With so many people asking the question, "Is this the bottom of the real estate market in Jamaica Plain?", it is time to clear the air about whether or not things have changed over the past year. As little as 8 months ago, it would not be uncommon to hear a prospective Jamaica Plain condo buyer state something like, "the current owner paid $300,000 for it in 2005, so I am certainly not going to pay more than that."
It was a shared sentiment for buyers in Jamaica Plain that if a seller had purchased their property anywhere from 2004 to 2009, the resale value of the property should be equal to, or less than what they paid for it. Enter 2012 spring real estate market and these feelings are out the window. Many buyers have gone so far as to stop asking what the seller paid for it. Instead the new question is, "how many offers do they have already?"
As early as January of 2012, a very large percentage of the homes coming on the market in JP (Jamaica Plain), started receiving multiple offers (aka bidding wars). The frenzy began with condos and single family homes, and eventually caught on to multi-family homes, once developers got wind of the rise in home-buyer confidence. A majority of the homes that receive multiple offers, eventually sell above their asking price. What does this mean for buyers? Typically, a buyer would lose out on their first one or two offers. By the time they came around to the third property they loved, they were less gun-shy and ready to bid more aggressively. Though not the norm, there have been several cases where buyers were so sick of losing out on properties that they ended up grossly overpaying. I have heard examples of offers above the asking price when there were not multiple offers. I have also heard examples of buyers paying tens of thousands of dollars above the perceived market value because their intent is to live in the property for over 8 years. I really don't to hear about these stories. As a buyer agent, part of my job is to always make sure my buyers don't get too carried away in the frenzies that can occur and always keep in mind the true market value of a property when deciding where to cap off their offer. Otherwise, they won't so happy when they go to sell their condo down the road.
Why the sudden burst of excitement in the Jamaica Plain real estate market? Is this rebound a national phenomena or just a local one? One reason is that the existing inventory is less than the current demand, and as new properties have come on the market, they have been gobbled up quickly. Many people believe the reason is the historically low mortgage rates. I don't entirely subscribe to that theory as mortgage rates have been good for several years now. I do believe it is a factor, however. Another reason some folks subscribe to is that Jamaica Plain has historically been one of the city of Boston's best kept secrets. Until more recently several Boston residents had it completely off their radar. With a plethora of parks, locally-owned businesses, authentic restaurants, and easy public transportation, JP has many reasons to appeal to Boston residents both young and old. Another reason people have sought to relocate to Jamaica Plain is because of the people. JP residents tend to be fiercely intellectual, progressive minded, and diverse. It truly is a melting pot.
Whatever the reason the JP home market has been on fire, there are not too many signs of it slowing down. As a local Jamaica Plain and Roslindale Realtor, I love advising homebuyers and sellers in the area on how to effectively navigate their specific real estate needs. Whether you might be looking to find a buyer agent that can help you get a competitive edge, or you need a seller agent who has experience navigating a successful sale with multiple offers, I'd love to help with your buying or selling scenario. Please feel free to register on my website, www.JoshMuncey.com, or contact me at Josh.Muncey@gmail.com. The most important thing a consumer can do when choosing real estate representation is make sure they select someone with expert local knowledge. All real estate is local.