Somerville Real Estate Getting Too Hot To Touch - SNN #44

Somerville, MA, July 14, 2015 – The Somerville real estate market has been on the rise for several years. But this year’s spring market has both realtors and potential buyers shaking their heads. Claudine Kohick and her husband Evan rent an apartment in the city with their two young sons. They would like to purchase a home and settle down here permanently.

But it hasn’t been easy; the lack of available inventory and the frenzy of bidding wars have left them wondering about their next step.

They’ve been working with Thalia Tringo, president of Tringo & Associates in Davis Square. Tringo has been selling real estate in Somerville for thirteen years and she’s never seen the market as hot as it is right now.

“Starting in 2011 we started to see the number of competitive offers increase, 2012 more, 2013 more, 2014 more, 2015 more, I think this is probably the peak,” says Tringo.

Shane Marrion, owner of Benoit Realty puts it even more succinctly, “The market this spring has been intense.”

The Cohicks got caught up in a bidding war recently. Although they went in with what they considered a strong offer, eleven percent above asking price, a pre –inspection and a substantial downpayment, they were outbid and lost the house.

That level of competition is reflected in statistics compiled by the The Bean Group.

According to their report, the average price of a house in Somerville has risen almost 20% over the past year, peaking at $696,000 in June with selling prices averaging 105% above the asking price.

We met Marrion at a recent open house where he was showing a two family home to several interested buyers. With fourteen years experience in Somerville Real Estate he sees the same factors taking a toll on his clients.

“The average investor learns the hard way competing with a lot of cash buyers, a lot of no contingency buyers. They learn by losing out and then they start writing up stronger offers if they can. It becomes very frustrating for the average homebuyer to compete with some of the buyers in the market today,” he tells SNN.

Lucinda LaGasse visited the Benoit Open House as part of her search for a multi family home. She’s looking to combine an investment property with a home for her adult daughter. LaGasse shared her impressions of the market, “I started looking at multi family listings and was a little daunted by the ostensible demand for them. They seem to go on and off every week or two. Some of the properties I think are a little aggressively priced. But I will bid what I think I need to bid and see where it goes from here.”

What’s driving the Somerville Market? Tringo points out that the proximity to major universities, high tech firms and biomedical research has increased demand for housing in Somerville. The problem is there’s an almost a finite inventory of units in the city. Claudine sees The Green Line Extension project already affecting prices in the neighborhoods around planned stops. In the multi-family market there’s a new buyer driving the market. Foreign investors with cash to park are buying up multi unit buildings and collecting rents from overseas.

Both Marrion and Tringo counsel their clients to be flexible and patient. Marrion says buyers have to be prepared to sacrifice certain items on their wish list to get into the market. Tringo reminds her buyers that the real estate market is a pendulum, “The market goes up and the market goes down. So focus on – does it meet your needs, now and in the long term? Take the frenzy and the fear out of looking.”