39 Reed St, Lexington

Market Analysis for:

Ira and Susan Blieden

I've done a market analysis on your home at 39 Reed St 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 scrutinize the home for issues that, in my experience, will impact the price of a home making it more or less valuable. Then, I look at your current competition - the other homes that buyers in your price range will be viewing, to help determine your price.

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.

The home is a side entrance colonial that has been renovated and remodeled over the years. It is located on a quiet street very close to the bike path. It is walking distance to the town center, the High School and the town pool.  This analysis takes into consideration that painting and home improvement projects have been completed.  The home has 3 bedrooms and 3 full baths. It was built in 1928 and sits on .24 acres.  The home does not have a garage.

When you walk into the home, you enter into a spacious foyer with a coat closet on your left and a full bath on your right.  The bathroom has a stall shower.  There is a family den straight ahead with a 3 -season porch and a set of stairs leading to the backyard. The kitchen has high-end cherry cabinets and some stainless steel appliances. The kitchen has an opening to a large family room. There are cherry wood built-ins against one wall of the family room.  There is hardwood and recessed lighting throughout the main level.  The home has a central vacuum system throughout the house, new double pained windows and timed heaters in the bathrooms.

The living room is off the kitchen in the front part of the home.  A cherry wood built-in is against one wall. The stairs leading to the second level are at the far end of the room. The family bath is at the top of the stairs on the left hand side. One family bedroom is on the right. There is a staircase in the far corner that leads to the attic. It is unfinished and a great place for storage.

A second bedroom is located off the hallway on the left hand side. A room, referred to as the ‘Harry Potter’ room because of its unique roof design provides a bonus room for storage or quiet retreat. It was part of the renovation completed in 2016. The master bedroom is across the hall. It is a generous size room with hardwood floors.  There is an adjoining room off the master bedroom; which can be used as an office. There Is a semi walk in closet and modest full bathroom with a stall shower as well.  All the bathrooms in the home are modest and somewhat dated.

The basement is located off the kitchen. It is very bright because it is a walkout basement with lots of windows.  It provides a great deal of storage space. The washer and dryer are located in the basement. There is a sump pump there as well.  The original garage was converted to a storage room with easy access to the outside. There Is an exterior faucet along the side of the garage.
The roof was replaced in 2016 when the 3 season porch and Harry Potter room were added. The  Windows throughout the home were replaced then as well. The water heater and boiler are 8 years old.

Public records have the home at 2,372 square feet not including the unfinished attic and basement. The diagram below was sourced from public records and shows the square footage breakdown of your home.


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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 prices 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 single family home prices have been increasing steadily since 2009. 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 single family homes show that the $1M-$1.5M price-range is the most active in Lexington. The next busiest price range in Lexington is the $1.5M - $2M price range. This is an indicator that new construction is having a significant impact on the average single family home prices in Lexington. The number of new construction homes being built in Lexington in 2013 was 55 homes, 70 homes in 2014, 71 homes in 2015, 66 homes in 2016, and 55 in 2017.

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 single family homes shows us that the average price per sq. ft. in Lexington around the $800K price range is around $416 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 1920’s the average price per sq. ft. is $449.

The chart below shows that single family homes in Lexington of similar size to your home in the 2,000 square foot range, have an average price per square foot of $405 but it increases to $481 per sq. ft. when you decrease to the 1,000 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 homes in the $800K price range is zero supply showing a severe 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 2372 sq ft | 3 beds | 3 baths | Lot size 0.24 acres | Built 1928

This Garrison Colonial is smaller than your home with 2,208 sq. ft.; including a finished basement on .16 acres compared to your home with 2,372 sq. ft. on .24 acres.  It was built in 1970 compared to your home built in 1928. Neither home has a garage. Both homes have 3 bedrooms. This home has 1 full bath and 1 half bath which is less than your home with 3 full baths. The kitchen is very dated looking in this home with dark cabinets and white appliances. Your home has high-end dark cherry cabinets and some stainless steel appliances; which buyers prefer. Neither home has a garage.  This home has a more traditional layout than your home and is located in Follen Hill. It received an offer after 6 days on the market for just below asking.   This price point is very appealing to first time home buyers because  there is little inventory on the market in this price range and they  want to get in to Lexington. They are also very knowledgeable about the  market and bid accordingly.

Relevance: Less. Given its’ desirable location and its traditional floor plan that buyers tend to prefer; but its’ smaller sq. footage and lot size, this home would sell for less than your home. 

Your details: Living area 2372 sq ft | 3 beds | 3 baths | Lot size 0.24 acres | Built 1928

This home is much smaller than your home with 1,606 sq. ft. including a partially finished basement compared to your home; which offers 2,372 sq. ft. of above ground living. The lot sizes are similar; .22 acres vs. your home on .24 acres. This home was built in 1947 compared to your home built in 1928 with a couple renovations in the late 1990’s and 2016.  Neither home has a garage. This home has 4 bedrooms compared to your home with 3 bedrooms. One of the bedrooms/office is on the main level which buyers really like. It has 2 full baths with a tiled tub/shower compared to your home with 3 full baths which; are modest. This home has a white kitchen, granite counters and some stainless steel appliances. Your kitchen has dark cherry cabinets and some stainless steel appliances as well. Both homes have hardwood on the main level. This home has a traditional layout. It was freshly painted and presents very well.  It was on the market for 55 days before receiving an offer above asking but below it’s initial sale price. This suggests it was initially priced too high.

Relevance: Relevant, but higher. Given the smaller square footage but the layout, condition and generous flat backyard; this home is relevant to your home but would sell for more than your home.

Your details: Living area 2372 sq ft | 3 beds | 3 baths | Lot size 0.24 acres | Built 1928

This home offers 2,288 sq. ft. of living area; including an unheated bedroom on the third floor; which is less than your home with 2,372 above ground living area. This home sits on a larger lot than your home; .29 acres compared to your home with .24 acres. It has a 3 detached car garage at the back of the home. Your home does not have a garage. This home was built in 1908 and combines old world charm with modern style. Your home was built in 1928 and renovations were made to the kitchen, family room, 3 season porch and bonus storage space on the second floor.  Both homes have 3 bedrooms. This home has 2 full and one half bath compared to your home with 3 full modest baths. This home has a master suite with adjoining office and walk in closet. Your master bedroom an adjoining room that has a open area used as a closet and space that could be used as an office. The kitchen was renovated and has cherry cabinetry, granite counters and stainless steel appliances. There is also a breakfast bar peninsula. Your kitchen has cherry cabinetry, some stainless steel appliances and a pass through to the family room but it is not configured as a breakfast bar; something buyers like. This home had one price reduction. It remained on the market for 29 days before accepting an offer below the new asking price. This suggests the home was priced too high.

Relevance: Higher. Given the more traditional layout, larger lot and 3 car garage, this home would sell for more than your home.

Your details: Living area 2372 sq ft | 3 beds | 3 baths | Lot size 0.24 acres | Built 1928

This expanded Cape is similar in size to your home; 2,346 compared to your home with 2,372 sq. ft. but sits on a much larger lot than yours; .41 acres compared to .24 acres.  This home has a one car garage compared to your home with no garage. It has 4 bedrooms; one more than your home and the same amount of bathrooms; which is 3 full baths.  The bathrooms have been renovated and are very attractive whereas; your bathrooms are more dated.  The kitchen is open to the family room with a cathedral ceiling and skylight.  The kitchen has a breakfast bar, wood cabinetry, granite counters and some stainless steel appliances. This home is located close to Kinneen Park and Rt. 95; whereas your home is within walking distance to the bike path, town center and the High School. This home had one price reduction and sat on the market for 141 days  before accepting an offer well below asking.  This suggests the home was  priced too high initially.

Relevance: Higher. Given the larger lot size, one car garage, open floor plan and condition of the home, this home would sell for more than your home.

Your details: Living area 2372 sq ft | 3 beds | 3 baths | Lot size 0.24 acres | Built 1928

This Garrison Colonial is smaller than your home with 2,100 sq. ft. compared to yours with 2,372 sq. ft. of above ground living. It has a partially finished area in the basement and walkout basement. You have a large unfinished walkout basement. This home sits on a larger lot than your home; .3 acres vs. your home on .24 acres. It was built in 1948 compared to your home built in 1928. Both homes have had some renovations. This home completely renovated the kitchen in 2013; which included white cabinets, granite countertops, stainless steel appliances, a gas range and a new full bath and laundry area. It has 3 bedrooms and 2 full and one half baths. The master bath is very spacious Your home has 3 bedrooms and 3 full baths; which are all modest. This home has an open floor plan, light hardwood floors and lots of natural light. It is located on a busy street walking distance to Wilson’s Farm and public transportation. It has a very large deck overlooking an attractive backyard. Your home is located on a quiet street walking distance to the bike path and town center. This home was priced very competitively. It received multiple offers  within days of being on the market and sold for $100,000 above asking.

Relevance: Relevant, but higher. Given this home’s better condition and layout compared to your home’s better location and larger square footage, it is relevant but would sell for more than your home.

Your details: Living area 2372 sq ft | 3 beds | 3 baths | Lot size 0.24 acres | Built 1928

This home is larger than your home with 2800 sq. ft. not including a studio and office space in the lower level. Your home has 2,372 above ground living area. This home sits on a similar size lot  .23 acres compared to your home on .24 acres. This home was built in 1894. Your home was built in 1928. Neither home has a garage. Both homes have 3 bedrooms and 3 full baths. The baths are spacious, fresh and updated looking. The kitchen is open and has stainless steel appliances and granite counters. The home presents very nicely with gleaning hardwood floors, fresh paint and has lots of natural light. The home had one price reduction before receiving an offer 33 days later  at asking price.  The home was overpriced initially.

Relevance: Higher. Given the much larger sq. footage, overall condition and tasteful renovations; this home would sell for more than your home.

Your details: Living area 2372 sq ft | 3 beds | 3 baths | Lot size 0.24 acres | Built 1928

This home is smaller than your home with 2,305 sq. ft. compared to your home with 2,372 sq. ft.  This home sits on a similar lot size of .25 acres on a dead end street compared to your home on .24 acres. Neither home has a garage. This home was built in 1890 compared to your home built in 1928 and has been meticulously maintained.  It has 3 bedrooms and 2 full and 2 half baths. This is the same number of bedrooms as your home. Your home has 3 full modest baths. The master suite has a spa bath and private stairway. The kitchen was updated with quartz countertops, stainless steel appliances and a center island.  Both homes are located within walking distance to the bike path and town center. It received an offer 5 days after being on the market at asking price.

Relevance: Higher. Given similar size lots, living area and location but overall better condition and presentation, this home would sell for more than your home.

Your details: Living area 2372 sq ft | 3 beds | 3 baths | Lot size 0.24 acres | Built 1928

This home was one of our listings. It is a renovated Village Colonial that offers 2,497sq. ft.; which includes 198 sq. ft. of finished living area in the lower level. Your home offers 2,372 above ground living. This home sits on a smaller lot; .15 acres vs. your home on  .24 acres. Both homes have 3 bedrooms and 3 full baths. This home was built in 1901 but has been very tastefully updated. Your home was built in 1928. The master suite has a full bath with a spa tub. The other bathrooms have also been updated. The family bedrooms are spacious and very bright. The kitchen features Maple custom cabinetry, high-end stainless steel appliances, granite counters, a large gas cooktop and a huge pantry. The kitchen opens up to a large family room. Neither home has a garage. Both homes are conveniently located to the town center and the High School. This home received multiple offers and sold for way above asking. It was  marketed in the Spring when lots of buyers are out and was priced  competitively.

Relevance: Higher. Given similar above ground square footage and desirable locations, but the superior condition of bathrooms and overall layout, this home would sell for more than your home.

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Pricing Recommendation

My analysis of the comparable properties suggests a final market value for your home of $790,000-$830,000.


Given the current market dynamics in Lexington, I would suggest listing your home at the lower end of this price range to attract more interest and potentially multiple offers. If the market deems your home to be worth more than the listing price, then the price will be pushed over the market value of your home, and sometimes well over when we get multiple offers. You can see many examples of the homes above that came on the market for a lot less, and competition pushed them up to the price they sold for. The challenge in estimating a price for a home is ‘would this home have sold for this price if they had priced it higher?’ or was competition the driving factor that got to this price. Experience tells me that competition is why they sold for what they did, so we have to be careful with pricing. A couple of good examples of competition pushing a price higher than market value is: 6 Watertown St. which came on the market at $749,000 and sold for $850,000 and our listing at 15 Columbus St. which came on the market at $869,900 and sold for $945,000.  As we see time and time again, if the buyers consider the market value of your home to be realistic in relation to the asking price, then competition will push the price up higher and often over the market value of the home.
Competing offers occur when homes are priced realistically and the buyer community pushes the prices up over the market value because of competition.

I have to stress that these are recommendations. We would bring your home on the market at whatever price you deem to be appropriate.  

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.  Thankfully, your home will show fabulously in photos. 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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