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The price must be right

More than ever, the starting figure is key to quick home sales

The home at 90 Ellison Park in Waltham has been on the market a long time. The home at 90 Ellison Park in Waltham has been on the market a long time. (Pat Greenhouse/Globe Staff)
Email|Print|Single Page| Text size + By Kimberly Blanton
Globe Staff / June 29, 2008

There is no glaring reason that this five-bedroom Colonial in Waltham has been on the market for three years.

The house has one unusual feature: It is situated at the back of the lot, so the expanse of yard is in the front. But it could be any large house in a groomed Boston suburb. It has 3,250 square feet, a sunroom, fireplace, second-floor balcony, updated kitchen, and finished basement, shiny hardwood floors, and an elegant built-in hutch. It's in "pristine" condition, its sales listing said.

The problem, said Glenna Gelineau, a Waltham real estate agent who has watched the tortuous history of the house, was that its initial list price was too high. When the real estate market began falling, it never caught up. It was first listed for $849,000, at a time when the sales market was still strong. Despite 15 downward price adjustments, the house apparently never hit the right number.

"They've been chasing the market down ever since," she said. Gelineau, who has been inside the house, said it "shows nicely." But, at some point, properties that languish that long without a sale are stigmatized among buyers and agents and become "stale."

The seller has now cut the price again, the 16th time, a $10,000 reduction to $534,900. Dave DiGregorio, the listing agent for the property, predicted the new price would attract an offer, because it's now priced "below market value."

More than ever, price is the single biggest determinant of how quickly a house will sell, real estate agents said. And in this challenging market, which is flooded with properties for sale, setting the "right price" is, paradoxically, more critical - and more elusive. Last month only 3,739 single-family homes sold in Massachusetts, the lowest sales activity for the month of May since 1990.

"The majority of things, unfortunately, are staying on the market way too long," said Marybeth Muldowney, owner of TradeWinds Realty Group in Norwell. The average days on market for single-family homes for sale in Greater Boston is 123 days, according to the Greater Boston Association of Realtors.

This sluggish spring market does have certain sweet spots: starter properties, such as condominiums and small single-family homes, move more quickly because they are now priced more to be affordable. They also appeal to first-time buyers, who do not have the burden of having to sell another home first. In contrast, subdivisions with houses priced around $1 million, especially in communities that don't have a track record of sales in that price range, are tough to sell.

And buyers know they have the advantage.

"You're either going to take my offer or I'm going to walk" was the attitude of Steve Pelland and his wife, Candice, recent buyers in Holliston. "We had set a budget, and that was it. I wasn't going over that by a dollar more," he said.

Buyers also have no patience for properties that are in disrepair.

A house's physical condition was sometimes a lesser priority for buyers during the boom. Many were willing, even eager, to compromise on a property's condition if they could snare one that was in the ballpark of what they wanted - enough bedrooms, in the right town, or with good proximity to services. If the house wasn't perfect, buyers reasoned that they would eventually be able to resell it for profit, since prices were rising.

Now the tables have turned. House hunters are emboldened to keep looking until they find precisely what they want, said John Szolomayer, a Century 21 Commonwealth agent in Holliston. If a property is in poor condition, sellers have to "get very aggressive on price" if they hope to move their house.

Szolomayer recently sold one client's house in a week. The explanation? The house "was spectacular," he said.

The four-bedroom house, built in 2000 in Deer Run, Ashland's most exclusive subdivision, was in mint condition and had high-end amenities galore, including radiant heat in the bathroom floors. It also had a gourmet kitchen, built-in Bose surround-sound stereo system with speakers in several rooms, and a master bath with an oversized Jacuzzi and romantic lighting.

Szolomayer said he persuaded his clients to list the house at a competitive price, which he determined was around $699,000. They were reluctant to go that low, so he laid out the case for it: the most expensive house to sell in Ashland in the past six months went for $685,000 and it was bigger than theirs, though it didn't have as much curb appeal. They agreed to his suggested list price, and it sold promptly for $689,000.

Norwell agent Muldowney said buyers are also more cautious, unwilling to take risks they would have leapt at in a rising market. Muldowney, for example, has sold just seven of the 18 houses - some are still empty lots - slated for a new development along the North River in Pembroke.

All the houses are large and have three-car garages. They share a communal boathouse, docks, and a boardwalk along the river. But their prices, from $975,000 to $2.5 million, are higher than other houses in Pembroke, a middle-class town with a median single-family price of $350,000 in May. The houses in this subdivision also face a lot of competition, because there are so many others also for sale in nearby communities that have a proven track record of sales in higher price ranges.

"We're really reaching in terms of trying to create the value and get people to realize the property is worth $1.5 million. None of the other subdivisions have the amenity of the North River," Muldowney said.

No two houses are alike, and any property that sells must appeal to someone's particular tastes. But in this market, sellers are more successful if their house or condominium fits into the market for "the perfect buyer." Perfect buyers are typically first-timers who don't have another house to sell. They also can qualify for mortgages with 5 percent down payments, giving them a financial advantage in the midst of a credit crunch that has shut out many buyers who would need to have larger down payments.

Agents said that houses that are more affordable are appealing. Waltham has properties in all price levels, whether houses or condos. But Gelineau said there are many more condos for sale, and they're selling faster than houses, particularly to young professionals. If two properties, a house and condo, are the same price, the condo, which is probably either recently built or converted, will bring in more bids, she said. The buyers can get an upgraded kitchen, two bathrooms, and a condo with 1,400 square feet - the size of a small house.

Boston-area condos are typically on the market about 108 days, 15 days less than a house.

"For the young professional it's more attractive, less maintenance," she said, adding, "It's brand new, as opposed to something you really need to marry every weekend."

Kimberly Blanton can be reached at blanton@globe.com.

What's selling

Mint condition homes

Smaller starter homes

Newer condominiums

Bonus points

Standout amenities

Fresh finishings

Priced at or below market

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