When home choices are few, patience is a virtue
When Dianne Rauh and her husband decided to move from Switzerland to the Boston area, they figured $750,000 would get them and their five children into a nice house soon enough.
After more than a year, numerous trans-Atlantic flights, and pushing their budget limit to well over $1 million, they were still looking - and growing desperate. At one point, the Rauhs considered shelling out $1.5 million to buy and convert a rundown triple-decker into a single family. "It needed everything - flooring, wiring, plumbing, a new roof," Rauh recalled.
It may be a buyer's market out there, but some home shoppers aren't feeling too empowered by what they're seeing for sale these days. Nicer properties are off the market, as the owners don't think it's worth their while to try to command a premium while prices are declining.
"Starting a couple years ago, as prices started to go down, people would say, 'What do you mean my house is only worth that much?' " said Thalia Tringo, an agent with Coldwell Banker Residential Brokerage in Cambridge.
The good ones that do come up for sale get snapped up right away. And a property that languishes can make buyers suspicious there's something wrong with it, or that the sellers are being unrealistic about the price.
The numbers capture the slim pickings: There are 22 percent fewer single-family homes and condos for sale now in Massachusetts, 50,700 altogether, than in June 2006, according to the Massachusetts Association of Realtors. In the Bos ton area, inventory has declined by an even greater degree, although prices in the metro area have not dropped nearly to the extent they have statewide.
Such a limited inventory might seem unlikely with the proliferation of foreclosures and the fact many homes sit on the market going nowhere. But industry representatives said while the foreclosure crisis has led to a glut of properties and plummeting prices in some areas, the reality on the ground varies greatly from one neighborhood to the next.
"I've been saying all year that the market is very localized," said Susan Renfrew, president of the state real estate group. "There are certain areas of the state still experiencing a large influx of foreclosures, so they have higher numbers. But it varies town to town and street to street."
In the Boston area, strong demand for rentals gives sellers a backup option while they wait out the choppy waters of the market.
"A lot of people have the option of resting on the property until they get a better price," said Tringo, the Cambridge broker.
For some buyers, the home search has become a test of patience, with fewer listings and properties that still appear overpriced and in poor condition.
"They could have at least put a guardrail on the roof deck," Jason Taunton-Rigby said recently as he toured a Back Bay row house where a cramped one-bedroom condo was listed for $549,000.
To be sure, Taunton-Rigby, who has been looking for a condo near downtown Boston since January, is particular. He wants a roof deck, which he feels is essential to properly entertain in the city.
His agent, April Bradshaw of Coldwell Banker on Beacon Hill, estimated that three out of five condos have decks in the South End, Taunton-Rigby's preferred neighborhood. The trouble is few of them are on the market these days, Bradshaw said.
Being in a month-to-month lease has given Taunton-Rigby the luxury of taking longer than he expected, but the search is wearing on him. "Did I think I'd still be looking come the end of August? God no," he said.
At one point Alan Nawoj was more discouraged by his search for a condo in the Boston area. "Supply was so low that I basically had to wait for the next listing to come in," said Nawoj, a technology consultant. "Two years ago when I started looking, it was a different ballgame."
But Nawoj persevered. Last month he closed on a condo in Cambridge, for around $10,000 less than it was listed for when it was on the market two years ago.
The lesson Nawoj takes away from his protracted search is to be patient, but also prepared to pounce when the right opportunity comes along.
"It made me aware of how quickly you have to react," he said, recalling several occasions when places were scooped up before he even had a chance to make a bid. "I made an offer two days after this place went on the market."
In the end, perseverance also paid off for the Rauhs, the family from Switzerland that spent more than a year looking for a five-bedroom house. In July their cash offer won out in a bidding war for a large house in the Huron Village section of Cambridge. Now they're busy renovating the basement for additional space.
"There was tons of interest, but this time we got lucky," Dianne Rauh said.
Real estate brokers acknowledge that low inventory has made searching for a home more challenging.
"What's out there is what's out there," said Greer Tan Swiston, a real estate agent with Century 21 in Wellesley. "It's a little like bargain-basement shopping. You just have to have the patience to look for it."