13 Hathaway Rd, Lexington

Market Analysis for Zoltan Juhasz

Contents

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

Description of home

13 Hathaway Rd will be a signature home in one of Lexington's most desirable neighborhoods. 

I am speculating as to the type of home you could/would build. The home will have 5+ bedrooms, each with attached bathrooms, on the second floor, a 'teen-suite' with a loft, bedroom and full bathroom on the third floor, a guest bedroom with an en-suite bathroom on the first floor, and a finished lower level with a full bathroom. The home has 5+ bedrooms in total, 6+ bathrooms, 3 car garage on 0.69 acres.

This market analysis assumes the first floor, second floor, third floor and basement finished for a total living area of approx 7400 - 7700 sq ft, so I will use a ballpark range of 7500 sq ft.

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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. 

Current average home prices in Lexington are well above the average prices obtained at the prior peak of the market in 2005. Average single family home prices have been increasing steadily since 2009, which was considered the bottom of the market in Lexington. The real estate downturn is truly over and the market has fully recovered.

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 square foot statistics, it is important to throw in a caveat. 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, which is acceptable so long as how the living area is calculated is disclosed.   Other agents follow the living area reported in public record, which never includes finished areas in the basement, but will then note in MLS that there is a finished basement. To this end, it is important to review each individual listing deemed as relevant to determine the ‘true’ price per square foot of above ground living area before using it as a determinant on the price of your home.

 Reviewing the price per square foot chart below shows us that the average price per square foot in Lexington in the $2M - $5M price range is around the $373 per square foot.  It’s important to note that the maximum price per square foot achieved varies across most price ranges, along with the minimum obtained for each price range.

According to the chart below, single-family homes built in Lexington after 2010 average at $375 per square foot.

The chart below shows that single family homes in Lexington of similar size to your home in the 7,000 square foot range, have an average price per square foot of $307. The value for new construction will be higher than this and a value closer to $375/sq ft is appropriate. 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 $2M - $3M price range are just over 2 month’s supply showing a serious shortage. Also the lack of data for $3M - $5M shows that there have been no sales over $3M in the prior 12 months, with 4 homes currently on the market in this price range.

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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 home:  7,500+ sq ft including the finished lower level | 5+ bedrooms | 6.5+ bathrooms | 3 car garage | 0.69 acres

This home was sold to one of our teams buyers recently. This  home is smaller than your home with a total of 7,267 sq ft when considering the third floor and finished lower level. This home has  6 bedrooms, and it has 6.5 bathrooms.  It has a 3 car attached garage  and  is on a smaller lot of 0.43 acres in Merriam Hill and the location is slightly superior to yours given the  proximity of Merriam Hill to Lexington Center. But, the home sits on a narrow and steep road on the edge of Merriam Hill. It sold for $330 per sq ft  when  considering the four finished  levels.

Relevance: Relevant, but yours should sell for more.  Given your larger lot, and potentially larger size - your home should sell for more than this home.

Your home:  7,500+ sq ft including the finished lower level | 5+ bedrooms | 6.5+ bathrooms | 3 car garage | 0.69 acres

This  home is in the same size range as your home with a total of 7,667 sq ft when considering the third floor and finished lower level. This home has 6 bedrooms, and it has 7.5 bathrooms.  It has a 3 car attached garage and  is on 0.83 acres on busy Adams Street so the location is inferior to yours given the traffic on this road. It sold for $325 per sq ft  when considering the four finished  levels. This home sold in mid-2017.

Relevance: Relevant, but yours should sell for more. Given your homes superior location and similar range of size - your home should sell for more than this home.

Your home:  7,500+ sq ft including the finished lower level | 5+ bedrooms | 6.5+ bathrooms | 3 car garage | 0.69 acres

Your  home is slightly smaller than this home with a total of 7,751 sq  ft when considering the finished lower level (the home did not have a finished third floor). This home  has  5 bedrooms, and it has 6.5 bathrooms.  It has a 3 car attached  garage  and  is on 1.07 acres in FollenHill and so the location is  slightly inferior to yours. It sold for $349 per sq ft  when  considering the three finished  levels. This home sold in late-2017. This is the lot that I met you and Erik, along with the seller at a couple of years ago.

Relevance: Relevant, but yours should sell for more. Given  your homes slightly superior location, and similar size, your home should sell for more than this home.

Your home:  7,500+ sq ft including the finished lower level | 5+ bedrooms | 6.5+ bathrooms | 3 car garage | 0.69 acres

This  home is a similar size to your home with a total of 7,400 sq ft - this includes a finished third floor but the lower level is unfinished (so it could be expanded to over 8,000 sq ft). This home has 5  bedrooms, and it has 6.5 bathrooms.  It has a 2 car attached garage and  is on 1.09 acres close to Lexington  Center but not in an established neighborhood and on a narrow and very poorly maintained road. It is currently on the market for $405 per sq ft  when  considering the three finished  levels. The home has been on the  market for 294 days and was listed prior to the original home being torn down - the primary reasons I believe are that the house sits on a narrow and very poorly maintained road, only has a 2 car garage and (personal preference here) the multi-color/barn-like look does not appeal to all buyers.

Relevance: Relevant, but yours should sell for more. Given your homes superior location and comparable size, I believe your home should sell for more than this home with the caveat being that the home is not sold yet.

Your home:  7,500+ sq ft including the finished lower level | 5+ bedrooms | 6.5+ bathrooms | 3 car garage | 0.69 acres

This home is a similar size as your home with a total of 7,509 sq ft when considering the third floor and finished lower level. This home has 5 bedrooms, and  it has 6.5 bathrooms.  It has a 3 car attached garage and is on 0.69  acres on busy Adams Street so the location is inferior to yours given the  traffic on this road. It is currently on the market for $425 per sq ft when  considering the four finished  levels. The home has been on the  market for 66 days. The home was put on the market before the foundations of the new home were poured.

Relevance: Relevant, but yours should sell for a little more. Given your homes superior location and comparable size, it is relevant to your home but yours should sell for a little more, but this home is currently on the market.

Your home:  7,500+ sq ft including the finished lower level | 5+ bedrooms | 6.5+ bathrooms | 3 car garage | 0.69 acres

This home is my listing. This  home is larger than your home with a total of 7,970 sq ft - this includes a finished third floor but the lower level is unfinished so it is all above ground living area. This home has 7  bedrooms, and it has 7.5 bathrooms.  It has a 3 car attached garage and is on 0.71 acres on the corner of busy Adams Street and Emerson Rd, so the location is inferior to yours given the traffic on Adams. It is currently on the market for $401 per sq ft when considering the four finished  levels. The home has been on the  market for 260 days - the primary reason is that the house is unfinished. We have had 1 buyer come to see the home 5 times so far, but until the kitchen and bathrooms are installed they are loath to make an offer.

Relevance: Relevant. Given your homes superior location and slightly smaller size I believe your home should sell for a similar price.

Your home:  7,500+ sq ft including the finished lower level | 5+ bedrooms | 6.5+ bathrooms | 3 car garage | 0.69 acres

This home is larger than your home with a total of 8,600 sq ft when considering the third floor and finished lower level. This home has 6 bedrooms, and it has 7.5 bathrooms.  It has a 3 car attached garage and is on 0.70 acres in desirable Burnham farms and so the location is slightly superior to yours. It sold for $367 per sq ft when considering the four finished levels. This home sold in early-2016.

Relevance: Relevant, but it should sell for more. Given this homes superior location and being larger I believe it is relevant to your home but it should sell for more.

Your home:  7,500+ sq ft including the finished lower level | 5+ bedrooms | 6.5+ bathrooms | 3 car garage | 0.69 acres

This  home is larger than your home with a total of 8,229 sq ft when considering the third floor and finished lower level. This home has 6 bedrooms, and it has 7.5 bathrooms.  It has a 3 car attached garage and  is on 0.41 acres in Merriam Hill and so the location is superior to yours given the  proximity of Merriam Hill to Lexington Center. It is currently on the market for $412 per sq ft  when considering the four finished  levels. The home has been on the market for 581 days. The home was built prior to the FAR regulations being enacted and the builder built to within 15/20 feet of the side and back lot lines, and buyers in this price point want backyards. At a lower price point a substantial yard would be a nice-to-have; but, at around $3.4M, buyers see it as a requirement. In addition, at $421/sq ft its price is substantially higher than comparable properties. There were 13 builders competing for this land 3 years ago and it sold for $1,158,000 as a tear down. Given the number of days on the market I think if they were to reduce the price to $3.1M - $3.2M or below this home would sell. The agent rarely does Open Houses also, so there is little exposure of the home to the buyers out there.

Relevance: Relevant, but it should sell for a little more. Given this homes superior location and larger size, versus its lack of a yard I believe your home should sell for less than this home.

Your home:  7,500+ sq ft including the finished lower level | 5+ bedrooms | 6.5+ bathrooms | 3 car garage | 0.69 acres

I sold this home to my buyer. This  home is larger than your home with a total of 9,447 sq ft when considering the third floor and finished lower level. This home has 6  bedrooms, and it has 8.5 bathrooms.  It has a 3 car attached garage (although one bay is tandem parking) and is on 0.41 acres in Munroe Hill and so the location is superior to yours given the proximity of Munroe Hill to Lexington Center. It sold for $361 per sq ft when considering the four finished  levels. This home sold in mid-2016.

Relevance: Higher. Given your homes inferior location and smaller size I believe this home will sell for more than your home.

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Pricing Recommendation

Also to take into consideration is the home planned for 12 Hathaway Rd, Lexington, which is across the road that will be built on the 0.8 acre lot. Plans are underway, offer is being finalized with a buyer, in the $3M - $3.1M range.

I would anticipate a home in the low $3M range could be built at this location.

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