Nick discusses the brand new Warren Report, Condo Edition which just launched this week! This Boston real estate market report features neighborhood level information that helps consumers who are looking to rent, buy, or invest. He also talks about some of the trends he sees in looking at the Q3 data.
We just launched The Warren Report - a quarterly market stats report for Boston real estate. Tell us about it.
The Warren Report is something I’ve wanted to create since I founded the company back in 2008. I am a bit of a data nerd and have always studied the markets closely. However, I also understand that not everyone is as into numbers as I am so being able to provide an easily digestible market summary like the Warren Report to our clients as well as our agents is something that is extremely important to me. The problem with a lot of the available data out there is that it can get overwhelming and actually be more confusing than helpful in many cases. What we are trying to do is take the most important data points and display them in an easy to understand one page summary for each neighborhood. This way someone can quickly see what is happening in the locations that they care the most about and make a more informed buying or selling decision.
Why do you think it is important to make sure consumers have the information contained in the report?
Real estate transactions, like many other things in life, can quickly become a very emotional experience. While emotions are obviously important, they can often cause people to make decisions that aren’t good for them. For example, we all have that friend who is dating someone that everyone can clearly see is not good for them, but they are too blinded by emotions to see the red flags for themselves. In that same vein, you can think of The Warren Report in the same way as a Match.com online dating profile. It gives you high-level information about a person (or in this case, a neighborhood) that allows you to decide, before becoming blinded by emotions, if it is a good decision to take a closer look or if you should move on to someone else who’s a better fit.
What are some trends you see as you look at the data for Q3 2018?
We are finally beginning to see some trends towards a more balanced market. Month’s supply in many neighborhoods is beginning to trickle up as well as days on market. Rising interest rates have played a roll in this and will likely continue to do so into 2019. The trend of 10-20% annual appreciation that we’ve seen over the past 3-5 years is not sustainable in the long term. We will begin to see it self-correct over the next 12-24 months to a more historical average of less than 10%.
I think the next 12 months will be a transition period where most sellers expectations will not be aligned with the market. Many will still be basing their pricing on anecdotal evidence from their friends who sold over the past few years and got 10 offers after the first open house vs. what the market is actually showing them.
Eventually, more supply will come on the market and will transition us to a neutral market (3-6 months supply) vs. the seller's market (0-3 months supply) which we’ve been in for the past 5 years. With this said, I don’t see us heading into a buyer’s market (6+ months supply) anytime soon as rates will likely still remain historically low and, even with all the new construction, we simply don’t have enough units to flood the market.