Bidding wars are the norm in Cambridge these days, where the sale price relative to the last list price was a whopping 106% in the three months ending on June 5th 2014. How do other communities compare, and where might you buy without a bidding war? The following table shows sale prices relative list prices for a number of communities in the Boston area. Here’s what the numbers mean:
bright orange (100% or above): These communities are seeing lots of bidding wars. At the upper end, properties may go tens of thousands of dollars above asking.
light orange (98% – 99%): In these communities, the demand for property is still strong. You will see occasional but not constant bidding wars.
yellow (96% – 97%): These markets may still be competitive but bidding wars are not the norm.
If these numbers aren’t making sense, here are some examples. Say a property lists for $425,000 then drops to $400,000. If it sells for $408,000 then the sale price divided by the last list price is $408,000/$400,000 = 102% (represented by 102 on our list). This means that the sale price was 2% above the last list price. If a property lists for $500,000 and sells immediately for $525,000 then its sale price divided by its last list price is $525,000/$500,000 = 105%. If a property lists for $500,000 and sells fro $490,000 its sale price divided by last list price is $500,000/$490,000 = 98%.
Data Source: MLSPIN