Thanks to a slow market, finding bargains on high-end homes is easy What does it take to buy a million-dollar home these days? Six figures.
Where it once seemed to defy the laws of gravity, the high-end home market in Massachusetts is enduring dizzying declines, whether in downtown Boston luxury condo towers or tony suburbs such as Sudbury, Manchester-by-the-Sea, and Lincoln.
“We are seeing houses that were on the market for much higher prices go off the market and come down several hundreds of thousands of dollars,’’ said Doug Carson, a real estate agent for Coldwell Banker Residential Brokerage in Lincoln. “Sellers who are motivated to take a large jump down could see multiple offers.’’
While the market for properties below $600,000 is increasingly active, the luxury market is still struggling. Sales are slow and sellers more open to negotiation or pricing their homes much lower from the outset. And foreclosures and short sales are on the upswing in upmarket communities, offering buyers another avenue for good deals.
“There are people looking to sell, there are people in over their heads with mortgages,’’ said Lois Krasilovsky, a real estate agent in Sudbury who owns homesbylois.com. “You are getting a good value from sellers who are pricing houses realistically in today’s market.’’
In Lincoln, Krasilovsky recently sold a house for $603,000 that was originally priced at more than $1 million in 2008. Krasilovsky said the owners of the 3,461-square-foot ranch had difficulty paying their mortgages and needed to sell. And in Sudbury, Krasilovsky had sellers who agreed to reduced their asking price by $1 million to an asking price of $2 million.
Whatever the reason, buyers looking in the upper end of the market can increasingly find nice homes at good prices.
In Manchester, a five-bedroom 3,071-square-foot cottage on University Lane is now priced at $849,000, down from the $1.14 million the sellers first asked in 2007. Perched on a rocky promontory near the ocean, the turn-of-the century cottage features period wainscoting and other details and sits on a spacious half-acre that was once part of an estate. It is assessed for more than $1 million.
Real estate agent Marianne Round said the sellers did not adjust their price fast enough to catch up with a constantly falling market.
“If it was positioned correctly at the beginning, it would have sold for more than it is on the market for right now,’’ said Round, a broker who works for Coldwell Banker Residential Brokerage in Manchester. “It’s stale in the eyes of the buyers.’’
Linda O’Connor, a broker-owner with REALPRO in Beverly, said the North Shore is suffering from a glut of homes priced at $1 million or more. Higher-priced homes stay on the market an average of 306 days, she said, although sales are picking up.
“It is even more a buyer’s market in terms of the [high-end] home in the North Shore,’’ O’Connor said. “There is some wonderful high-end stuff, it is just taking a long time to sell.’’
Up-market homes in affluent communities with good school systems, such as Newton, Lexington, and Concord, have held their values better than luxury properties in towns with less to offer, said Alex Coon, a Boston manager for Redfin, an online brokerage firm for buying and selling homes. However, steep discounts can be found, even in more exclusive municipalities.
For example, a four-bedroom, three-and-a-half-bath Colonial on Wilson Road in Lexington is on the market for around $1.1 million — about $400,000 less than what it last sold for in 2006.
“The economy is suffering,’’ Coon said. “Because there is more to choose from and less competition, it does allow you to get more for your money.’’
Although the housing inventory statewide has been shrinking for about two years, inventory in the over-$1 million price range is still plentiful, according to the Massachusetts Association of Realtors.
Even $1 million markdowns are not uncommon. About 140 sellers of single-family homes reduced their asking prices by at least $850,000 over the last 18 months, including some by more than $4 million, according to the Real Estate Cafe, a Cambridge-based buyer brokerage consulting firm. In many cases, buyers realized hefty savings through negotiations rather than waiting for a seller to reduce a home’s price, said Bill Wendel, the company’s owner.
Still, $1 million markdowns don’t guarantee a sale — 32 homes with slashed prices are still on the market, Wendel said.
This is a sign that buyers searching for a high-end home can be patient in search of value, Wendel said.
“Watch the inventory that is on the market, and don’t assume that there isn’t something in the shadow inventory that might be a better deal for you,’’ he said, referring to similar properties that are about to be listed on the market. “Luxury homes have such a large cushion that you can sometimes negotiate a million off.’’
Jenifer B. McKim Boston Globe April 11, 2010