154 Bedford St, Unit 1, Lexington

Market Analysis for:

Lenore Korn

I've done a market analysis on your home at 154 Bedford St Unit 1 in Lexington and have prepared this document to help explain how I've arrived at a price for your home. I perform a market analysis and calculate a price taking into consideration a home’s location, size, configuration, number of bedrooms and baths, lot size and general condition. I also take into account your reported condition and how, in my experience, that will impact the price of a home making it more or less valuable. 

Contents

  1. Description of Home
  2. Market Dynamics
  3. Analysis of Relevant Properties
  4. Pricing Recommendation
  5. Marketing

Description of home

Please note that these comments do not relate to marketing, but are included purely to ensure that we have captured the information and reflect the major components of your home.

Your home is a condo located on a busy road, but walking distance to the town center.  It has 3 bedrooms, 1 bathroom, built in 1903, and according to public record is 1137 sq ft in size.  You reported your condition as a 6 with scratched hardwoods, but granite and stainless steel in the kitchen and the bathroom being ok.

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Market Dynamics

We have been experiencing shortages of housing inventory in Lexington over the last 5 years or so. There are always a number of buyers looking to buy in Lexington because of the strong school system, the community dynamics and vibrant downtown. People like the feeling of the downtown area, and want to stop and have a coffee, or have dinner at the many restaurants, or just watch the world go by, chatting with folks who are out and about. The Minuteman bike path and conservation areas close by pull those who desire an outdoor lifestyle while still remaining within commuting distance to Boston.

The Lexington market has seen increasing over the last few years given the limited inventory. The demand for homes in Lexington far outweighs the supply and each month a snapshot of available homes for sale shows the declining inventory levels.

Average prices in Lexington are well above average prices obtained in the peak of the market in 2005. Average condo prices have been increasing steadily since 2013. The real estate market downturn that existed for the last few years is well and truly over and prices are continuing to increase each year.

Sales distribution statistics for condos show that the $1M-$1.5M price-range is the most active in Lexington. The next busiest price range in Lexington is the $500K price range. This is an indicator that new construction is having a significant impact on the average condo prices in Lexington. 

Before reviewing the price per sq foot charts it is important to throw in a caveat of using the average as the definitive guide. There is wide variability among agents as to what is included in the living area reported in MLS. In some instances, agents will include a finished component of the basement in the living area and this is acceptable so long as how the living area is calculated is disclosed. Others report the living area reported in public record, which never includes finished areas in the basement, but note in MLS that there is a finished basement. To this end, it is important to review each individual listing to determine the ‘true’ price per sq. ft. of above ground living area, but we also need to factor into this when a home has a finished basement.

Reviewing the price per sq. foot charts for condos shows us that the average price per sq. ft. in Lexington around the $400K price range is around $390 per sq. ft. It’s important to note that the maximum price per sq. ft. achieved varies across most price ranges, along with the minimum obtained for each price range.

When the year built in the 1900’s the average price per sq. ft. is $359.

The chart below shows that condos in Lexington of similar size to your home in the 1,000 square foot range, have an average price per square foot of $412 but it increases to $444 per sq. ft. when you decrease to the  under1,000 square foot range. It is common across municipalities to see an increase in the price per square foot for smaller sized homes, as it reflects the minimum cost of a home in a town irrespective of the property size.

The chart below shows how many months’ supply of inventory there is in a given price range. It uses the assumption that given the same rate of sales over the prior 12 months, and considering current inventory available for sale, how many months it should take to sell the available inventory. This is referred to “Absorption” in the real estate world. 

Any price range where there is more than 7 months’ supply, we consider there to be an oversupply of inventory, also known as a ‘buyer’s market’. Anything between 4 – 6 months is considered a balanced market. Anything less than 3 months’ supply is considered a shortage of inventory on the market at this price range, also known as a ‘sellers’ market’. As can be seen, currently, absorption rates for all condos in the $400K price range are just over 2 month’s supply showing a shortage.

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Analysis of Relevant Properties

The following map shows the  homes that we believe to be of value in determining the price of your  home. Below the map you will find basic information  provided for each home including the price the home was  listed at, and the price the home sold at (if sold), the listing date, Days on market, Bedrooms, Bathrooms, living area size and lot size.  Noted for each home is a classification of Relevance which outlines whether we think the  property is valued Less (L), Relevant/Comparable (R) or Higher (H) than  your home. The notes for each home outlines the similarities and differences between  your home and the one being analyzed.

Your details: Living area 1137 sq ft | 3 beds | 1 bath | Built 1903

This is an older sale of a unit in a 3 family building. It has a 2 car garage. The home is smaller than your home.

Relevance: Less.
Given the smaller size of the home, in a 3 unit building, even though it has a 2 car garage I believe your home will sell for more than this home.

Your details: Living area 1137 sq ft | 3 beds | 1 bath | Built 1903

This is an older sale. This is a 2 bedroom condo in a multi unit development. It is smaller than your home at 1046 sq ft. Kitchen is dated.

Relevance: Less.
Given the smaller size of the home, one less bedroom, inferior condition I believe your home will sell for more than this home.

Your details: Living area 1137 sq ft | 3 beds | 1 bath | Built 1903

This is an older sale. It is smaller than your home with 926 sq ft, and has 2 bedrooms. It is one of the few condos in a 2 family building that have been sold in the last 2 years in Lexington. It has a 2 car garage.

Relevance: Relevant, but Less.
Given the smaller size of this home, one less bedroom, similar condition I believe it is relevant to your home but yours will sell for more.

Your details: Living area 1137 sq ft | 3 beds | 1 bath | Built 1903

This home is larger than your home at 1290 sq ft. It is in a multiple unit development. It has 2 bedrooms, and 2 bathrooms. It has a 1 car garage.

Relevance: Relevant
Given the larger size, 1 less bedroom but 1 more bathroom, along with a garage I believe this home is relevant to yours.

Your details: Living area 1137 sq ft | 3 beds | 1 bath | Built 1903

This is an older sale. It has 2 bedrooms and 1 bathroom and is smaller than your home at 940 sq ft. This is one of the few units in a 2 family home sold in the last 2 years.

Relevance: Relevant, but less.
Given the smaller size of the home,  1 less bedroom, similar condition, I believe this home is relevant to yours but yours should sell for more. 

Your details: Living area 1137 sq ft | 3 beds | 1 bath | Built 1903

This home is a similar size to your home but is in a multi unit development. It has 1 less bedroom, but 1 more bathroom.

Relevance: Relevant
Given the similar size versus the 1 less bedroom but 1 more bathroom, I believe this home is relevant to yours.

Your details: Living area 1137 sq ft | 3 beds | 1 bath | Built 1903

This is one of the few units in a 2 family home sold in Lexington in the last 2 years. It is close to the town center on a quiet side street. It has 1 less bedroom, 1 more bathroom and is a similar size to your home. It has a 1 car garage.

Relevance: Relevant, but slightly higher
Given the similar size, but with a superior location and an attached garage, 1 more bathroom I believe it is relevant to your home but it may sell just a little higher.

Your details: Living area 1137 sq ft | 3 beds | 1 bath | Built 1903

This home is an older sale. It is a similar size to your home at 1122 sq ft. It has 1 less bedroom, but has an additional half bathroom. It has a 1 car garage and was built in 2013.

Relevance: Higher
Given the similar size, but having an extra half bathroom, being in a superior location and being relatively new construction I believe this home will sell for more than yours.

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Pricing Recommendation

My analysis of the relevant homes outlined above suggests a final market value for your home of $430,000-$460,000.  

This analysis is not based on having viewed your home but relying on your interpretation of condition. For a more accurate estimate I would need to see your home.

When determining the right price - it all depends on your motivation and your risk tolerance level. We know that homes that are priced at the 'strike price' will sell quicker and may generate more than one offer.  I’m an excellent negotiator and know how to push a price up if we have the market activity. I also know that some sellers want to put their home on for a higher price than I might recommend, which I’m willing to do, so long as it is understood that putting the home on for more than the majority of buyers perceive its value, could mean that your home will have a much longer market time and sell for less than it should have had it been priced properly out of the gate.

I DO NOT DETERMINE THE PRICE - the market dictates the value - what a buyer is willing to pay. My job is to make sure that you have the best market exposure and that your home is positioned well in the market.   I do not believe in projecting more money than I think your home will sell for just to get your business.

My team and I know how to stage and market your home, and I understand its value, but I can only sell it for what the market or a buyer will pay. I strongly believe that a home should be priced compared to the current competition, not just on what has sold in the last six months.  At the end of the day, you will be competing for the buyers looking for a home like yours and in the same price range. You can do far more 'damage' to the resultant price we get for your home if we overprice. The prospective serious buyers will see your home within the first weekend of your home coming on the market, and they will have seen everything else in this price range.  In other words, the serious buyer knows what is priced well.  If they don't see value in your home at its listing price and are not motivated to make an offer, then they will move on and keep looking.  In times of increasing prices, it is often hard to predict what a home will sell for, but be assured that even if we price your home lower than what market value is currently, market dynamics will bring the price of the home up to where it should be.  Prospective buyers should walk in thinking the price 'feels right' and are motivated to make an offer in the short term, rather than letting several months’ pass.

It is important to stress the value of marketing your home to capture the highest price.  In times of low inventory, we know your home will sell by doing the bare minimum to market it, BUT that is not going to get you the maximum price for your home.  Key to getting the maximum price for your home is to prepare a comprehensive marketing plan that incorporates all avenues available to us to expose your home to the maximum number of buyers out there looking.  Exposure, and feet in the door, is what will get you the highest price for your home. Basic ratios help explain this.  If 10% of the buyers who walk in your door fall in love with your home, then if you only have 10 buyers walking in, then potentially there is only 1 buyer - if you have 100 buyers walking in your door then using the same ratios, you will potentially have 10 buyers falling in love with your home.  10 buyers will push the price up versus only one buyer.

 New statistics state that over 100% of potential buyers search the web as their primary search vehicle.  With historically low interest rates likely to increase and inventory at a 7-year low, there are still homes that do not sell in this market.  I’m making my recommendations to ensure that you are one of the sellers who will have success in the first month of being on the market, but optimally the first weekend.

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We look forward to working with you!   Please reach out if you have any questions at all about this market analysis or our plans to market your home! 

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