Real Estate Trends – Cambridge, Massachusetts (Multifamily)

Introduction:

Welcome back again for our latest real estate market trend report.  For those of you that are here for the first time what we do in these reports is examine the real estate market in a city or town in Massachusetts or New Hampshire to evaluate the current conditions.  We do this by looking at the changes in three key metrics year over year for the municipality to see how the market has changed and then evaluate what those observations might mean for that market moving forward.

Today we are highlighting the Multifamily market in Cambridge, MA in Middlesex County

 Seal of Cambridge MA - Cambridge Massachusetts Real Estate

We took a look at the Single Family House Market in Cambridge last month and are following up with a look at the multifamily market.  The single families were down a ton, read on to see how the multifamiles compare.

Market Trends in Cambridge, MA – October 2014 and 2015:

The Cambridge, MA multifamily market has fallen off some since last year.   Both the average listing and sale prices were down a lot.  The median prices were down significantly as well.  The days on market were also up by a very big amount.  Inventory was fairly stable but up slightly with 6 sales in October of 2014 and 7 in October 2015. 

Average Listing Prices:

To start off first we are going to look at the average listing price.  For multifamily properties in Cambridge, MA the average listing price in October 2014 was $1,309,150.  This was down to $1,227,000 in October 2015.  This gives a noticeable decrease of 6.28% year over year. 

 Looking at the median prices we see that they are higher than the averages both years and especially in 2014.  For October of 2014 the median listing price for a multifamily in Cambridge, MA was $1,395,000 and in October 2015 it was $1,250,000 which now gives a much larger decrease of 10.39%.

Average Sale Prices:

Next up we will be looking at is the average sale prices.  The average sale price for Cambridge, MA multifamily properties in October of 2014 was $1,443,500 and in October 2015 that was down to $1,244,286.  That gives another very large 13.80% decrease, which is much bigger than what we saw for the listing prices.

We see a very different pattern with the median sale prices as we did for the listing prices, where in this case it was just slightly higher in 2014 but quite a bit lower in 2015.  For October of 2014 the median sales price for a multifamily in Cambridge, MA was $1,448,000 and in October 2015 it was $1,190,000 giving by far the largest decrease of any of the metrics with a drop of 17.82%.

All the metrics are showing that prices are down for the Cambridge, MA multifamily property market in October, but to what degree is varying a lot.  The progression with each item we looked at went from a noticeable, but not huge, 7% decrease with average list price all the way up to an almost 18% drop looking at the median sale price.  The reason we see the bigger drops in sale prices is if you look the market was still very overheated in October 2014 so not only were prices up but things were also selling very fast (as we will talk more about below) and for above listing price.  Most of the 2014 sales were over list price, and most by a large amount, and in 2015 you see the more normal situation of sales being at least a little less than listings.  Since sales are more important than listings and medians are favored over averages, prices are probably down in the 13-18% range indicated by the sales prices and probably towards the high end of the range as seen with the median sale prices.

Average Days on Market:

Finally the last metric we look at are the average days on market, which is the measure of how long it takes for a property to sell in the current market.  For Cambridge, MA multifamily properties the average days on market in October of 2014 were 30.00 and the average days on market for October 2015 were 63.43 for a massive 111.4% increase. 

Sometimes the percentages can be a little deceptive but in this case it went from a very healthy 30 days on market to fairly undesirable level of over 60.  Also looking in absolute terms and how we think about the selling process it will take almost a full 5 weeks longer to sell this year compared to last year, not at all a trivial difference.

Cambridge, Mass Summary:

The Cambridge, Massachusetts real estate multifamily market is down a huge amount since last year.  The average prices are down quite a bit and the median prices median prices even more.  The days on market were also up a huge amount indicating a much slower market as well. 

In summary if you are looking to sell a multifamily property in Cambridge, MA now you should expect to get a lot less for it than you would have gotten last year.  You should also expect it to take a significantly longer time to sell compared to last year too. 

 

Do you need to sell your Cambridge, Massachusetts multifamily property fast?  If you would like to sell your home fast and hassle free  schedule a consultation with us today.

Please share your questions and comments below.

 

 

 

(Image credit: Seal of Cambridge MA via Wikipedia)

 

Speak Your Mind

*