This spring an abundance of over asking offers has been pushing condo prices up in areas like Cambridge, Brookline and Boston. Buyers are purchasing properties with “extreme bids” in some cases in excess of $50,000 over the asking price. This type of activity is becoming more and more popular in today’s real estate market.
A recent study was conducted by a local market researcher, David Bates, for the period between mid March and mid April showing that there were 35 incidents in Boston where this type of extreme bidding had occurred. In nearby Brookline and Cambridge there were a total of 14 during that same time period.
The study indicated that the condos were of all types of condition and location that experienced these extreme offers. It didn’t matter if the home was in need of renovation or was in a less desirable location, it was happening all across the board.
The effect of a real estate market with such slim inventory is the cause for this type of activity. The shortage of condos available for sale is something Boston has been experiencing for a while now which has been adding the sense of urgency for buyers to pay what they are willing over asking to get the property.
The month between mid March and mid April showed that 100 condos were sold in Cambridge, Boston and Brookline. Thirty five of the 100 had sold for $50,000 over their asking price according to the MLS study. At least half of these homes sold for $25,000 over asking with most selling for some amount over asking.
Last year showed a similar trend although not nearly to the same magnitude. During the same time period in 2015 42% of condos were selling for at least $25,000 over asking while 21% were sold at more than $50,000 over the asking price.
The extreme bidding has nearly become a norm in many of Boston’s core neighborhoods. In some cases there has been offers exceeding $100,000 over asking. Cambridge had 62 condos sell for more than $100,000 over asking last year while Brookline had seen 38 of these.