers (Year to Date) |
25 |
25 | 27 |
32 |
27 |
27.25 | 99% | |
| Weston | Listings on the Market |
95 |
62 | 63 |
61 |
29 |
70.25 | 41% |
| Accepted Offers (Year to Date) |
28 |
34 | 20 |
19 |
29 |
25.25 | 115% |
Planning Ahead
In our small local markets, it doesn’t take much to dramatically change a particular segment. In 2018-2019 in Lincoln, a glut of $2M+ listings seemed to push prices down across the whole $1.2-$2M market, for example. It was only maybe 5-10 extra listings that rippled across the market for nearly a year. Because individual markets are small, but buyers often consider across the region, from, say Wayland to Bedford, disruptions to supply in one price band in one town can clump buyers around new listings and spark competition.
Low interest rates and Covid-inspired changes of tastes (towards space and away from close-quarters) have made the suburbs west of Boston both more desirable and more affordable. But whether the resultant price increases are lasting or fleeting is a question of whether the taste changes persist after Covid.