Bidding Wars? Quick Sales? It's Happening!

The local real estate market is not universally slow. There are three exceptions that are making sellers (sorry, buyers) happy.

LITTLE DID TODD AND ARITA BASSO know when they decided this spring to sell their three-bedroom, two-bath Arlington condo what good fortune they'd have. The day after their first open house they had multiple offers on their 2,200-square-foot duplex, with several over the asking price of $499,900. Just a couple of weeks after showing the place, the Bassos were signing a purchase-and-sale agreement for $510,000, snagging themselves a cool $119,000 more than their 2000 purchase price.

Wait a minute. Home sales are down in Massachusetts and nationwide. People are losing money left and right on investments they thought were secure. Prices are plummeting, and foreclosures are up. Mortgages are so hard to get that buyers worry that 30 percent down, a high salary, good comparables, and even throwing in a first-born child won't be enough. How did things go so right for the Bassos in a market that seems so wrong to so many?

The duplex just happened to have the location, price, and condition it needed to overcome the bad karma surrounding real estate these days.

If this surprises you, many realtors explain that casual observers of the local real estate market don't pick up on its nuances. "What the media project in many cases is the overall marketplace," says Jayne Friedberg, an agent with Coldwell Banker in Brookline. "But Brookline can't be compared to, say, Lynn. People read that the market is terrible and think that means everywhere, but it doesn't." She does, of course, concede that "the market is not what it was. I'm not saying we're jumping up and down for joy, but it is what it is, and that's not as bad as is sometimes portrayed."

Lisa Drapkin, a realtor with Somerville's Coldwell Banker, agrees. "We spend half our time educating people that, yes, overall, the market is adjusting - but Cambridge and Somerville and many other communities are pretty darn stable. We're not seeing huge swings, highs and lows. Activity has slowed down a little bit, but not greatly, and prices are off only slightly, like maybe 5 to 10 percent from what we considered to be the height of the market."

Still, there are Cinderella stories like Todd and Arita Basso's. According to the couple's agent, Helen Friel with RE/Max Leading Edge, "To get multiple offers or go over your asking price, it's always a combination. You have to have all of those things: right neighborhood, right price, right condition. Those properties will sell, and sell quickly."

BAD MARKET
EXCEPTION NO. 1: Location

"One factor that helped us a lot was the town," says Todd Basso, a 37-year-old electrical engineer. "We're in Arlington, a block from Mass. Ave., a block from Hardy Elementary School, a 10-minute walk from Alewife, and right near the Minuteman Bikeway."

Realtors say that location is still the most important factor in selling a home. While the median selling price is down or stable in many Massachusetts cities and towns, in select locations it's up. (For examples, see "Going Up," next page.) A recent report by the Warren Group, a Boston real estate and research firm, compared sales for the first half of 2007 with sales for the first half of 2008. According to that report, the number of sales in Arlington decreased by 22 percent - from 153 to 119 - yet the median selling price actually increased by 6 percent, from $465,000 to $495,000.

Friel explains that the number of sales doesn't reveal the intricacies of supply and demand. "About a year and a half ago, there was excess inventory. There were maybe 112 single- families on sale in Arlington at one time. That was really the beginning of the bad market. Today, the total number of properties for sale in town is 105: 48 singles, 48 condos, and nine multi-families. Forty-eight singles is not a lot." And the houses are selling fast. Out of 43 single-families that sold from February to July of this year, all but one went before the crucial 90-day mark - and 18 were snapped up in less than a week.

Susan Russo, vice president and sales manager of Century 21 Commonwealth in Winchester, believes low inventory is keeping the market strong there, too. The Warren Group's report puts the number of sales in Winchester down by 11 percent, from 133 to 118, but prices up by 17 percent, from $649,900 to $757,500. "It feels almost like a seller's market in the past few months. Not across the board, of course," Russo says. "In higher-end communities, people who live in these towns typically stay in these towns. They might trade up, but they love living here, love the school system, love the proximity to Boston."

Cambridge's story mirrors that of Arlington and Winchester, with the number of sales down by 34 percent, from 62 to 41, but prices up by 8 percent, from $832,500 to $885,000. Inventory is relatively low there for a different reason, though, according to realtor Drapkin. "In Cambridge," she says, "there's a constant demand for the supply because of high turnover. People are often on their way to somewhere else; they've finished school, finished their residency, or are leaving for a better job, and someone else will always come in to take their place."

Paul Campano, of Keller Williams in Cambridge, agrees. "Cambridge will always be insulated to some degree, even if the economy's in the toilet. Harvard and MIT will always attract people; their enrollment isn't going to suffer, and for the most part, that's an upwardly mobile socioeconomic group." The city's diversity is also a factor, Campano maintains. "A lot of students and professors come from overseas, and they're billionaires in the US because the exchange rates are suddenly ridiculous. Their currency is worth a lot more here."

BAD MARKET EXCEPTION NO. 2: Price

"I was a little emotionally invested in this house," Todd Basso admits. "I wanted to price it higher than $499,900, maybe start at $510,000. But Helen [Friel] said that over $500,000 we'd be crossing a price barrier, which might reduce the interest level and bring less activity." Friel's advice paid off. "We set a price she said would interest people." (And, remember, they got $510,000 in the end.)

With price, as with location, in many cases the higher end is doing better. Like other tony areas, the Brookline market is resilient, says Friedberg, and for the same reasons: It's got a great school system and public transportation, it's a stable community, it's close to Boston and Cambridge, and it's got plenty of restaurants, shops, and services. "Three-bedroom, two-bath condos in the sevens and eights are selling if they're in good condition," she says. "And even well-priced houses in the $1.8- to low $2 million range have gone under agreement relatively quickly for close to asking."

Several agents agreed that creating a sense of urgency is key. Buyers must feel that if they don't act quickly, they'll lose their dream house - a feeling that was common at the height of the market. Setting the right price from the beginning can help drive that sense of urgency. "It's all about positioning now," says Russo. "Position a home so that it stands out among the competition. Even if it's priced just 5 percent below the average price for a home in that range, it will generate multiple offers, because buyers know a good value and they jump at it. Sometimes it will actually break the asking price, which brings it back up to what it might have been."

A lack of inventory can also create a sense of urgency among potential buyers. "It's not like in Florida, where there are years' worth of inventory to absorb," Russo says.

Paul Campano worked as the buyer's agent on a condo sale that went through in June not because it was priced below the competition, but because there was no competition. The place, on Tremont Street across from Boston Common, was a front-facing studio with an asking price of $359,000. Another studio, which went on the market first, was located on the back of the building but was priced at only around $325,000. "As soon as the first one sold," Campano remembers, "people flocked to this one. It was all timing, a confluence of events. A lot of them probably went in for the cheaper one and when they found it under agreement, the ones who were on the fence said, 'Ooh, that's gone. There's only one left.' " Campano's buyer made one of two offers that came in just days after the more expensive unit hit the market. The man ended up paying cash, $3,000 more than the asking price. "He's very happy, too," Campano says.

"From day one, you have to price the property spot on," he adds. "You can't start a little higher, then adjust. Those days are gone."

BAD MARKET EXCEPTION NO. 3: Condition

When the Bassos bought their condo eight years ago, the house had already been updated. "The only thing we did, besides painting, was put in central air," says Todd. "The home was in excellent condition, and we kept it very well, so nothing was in a state of ill repair." Still, they had seen enough HGTV to know they had to make it spick-and-span before listing it.

Arita, a 33-year-old nurse, decluttered the place, getting rid of "tons of knickknacks and little crap that people have hanging around their houses," Todd recalls. They sold or gave away couches and other items, because, he notes, "furniture tends to make a room look smaller." They freshened up the paint and repaired any scratches or chips that had accumulated over the years and made sure the yard had plenty of blooming flowers. "We made it look like something you'd see in a magazine," he says.

These efforts probably helped them edge past the competition, according to the realtors, who say renovation, updates, and staging can make the difference between a quick sale and weeks of languishing on the market.

Even in East Boston - an area that's often perceived as having hit harder times than, say, Newton - Tony Giacalone, owner of Tony's Realty, says demand is "very, very strong" for units that look Pottery Barn fresh. "Most of the housing that doesn't need work is in the form of a condo," he says. "And the condo market is really strong. In the last 60 days, probably 40 condos sold in East Boston. I've never seen any new construction in Eastie that won't go quickly if it's priced right."

This is true not just for lower-priced markets, but for the Arlingtons and Winchesters in the area as well. "One common factor," says Friel, "whether it's a single, condo, or multi, is the condition of the property. Today's buyer doesn't have the stamina to go through renovations, living with contractors for six months to a year. They'd rather pay a premium price for the property than deal with renovations."

Giacalone tells of a client whose house had gone more or less untouched for 30 years. "He spent six months thoroughly polishing it," the realtor says. "He painted windowsills, retiled bathrooms, replaced carpets. He didn't do a big gut renovation, but really mostly just cosmetic stuff . When he put it on the market in June, we had three offers. Why? It was vacant, incredibly clean, and just about every defect had been fixed."

Of course, as Drapkin points out, "the standards vary from community to community for 'fixed.' " In quirky Cambridge, for example, slightly slanting floors or a fi replace that needs repointing isn't usually a deal breaker, whereas a Wellesley house with the same issues may be considered a handyman's special. "But in the past decade," Drapkin says, "buyers have in general done less renovation themselves. Ten years ago, people wanted to do that sweat equity. It was almost embarrassing then to say, 'I'm not very handy.' Then it just became, 'OK, I'm just too busy for that.'"

That's why staging has become so popular, many realtors say. "I counsel people to get their houses in better shape," says Friel. "Bring in contractors if you need work done. Hire people to go in and stage the place, or hire a professional to clean it. Some houses will show better empty because of the lifestyle of the people living there - if they have three or four dogs, or lots of kids, for instance. With other houses, a buyer might not believe you if you tell them a queen-size bed will fit in the bedroom, but if you put one in there, they can see that it does."

"Whether it's a fact or not, consumers feel they're in the driver's seat," says Russo. "So they're very selective. They go into a property that needs work and know they can go look at 10 other things that will be in better condition."

Elizabeth Gehrman is a freelance writer in East Boston. Send comments to magazine@globe.com.

GOING UP

While the state's overall real estate market is sluggish, several communities have seen higher home prices in the first half of 2008 than in 2007 (though 2008 prices are in many cases still under 2006 figures). Some of the biggest increases in Eastern Massachusetts belong to:

MEDIAN PRICES FOR SINGLE-FAMILY HOMES

FIRST HALF FIRST HALF FIRST HALF
OF 2006 OF 2007 OF 2008
Brookline $975,000 $965,000 $1,065,000
Canton $493,000 $410,000 $463,700
Carlisle $850,000 $755,000 $850,000
Hamilton $510,000 $413,000 $550,000
Jamaica Plain $559,000 $440,500 $494,000
Norfolk $460,000 $405,000 $475,000
Salisbury $353,000 $251,000 $305,000
Sherborn $851,500 $640,500 $857,750
Southborough $690,400 $436,800 $533,000
Wellesley $932,000 $966,250 $1,084,500
West Newbury $652,500 $465,000 $570,000
Winchester $778,500 $649,900 $757,500

SOURCE: THE WARREN GROUP