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Cocky sellers have a case

Posted by Scott Van Voorhis April 15, 2014 09:39 AM

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Sellers could be getting ahead of themselves, this Wall Street Journal blog post suggests.

Nationally, asking prices for homes and condos have just hit a five-year high, even as the number of homes for hitting the market increases, the post notes.

So another case of greedy, out-of-touch sellers pushing crazy prices?

Well at least in the Boston area, probably not.

I took a closer look at the Department of Numbers stats referred to in the blog post, but narrowed it down to just the Boston numbers.

At first glance, it did indeed look like sellers might be getting a little carried away.

The median asking price for homes and condos in the Boston area is just under $370,000 as of April 14, up 5.7 percent from a year ago.

Yet the number of new homes and condos hitting the market over the past month rose more than 16 percent.

Deluded sellers? Maybe not.

Here's where short-term stats - like a 16 percent plus rise in listings - do not always mean all that much.

For starters, listings always go up in spring - real estate is a seasonal, cyclical business.

Yet even with the short-term increase, the number of homes and condos on the market right now in the Boston area is down 2.5 percent compared to last year, scrapping bottom at 16,834.

Maybe 16,834 homes and condos for sale sounds like a big number, but it's not.

In April 2006, there were 40,353 homes and condos on the market in Greater Boston, well more than double what buyers have to choose from now, stats collected by the Department of Numbers show.

When it comes to inventory, it has been pretty much downhill since then, with the number of homes for sale falling steadily over the past eight years.

The trend began as the real estate bubble began to burst and then accelerated with the onset of the Great Recession.

Since then, the economy has slowly picked up and buyers have gotten in the game. But the one thing that hasn't changed is dwindling number of listings on the market.

But sellers, by virtue of their scarcity, hold the cards right now.

This blog is not written or edited by or the Boston Globe.
The author is solely responsible for the content.

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Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

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