75 Reed St, Lexington

Market Analysis for:

Charles Hornig & Ingrid Klimoff

I've done a market analysis on your home at 75 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.

Your home is a split entry home in a desirable location of Lexington with close proximity to the bike path, and walking distance to the town center and all the center has to offer.

According to public record your home has 1532 sq ft on the first floor and 798 sq ft in the finished lower level which totals 2330 sq ft. Your home was built in 1962, is on 0.26 acres, and has 5 bedrooms, 3 bathrooms and a 2 car garage. This market analysis is assuming paint throughout much of the home, floors refinished, minor repairs done as discussed.

As you walk in the front door you have the decision to go up or down the stairs initially. As you go upstairs you have the kitchen directly in front, with the open plan living room and dining room to the left, and the bedroom wing to the right. The living room has a wood burning fireplace in a fireplace with a stone facade.  The dining room has lots of light with double windows and is open to the kitchen. The kitchen has wood cabinets to the ceiling, white appliances and an older black dishwasher. If this fails before the home comes on the market I would recommend replacing it with a white one to match the remaining appliances.  A family room is off the open plan living/dining room and it has a half french exterior door, and access to the master bedroom suite. The master has double sliding door closets and an attached master bathroom. The bathroom is dated but will freshen up nicely with a bit of paint and some new sconces/mirror. In the bedroom wing there is a family bathroom with a tub/shower. 2 large bedrooms are in this wing.

Downstairs the floors are ceramic floor tiles, and there is a family bathroom with tub/shower. There are 2 large rooms in this area, 1 of which we should consider a bedroom. Toward the garage there is a large family room with another wood burning fireplace with stone facade, with a sliding glass door to the patio beyond. There is a utility room/laundry on this level. There is also internal access to the 2 car garage from the family room in the basement.


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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, and 66 homes in 2016.

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 $415 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 is in the 1960’s the average price per sq. ft. is $424.

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 $403 but it increases to $477 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 no 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 2,330 sq ft (including the finished lower level) | 5 beds | 3 baths | Lot size 0.26 acres | Built 1962 | 2 car garage

This colonial style home was built in 1953.  It is of similar size as your home with 2,107 sq ft of all above ground approx living area. Your home has 2,330 sq ft of approx  living area  made up of 1,532 sq ft on the first floor and 798 sq ft in the finished lower level.  This home has 1 less bedroom than your home, both having 4 bedrooms. It has less bathrooms than your home, having 2 full bathrooms. It sits on a larger size 0.46 acre lot on a busy street whereas your home sits on a 0.26 acre lot.
The main level has an open floor plan. The living room has a fireplace, beamed ceiling, double windows, crown molding, and hardwood floors. The dining area has crown molding, and hardwood floors. The kitchen has a breakfast bar peninsula, granite countertop, white cabinets, stainless steel appliances, ceramic tile floors, and exterior access to the deck . The main level also includes an office which has wainscoting, hardwood floors, and exterior access through sliding glass doors. The family bedrooms, including the master bedroom, are on the upper level and these bedrooms have hardwood floors, and beamed and vaulted ceiling.
This home has an attached 2 car garage and paved 10 car off street parking, and has forced air heating and central air cooling. It was listed for $775,000 and was sold lower than the listing price after 40 days on the market. Sold at $765,000.

Relevance: Less. Given this home's inferior location, less bathroom, smaller size albeit larger lot size I believe your home will sell for more than this home.

Your details: Living area 2,330 sq ft (including the finished lower  level) | 5 beds | 3 baths | Lot size 0.26 acres | Built 1962 | 2 car  garage

This home was our listing. This split entry style home was built in 1981.  It is smaller than your home with 1,812 sq ft of approx living area including a finished lower level and sunroom. Your home has 2,330 sq ft of approx  living area  made up of 1,532 sq ft on the first floor and 798 sq ft in the finished lower level.  This home has 1 less bedroom than your home, both having 4 bedrooms. It has less bathrooms than your home, having 2 full and 1 half bathrooms. It sits on a similar size 0.29 acre lot, your home sits on a 0.26 acre lot.
We painted almost every surface of this home in preparation for coming on the market and then fully staged the home.
Upon entry to the foyer from the elevated entry, the main level is up the stairs and the living room is off to the left and has picture windows and laminate floors. The living room has  a fireplace and is open to the dining area. The dining area has access to the sunroom through sliding glass doors. The kitchen has breakfast bar peninsula, corian countertops, white cabinets, and white appliances. The main level also includes 2 family bedrooms and the master bedroom. The master bedroom has an attached dated half bathroom and wall to wall carpeting. The family bedrooms also have wall to wall carpeting and use the shared dated family bathroom. The downstairs has a family room, a dated full bathroom and another family bedroom. These rooms also have wall to wall carpeting.
This home has an attached single car garage and 2 car off street parking, and has hot water baseboard heating. It has the steepest driveway I've ever encountered. It was listed for $649,000 and we had 14 offers on the home and sold it for $781,000.

Relevance: Less. Given that we plan to do the same thing to your home, and that your home is much larger albeit it is on a smaller lot, but you have a flat driveway I believe your home will sell for more than this home.

Your details: Living area 2,330 sq ft (including the finished lower  level) | 5 beds | 3 baths | Lot size 0.26 acres | Built 1962 | 2 car  garage

This home was our listing. This colonial style home was built in 1908.  It is of similar size as your home with 2,288 sq ft of all above ground approx living area. Your home has 2,330 sq ft of approx  living area  made up of 1,532 sq ft on the first floor and 798 sq ft in the finished lower level.  This home has 2 less bedrooms than your home, having 3 bedrooms. It has 1 less full bathroom than your home, having 2 full and 1 half bathrooms. It sits on a similar size 0.29 acre lot in the same neighborhood as your home, although it is on the corner of Reed and Bedford St which did bother some buyers, whereas your home sits on a 0.26 acre lot. The home was built in 1908 so it is a little scarier for buyers.
Upon entry to the foyer from the farmer’s porch, the options are to go upstairs on the right, left to the living room, or to the kitchen straight ahead. Access to the living room is through french doors and it has stained glass windows, and hardwood floors, and it has an open floor plan with the formal dining room defined by a cased opening. The formal dining room has a fireplace with brick facing, bay windows, built in china cabinet, hardwood floors, and is separated from the kitchen through french doors. The kitchen has a breakfast bar peninsula, granite countertops, cherry cabinets, pantry, high-end stainless steel appliances, and hardwood floor. It had recently been renovated and showed well. The family room is connected from the kitchen and it has double windows, hardwood floors, and exterior access. There is a dated half bathroom on this level.  The family bedrooms, including the master suite, are on the upper level. The master bedroom has walk in closet, an office space, wall to wall carpeting, and an attached dated bathroom. The family bathroom was also quite dated. The 3rd level is a bonus room which has a small office space, cathedral ceiling, and hardwood floors.
This home has a detached 3 car garage and 6 car off street parking, and has hot water baseboard heating. It was initially listed for $879,000 but we dropped to $849,000 before it went under agreement and was sold at $823,500.

Relevance: Relevant, but less.  Given this homes renovated kitchen, 3 garages albeit detached, similar location albeit on a busier corner, similar size, I believe once all factors are considered this home is relevant to your home but yours should sell for a little more.

Your details: Living area 2,330 sq ft (including the finished lower  level) | 5 beds | 3 baths | Lot size 0.26 acres | Built 1962 | 2 car  garage

This ranch style home was built in 1960.  It is smaller than your home with 1,872 sq ft of all above ground approx living area. Your home has 2,330 sq ft of approx  living area  made up of 1,532 sq ft on the first floor and 798 sq ft in the finished lower level.  This home has 2 less bedrooms than your home, having 3 bedrooms. It has 1 more half bathroom than your home, having 3 full and 1 half bathrooms. It sits on a larger size 0.42 acre lot whereas your home sits on a 0.26 acre lot.
The living room has a fireplace with a decorative facing, crown molding, bay windows, and hardwood floors. The formal dining room has china cabinets, picture windows, crown molding, chair rails, hardwood floors, and access to the sunroom and the kitchen. The kitchen has white cabinets, white appliances, crown molding, picture windows, laminate flooring, and an informal dining area. The master bedroom has picture windows, hardwood floors, an attached dated full bathroom. The family bathroom is also quite dated but fresh and clean.
This home has an attached 2 car garage and 2 car off street parking, and has oil heating and central air cooling. It was listed for $875,000 but was dropped to $849,000 after almost a month on the market. It went under agreement and finally sold for the lower price of $840,000

Relevance: Relevant, but less. Given the smaller size of this home, but additional half bathroom, inferior location on a busy street, and a more renovated kitchen I believe once all factors are considered this home is relevant to your home but yours should sell for a little more.

Your details: Living area 2,330 sq ft (including the finished lower  level) | 5 beds | 3 baths | Lot size 0.26 acres | Built 1962 | 2 car  garage

This multi-level style home was built in 1955.  It is larger than your home at 2,767 sq  ft of living area including a finished lower level. Your home has 2,330 sq ft of approx  living area  made up of 1,532 sq ft on the first floor and 798 sq ft in the finished lower level. This home has 1 less bedroom than your home, having 4 bedrooms. It has less bathrooms than your home, having 2.5 bathrooms versus your 3 bathrooms.  It sits on a larger 0.77 acre lot in a popular area, whereas your home sits on a 0.26 acre lot.
Entry to the foyer is through glass stained double doors. The foyer has a picture window and accent window to the cathedral ceiling, and hardwood floors. It leads to a music room on the left and the  living room on the right which has a fireplace with a brick facade to the ceiling, bay window, and hardwood floors. Leading to the formal dining room which has beadboard walls and picture windows, are custom built in china cabinet with glass sliders. The kitchen has a breakfast bar island, laminate countertop, bay window, informal dining area, skylights, and ceramic tile floors. It is full of light and has exterior access to the balcony to the backyard. A bedroom with hardwood floors and a full dated, but clean,bathroom are also on this level. The master bedroom and 2 more bedrooms are on the upper level and they share a half bathroom. The master bedroom has bay windows, walk in closet, and hardwood floors. The finished lower level has a recreation room with a kitchenette, and a full bathroom with a shower stall.
It has an attached 2 car garage and 4 car off street parking, central air and window AC cooling. It was listed for $949,900 but was sold for a lower price of $922,500.

Relevance: Relevant but higher.  Given this homes similar condition, larger living area, much larger lot I believe it is relevant to your home but it should sell for more.

Your details: Living area 2,330 sq ft (including the finished lower  level) | 5 beds | 3 baths | Lot size 0.26 acres | Built 1962 | 2 car  garage

This contemporary style home was built in 1963.  It is smaller than your home with 1,989 sq ft of all above ground approx living area. Your home has 2,330 sq ft of approx  living area  made up of 1,532 sq ft on the first floor and 798 sq ft in the finished lower level.  This home has 1 less bedroom than your home, having 4 bedrooms. It also has the same number of bathrooms as your home, having 3 full bathrooms. It sits on a much larger size 0.83 acre lot whereas your home sits on a 0.26 acre lot.
Upon entry to the foyer from a closed porch, one has to go up the stairs for the main living area is on the second level. The living room has a fireplace with a brick facade to the ceiling, beamed and vaulted ceiling, custom built ins, hardwood floors, picture windows, and has an open floor plan with the dining room. The dining room has a vaulted ceiling, picture windows, and exterior access to the screened porch to the deck through french doors. The kitchen has a vaulted ceiling, lots of off white cabinetry and storage, white appliances, and ceramic tile floors and is more modern than your kitchen. Up a few steps are 3 bedrooms and they share an adjacent family bathroom, have vaulted ceiling, picture windows, and hardwood floors. The entry level includes the family room which has custom built ins, picture windows, and wall to wall carpeting. It has access to the master bedroom which is also on this level and it has exterior access. It has an attached bathroom, vaulted ceiling, and hardwood floors. The home had been freshly painted throughout.
It has a detached 2 car garage and paved 5 car off street parking, and has hot water baseboard heating. It was listed for $899,000 but was sold for a higher price of $930,000 with competition.

Relevance: Relevant, but higher.  Given this homes superior condition of kitchen, much larger lot size albeit smaller living area, popular location I believe once all factors are considered it is relevant to your home but it will sell for more.

Your details: Living area 2,330 sq ft (including the finished lower  level) | 5 beds | 3 baths | Lot size 0.26 acres | Built 1962 | 2 car  garage

This dutch gambrel style home was built in 1942.  It is larger than your home with 2,540 sq ft of approx living area which does not include a finished lower level. Your home has 2,330 sq ft of approx  living area  made up of 1,532 sq ft on the first floor and 798 sq ft in the finished lower level.  This home has the same number of bedrooms as your home, having 4 bedrooms. It has 2 full and 1 half bathrooms whereas your home has 3 full bathrooms. It sits on a similar size 0.28 acre lot in the popular Manor neighborhood, your home sits on a 0.26 acre lot.
The main level includes the living room which has a fireplace with white mantel. The living room also has crown molding, recessed built ins by the triple window, and hardwood floors. It has access to the family room which has triple windows and hardwood floors. The formal dining room has crown molding, chair rails, a built in china cabinet, and hardwood floors. The kitchen has hardwood floors, white appliances, and exterior access to the deck via a french door. The master bedroom is on the upper level and has an attached bathroom and hardwood floors. On this level are 3 more family bedrooms and 2 of them having walk in closets, and they are all a great size. The finished lower level includes a playroom and has an exterior access to the backyard. The home had been freshly painted and is a traditional layout which buyers prefer.
This home is located in the Manor neighborhood. It has an attached 2 car garage and 4 car off street parking, hot water radiators heating. It was listed for $875,000 and was sold as is for $963,000 with competition.

Relevance: Higher. Given its larger size, traditional desirable layout, huge deck, large bedrooms I believe this home will sell for higher than your home.

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Pricing Recommendation

My analysis of the relevant homes outlined above suggests a final market value for your home of $840,000-$880,000.  

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 list 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 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 our listing at 15 Hayes Lane which came on the market for $649,000 and sold for $781,000, and 60 Gleason Road which came on the market for $875,000 and sold for $963,000. 

When homes are overpriced they end up sitting on the market and ultimately selling for less than market value, whereas homes priced realistically can often sell for well over market value. Competition is what will get us the highest sales price. 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. The challenge with overpricing is that the buyers are very educated – they go week after week to see homes in their price range so they KNOW what the prices are and what ‘feels’ right.

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

Determining the right price 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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