Over Pricing of the Boston Luxury Real Estate MarketMay 17, 2014
We are beginning to see price reductions in high end condos and single family homes that were put on the market months ago and not sold. These Boston luxury homes were obviously priced by either over eager brokers or unrealistic sellers hoping to bank on shortage of inventory.
Inflated Current State vs. Level Future State
A combination of limited inventory and high demand often creates unrealistic optimism, forgetting that buyers are becoming more and more market-educated. This could turn into greed for some sellers, and Boston luxury real estate buyers are finally reaching their limit and saying “enough”. They are pulling back from unrealistic asking prices, and for most part, are stepping aside and waiting. This waiting game has caused some sellers, with the help of their Boston real estate agent, to price the property more realistically. We are seeing more newer properties priced to sell, or dropping the asking price where it should have been from the start.
Although demand still remains very high, buyers are having a hard time rationalizing and making sense of the prices. If a Boston luxury home is priced right and more realistically upfront, sellers are likely to receive multiple offers and gain more leverage in negotiations.
Higher and unrealistic pricing in the current Boston luxury real estate market will only result in properties lingering on the market longer than usual - both large, luxury units and smaller, boutique properties. Therefore, we will eventually see the market slow down and level out to more realistic asking prices.