8 Great Rock Rd, Lexington

Market Analysis for:

Li Xing

I've done a market analysis on your home at 8 Great Rock Rd 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 located on a culdesac in a popular area of Lexington.

The home has 4 bedrooms, 3.5 bathrooms, 2 car garage, built in 2002, hot water baseboard heat and is located on 0.29 acres backing onto Route 2.  The home has 2266 sq ft of above ground living area with approx. 986 sq ft in the finished lower level totaling 3252 sq ft.

The home has a lovely front farmers porch which wraps around to the side entry door off the kitchen. As you walk in the front door you have the dining room on the right hand side, and a hall leading to the living area in the rear of the home.  The dining room has a chair rail, crown molding and a cased opening into the kitchen area.  The kitchen has white cabinetry, laminate counters, mixed appliances and ceramic floor tiles. It has a small breakfast bar island, an informal dining area and is open to the living room. From the kitchen there is a side entry door and a pantry closet. From the informal dining you have a set of stairs going to the basement and up to the second floor, along with the hallway with garage access and a half bathroom. The half bathroom is fresh with laminate counter vanity unit. The living room has great light with triple windows.

Upstairs are wall to wall carpets, with 4 bedrooms including a master suite, family bathroom and laundry. The master suite has been freshly painted, and has a walk in closet, double closets and large master bathroom with jacuzzi, single vinyl shower, single laminate counter vanity.  The family bathroom has a laminate counter vanity, vinyl shower/tub.  The laundry is large enough for a side by side washer/dryer with ceramic tile floor.

 Downstairs to the lower level you have 3 large carpeted rooms. 1 room has a half French door leading out to the backyard and 2 of the rooms have large floor to ceiling glass panels between them. There is a full bathroom with a small shower and small white vanity.


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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 $1M - $1.5M price range is around $385 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 before the 2000’s the average price per sq. ft. is $359.

The chart below shows that single family homes in Lexington of similar size to your home in the 3,000 square foot range, have an average price per square foot of $385 but it increases to $397 per sq. ft. when you decrease to the 2,000 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 $1M - $1.5M price range are just under 1 month’s 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 3,252 sq ft | 4 beds | 3.5 baths | Lot size 0.29 acres | Built 2002 | 2 car garage

This expanded cape home was built in 1930, yours in 2002, and located in  the Turning Mill neighborhood. It is larger than your home at 3,986 sq  ft all of above ground living area. Your home has 3252 sq ft of living  area including the finished lower level. This home offers 5  bedrooms which is 1 more than your home. It has 3 bathrooms which is 1 half bathroom less than your home. It sits on a larger size  lot of 0.75 acres, yours at 0.29 acres backing onto Route 2. The main level includes the  living room, which has a fireplace. The dining room has a china cabinet  and a bay window. The family room has a slate floor, a cast iron stove  for heating, built-in shelves and bench, and exterior access to the  patio. The kitchen, also on this level, is a little dated and has a walk  in pantry. An indoor garden room has a vaulted ceiling, and an open  floor plan to the dining area. All of the bedrooms are on the second  floor including the master bedroom. It has a master bathroom with double  vanity sink with white cabinets, and shower and tub, and his and hers  walk in closets. This home has an attached 2-car garage, as yours does.  It was listed for $925,000. Its price dropped to $859,950 before it went  under agreement but was sold at its original listing price of $925,000.  It is a foreclosure and is in rough shape.

Relevance: Less
Given its inferior condition, but superior size I believe your home will sell for more.

Your details: Living area 3,252 sq ft | 4 beds | 3.5 baths | Lot size 0.29 acres | Built 2002 | 2 car garage

This home is larger than your home at 3600 sq ft which includes a finished lower level. Yours is 3252 sq ft which includes the finished lower level. It has 1 more bedroom than your home at 5 bedrooms and has the same number of bathrooms. It is on a smaller lot than your home at 0.16 acres. It also has a 2 car attached garage. The home is on a busy street, yours backs onto Route 2 so each have noise associated with the road, but yours is easy to get onto the road from your garage. The entry into the home is via a 2 story foyer with a family room in the lower level with access to the garage. Walking up the stairs you come to the main living areas. The kitchen has modern white cabinets, stainless steel appliances and is open to the dining room. There are 2 bedrooms on this level, 1 being the master bedroom which has dual sink vanity and separate toilet. The master bathroom is huge, with marble throughout and has recently been renovated. The other bedroom on this level only has access to a half bathroom. Upstairs to the second level there are 3 bedrooms with 2 bathrooms.

Relevance: Relevant
Given the larger size of the home, 1 extra bedroom, superior condition, inferior location I believe this home is relevant to your home.

Your details: Living area 3,252 sq ft | 4 beds | 3.5 baths | Lot size 0.29 acres | Built 2002 | 2 car garage

This home is larger than your home at 3648 sq ft which includes the full walkout lower level, yours is 3252 sq ft which includes the finished lower level. It has 1 more bedroom than your home at 5 bedrooms, but has 1 less bathroom than your home. It is on a much larger lot than your home at 1.31 acres, yours is 0.29 acres. The home is in great condition with the kitchen having stainless steel appliances, granite counters and is open to the dining room. Both levels of the home have huge amounts of living areas.  Three bedrooms were on the main floor with another 2 bedrooms on the lower level. The home was built in 1974, yours was 2002. The home was open plan and full of light. It was on the corner of Concord and Spring St so its location is not ideal but the home being on 1.31 acres mitigated this. The home had several price reductions and finally sold for well less than the asking price.

Relevance: Relevant
Given the larger size, larger lot size, 1 less bedroom, superior condition but inferior location I believe this home is relevant to your home.

Your details: Living area 3,252 sq ft | 4 beds | 3.5 baths | Lot size 0.29 acres | Built 2002 | 2 car garage

This Colonial, built in 1966, offers 2,976 sq. ft. of living area, which  includes 300 sq. ft. recreation room in the finished lower level. Your  home has 3252 sq ft of living area including the finished lower level. It has 4 bedrooms as does your home, and 2.5  bathrooms, one less full bathroom than yours.  This home sits on a  larger lot of 0.44 sq. ft. close to the Arlington line with a close  proximity to Great Meadows conservation land and with nearby access to  the Minuteman bike path. Your home sits on a lot of 0.29 acres backing onto Route 2. The home has a 2-car tandem attached garage, as does yours, and oil fueled hot water baseboard heat, no  central air. This home has nice hardwood floors throughout and 3  fireplaces (one gas). The living room has a large picture window and  fireplace. The kitchen is fresh and has white appliances, and offers an  open floor plan to the family room and formal dining room. The family  room has large windows for lots of natural light, a cathedral ceiling,  and fireplace. The master suite and 3 more family bedrooms are on the 2nd level all with hardwood floors. The master suite has a bathroom with a  shower stall. The other bedrooms share the family bathroom with a  tub/shower. The bathrooms, including the master bathroom, have a dated  feel. The lower level has a finished playroom with the home’s 3rd fireplace. The large private backyard features a patio area. This home  had an accepted offer in 6 days with competition, selling over asking  price.

Relevance: Relevant
Given the smaller size, 1 less full bathroom, inferior garage, but superior location I believe this home is relevant to your home.

Your details: Living area 3,252 sq ft | 4 beds | 3.5 baths | Lot size 0.29 acres | Built 2002 | 2 car garage

This is an expanded and renovated contemporary ranch, built in 1958, and  located along busy Lowell Street. It is just a bit larger than your  home at 3302 sq. ft. of living space including about 650 sq. ft. in the  lower level. We have your home at 3252 sq. ft., also including the finished lower level. This home sits on a larger lot of 0.49  acres vs. your 0.29 acre lot. It has a 2-car attached garage, central  air, and gas fueled forced air heat. The home offers 4 bedrooms the same as yours, and 3.5 bathrooms also the same as your  home. One of the bedrooms is part of an in-law apartment on the main  living level. The home has a lot of modern style throughout with  gleaming hardwood floors on the first level. There is no formal living  room, but there is a large family room with a gas fireplace and a  vaulted ceiling. There is also a room used as an office. Wainscoting  graces the walls of the formal dining room. A cased opening leads into  the kitchen from the family room. The kitchen offers granite counters,  stainless steel appliances, breakfast bar island with cooktop, and opens  to an informal dining area. A slider from the informal dining area  opens to the huge deck overlooking the backyard. The master suite was  freshly painted with white trim, whereas the rest of the home had a  darker wood trim. The master bedroom is carpeted with his/hers closets,  one is a walk-in, and a full bathroom with a Jacuzzi tub and shower  stall. Two more family bedrooms share the nearby full family bathroom  and are both carpeted. The in-law apartment offers a large space, which  would work as a 4th bedroom. The large room opens to the  home’s 2nd kitchen and an en suite full bathroom. The in-law apartment  is spacious and light-filled. The lower level offers the half bathroom, a  recreation/playroom, and another bonus room. This home sold over asking  price with completion in 7 days.

Relevance: Relevant, but higher
Given the larger size with larger above ground living area, larger lot, superior condition, inferior location I believe this home is relevant to your home but it should sell for higher than yours.

Your details: Living area 3,252 sq ft | 4 beds | 3.5 baths | Lot size 0.29 acres | Built 2002 | 2 car garage

This was our listing. This colonial style home was built in 1985. It is  smaller than your home with 2,432 sq ft., which includes a 285 sq. ft.  finished room in the basement. Your home has 3298 sq ft., also including  a finished room in the lower level. This home has 4 bedrooms, the same as your home, and it has 2.5 bathrooms which is 1 more than your 3.5 full bathrooms.  It sits on a larger size lot at 0.43 acres, vs. yours at 0.29 acres. The  foyer and majority of the home’s interior was freshly painted. The  living room has hardwood floors and a wood-burning fireplace. A slider  from the living room leads to the fully fenced backyard & brick  patio. The living room flows into a formal dining area, which has  hardwood floors & chair rail. The dining room opens into the newly  renovated kitchen with granite countertops, stainless steel appliances,  maple cabinets, tile backsplash & an informal dining area. A bay  window provides lots of natural light. The main level also features the  master suite with wall to wall carpeting, a walk in closet and full bath  with granite counter & tiled shower/tub. Another family bedroom  with wall to wall carpeting is on the first level along with a half  bath. Two additional large bedrooms with wall to wall carpeting are on  the 2nd floor and share a bathroom. This family bathroom has been  renovated and has shower and tub, ceramic tile floor, and granite  counters. The lower level has a bonus room with wall to wall carpeting  that is accessed via an unfinished basement area. This home also has an  attached 2 car garage. It has solar panels, which really appealed to  buyers. It was listed for $899,000 and we had 20 offers on the home and  we sold it for $1,060,000.

Relevance: Relevant, but Higher
We were really surprised at how high this home sold for, but the buyers fell in love with it and pushed it up much higher than market value.  Given its superior condition, superior location, smaller size, 1 less bedroom I believe this home is relevant to your home but it will sell for more than yours.

Your details: Living area 3,252 sq ft | 4 beds | 3.5 baths | Lot size 0.29 acres | Built 2002 | 2 car garage

This home is smaller than your home at 2528 sq ft of all above ground living area. Your home is 3252 sq ft which includes the finished lower level. It has the same number of bedrooms as your home but has 1 less bathroom than your home. It is on a larger lot of 0.4 acres on a busy street, whereas yours in 0.29 acres backing onto Route 2. The home was built in 1997 so it is a similar vintage to your home but has been renovated since. It also has a 2 car garage. The kitchen is open to the dining room, informal dining area and family room. The home is full of light with skylights and walls of glass. The kitchen has been renovated and has granite counters, stainless steel appliances and wooden cabinetry. Each of the bathrooms has been totally renovated with quartz counters, modern white cabinetry, ceramic floor tiles. All 4 bedrooms had wall to wall carpets and were light filled. Out from the open plan living areas are sliding doors out to the deck and huge yard beyond. The home has central air, had been freshly painted inside, with a new roof, new furnace and was fully updated.

Relevance: Relevant but higher
Given that the home is smaller than your home, but in far superior condition I believe this home is relevant to your home but it should sell for a little more.

Your details: Living area 3,252 sq ft | 4 beds | 3.5 baths | Lot size 0.29 acres | Built 2002 | 2 car garage

This home is a similar size to your home, but it is all above ground living area and doesn't include the finished lower level. It has the same number of bedrooms as your home at 4 bedrooms, and has 1 full bathroom less than your home but 1 more half bathroom. It is on a similar size lot of 0.22 acres, yours is 0.29 acres. It was built in a similar vintage to your home in 2000. It has central air. As you walk in the front door you have a large 2 story foyer, open to the living room, with french doors leading to an office off the living room.  It has a large kitchen with stainless steel appliances and is open plan with the informal dining area and family room. The family room has a fireplace, and doors out to the deck beyond. The upper level had hardwood floors and some of the bathrooms had been updated nicely.

Relevance: Higher.
Given the larger size of this home as it is the same size but this does not count the finished basement, superior condition, superior location I believe it 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 $990,000-$1,030,000.  

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 4 S Rindge Rd which came on the market for $899,000 and sold for $1,060,000, and 438 Lowell St which came on the market for $899,000 and sold for $1,060,000,  and 105 Gleason St which came on the market for $1,100,000 and sold for $1,185,000, and the home at 31 Circle Road which came on the market for $995,000 and sold for $1,016,000. 

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.  If you decided to sell your home, then 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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