As Boston heats up so does real estate. In this Storii Time, our hosts, Saad and Mike, give the latest on real estate trends in the Greater Boston Area.
Saad: So summer market update.I mean, obviously, we could talk about all types of things. I figured what would be helpful for the purposes of today’s conversation is…we’ll talk about buyers. Right?
Mike: Absolutely.
Saad: But we should talk about sellers, investors, and renters if we have time as well. I think we should try and cover a little bit for everybody because there are changes. There are meaningful updates, I think, for everybody, with what’s going on in the market. But where do you wanna start?
Mike: Well, I’m in Harvard Square right now. So let’s start with, like, condo market. I’ve been in South Boston a decent amount, Dorchester a decent amount, and what have you. And I think that, the quality of pricing and the listing in terms of the information provided, really mean a lot more now for your seller than they have been in the past. I think we talk a little today…but you’re a student of everything and kind of stay up to date and whatnot.
Mike: If this has been your j,ob and you started in 2020 or 2021 where everything just immediately goes off…The market, well, then, you know, I don’t disagree on some people’s points of, like, you could just throw it up, and it’s gonna get bought at that point.
Mike: It takes more strategy and more effort and better marketing now to stand out amongst when people talk about…all the headlines are national…there’s more homes on now than there has been in, you know, the last six, five years. It’s turning into a buyer’s market. That is, not entirely true for Massachusetts and New England, but there’s pockets of stuff where people expected things to continue to go up.
Mike: If something sold last year, slap 4% on that and then list it at that price. And that’s not the case. It’s kind of flat year over year, in a lot of these things.
Saad: Right. I think the data shows I’ve seen in a couple of places. The data shows that listings around here…overall listings year over year have gone up.
Mike: They have. Yeah.
Saad: Yeah. Right? And I think, like, in certain pockets as you mentioned, you see that. Right? But I think a lot of it is condos.
Saad: A lot of it is, like, these new development townhomes, things like that. Like, people who have who own through COVID and things like that or bought during COVID and maybe a few years later they’re looking for a change.This is not the market for them to make a change just because of where interest rates are, and what have you, unless they need to. Right? And that’s usually what I’m seeing unless they have a very special financing situation.
Saad: You know, like, if you’re a cash buyer or if you have help buying, things like that, that’s a different ballgame than somebody who’s trying to get financing.
Mike: Yeah. It is typically the next stage of life thing, not like I’m gonna try to trade this condo in for a nicer one.
Saad: Yeah.
Mike: It’s nice to have situations.
Saad: You’re right. It’s a life situation, or you’ve now made it if you bought pre-COVID, you’ve made enough on that to warrant an ability to put a down payment on. Like, if you’ve built enough of equity.
Mike: Yes.
Saad: Like, if you bought beginning of COVID, you’re in a position to do that. If it’s towards the end, maybe…yeah.
Mike: Yeah.
Saad: So, because it’s not like it was a few-month thing. It was a couple years.So and things changed quite a bit during those two years. There’s a tons of appreciation, and things are still appreciated, but acceleration has been much less.
Mike: Yeah.
Saad: You accumulated
Mike: For the last few years and now maybe the last year to year and a half.
Saad: Exactly.
Mike: It’s been kind of flat.
Saad: Yeah.Right. So I think, yeah, you know, sellers exactly.
Saad: If you’re in the market as a seller, you’ve gotta be much more thoughtful, and sometimes you gotta have some difficult conversations.Right?
Saad: Meaning, if you’ve got a good agent, they’re having the difficult conversation with you being like, listen, like, we can’t just slap any price on it. It’s gotta be data-backed. We have to be very, very thoughtful about all the different pieces of of this particular property, what it’s gonna take to do showings, things like that. And then, and then and then, you know, and then prepare for it to sit as well. Because that’s just the way it is right now. Like, even 20% buyers even 20% buyers, they have high mortgage payments.
Saad: Like, it’s not easy to buy right now. And that’s why I don’t know about you, Mike, but I’m not seeing tons of 10% buyers right now.
Mike: But because it’s tougher for them. If I hear about them, if I’m talking to people about them, they’re not looking around here. They’re looking somewhere else because prices are just way too high here.So, I think that’s a factor.
Saad: And then on that note, like, you know, real quick tidbit on investors too, like, you know, if you’re an investor in this market, like, if you’re somebody trying to buy a multifamily with financing, if you’re trying to buy your first condo with financing, you don’t have any help. You’re doing it on your own. You have to know kinda what you’re getting yourself into.
Saad: You’re probably not gonna cash flow. I think the goal for that particular investor is to get a deal from day one. Take advantage of the market where it is and get a better price on it. You’re probably still not gonna cash flow.
Saad: So you have to wait. You gotta play the game of, like, you know, hey. I’m gonna get the right price now. I’m gonna wait a little bit, refinance, and then the cash flow will be better, that kind of thing.
Saad: Recently too, I told you, for the first time, I have a co-buying situation to roommates who are just tired of paying rent and they want to buy a property together, buy a multifamily, and do house hacking together. A few years ago, house hacking for one individual person was easy. Right? Well, not easy, but but, like, possible.
Saad: And, I mean, it’s virtually impossible now, if you’re getting financing. And also on that note, and this does not apply to investors because investors can’t get gifts. But first time homebuyers, I’m hearing more and more getting gifts from family.
Mike: And that’s a that’s a luxury. That’s you should be grateful for that ability to be set up for the future like that.
Saad: Right. And I think if you have that if you’re if you’re a listener and either as an investor or as a, you know, as, like, you know, first time home buyer or what have you, know that that’s kinda what you’re up against. Like, there are people who are doing that. They’re helping their kids or other family members buy. And if that’s the case, then you’ve got to find a way to partner with somebody or if you really want the property or maybe this is just not the market for you. That’s possible too. I think, there’s some real, there’s some real kind of, like, different types of challenges and opportunities that were a couple years ago.
Mike: Yeah. Yeah. The, let’s see. Talk about the investment side. I think what we’re seeing I’m just gonna take South Boston, like, explosive growth over five, six, seven years.
Mike: Yeah. But you gotta and that’s the benefit of doing more listings is understanding who the end buyer user is. You take a buyer out, you’re gonna choose what is good for the buyer, and you’re not really caring about how they’re marketing it and what and stuff might catch your attention, but you don’t care about that.
Mike: But on the seller side, it’s like, who are the end users? And a lot of those places that would have gone at x price can’t for the simple fact that you stated that the mortgage payment is going to be more than the rent that they earn
Saad: Right.
Mike: From the condo itself. So you eliminate. Now it doesn’t mean that it’s not still good for, like, somebody who’s gonna live in it and wants to own something and get in the game that way, but you are taking out a segment of the buying pool with this mix of variables that we have going on…
Saad: Right now. Absolutely. So, I mean, there’s less competition. In general, but that doesn’t mean there’s no competition.
Saad: You know, I had a client have an offer accepted yesterday, and they were up against two other offers. They had really good terms, and a comparative price, but the other two offers were higher. We were seeing that before to,o where, like, it wasn’t just a higher price that was, but this is just a reminder to folks that, like, terms do matter.
Saad: Like, what you do I mean, we did the whole session on inspection contingency last week. So, you know, listen to that if you have it. We’re not gonna try to spoil it.
Mike: Good plug. Yeah.
Saad: Pull that up. But, there are different levers you can pull on aside from price, right, to put yourself in the best light, with the current market. And sellers are giving concessions.
Saad: I don’t know about you, Mike. Well, I do because you talk about it. I was just gonna say you do.
Saad: Except for the audience, and which audience, by the way, MCSS, New England. What’s going on? Oh, yeah. One of the I mean, I forgot what this guy’s name is. Sorry. Mateusz, I met him last night. He’s on the live. Oh, wow. Zubair. What’s going on? Stay on. How you doing? Thank you all for joining.
Saad: But, you know, for the audience first of all, you know, a lot of listings, not a lot, but a lot of new construction listings, I would say. They offering concessions, like, you know, oftentimes $10,000 closing cost credit or one year of HOA fees paid, or things like that. Like, that’s not uncommon to see. Not seeing a much pushback on the buyer agent compensation piece, like, I mean, basically any pushback. Like, the most I’ve gotten is, oh, we’re not gonna pay 2 and a half. We’ll pay two.
Mike: Yeah.Oh, of course. Yeah. Yeah. I’m with you on that.
Saad: That’s what I’m getting. So, I’m saying, like, you know, buyers, like, again, we’ve had a few sessions about that, but that’s not something you have to worry about. It’s the same as before, and sellers are willing to do it because, number one, the way the market is. And number two, like, you know, buyers understand sellers that if they don’t offer that, their pool gets even smaller.
Mike: Yep.
Saad: With the way things are right now. So, I think, lots of things to that, both sellers and buyers, and investors, you know, have to keep in mind. I mean, you know the deal, Mike.
Saad: Look, I’m trying to buy something right now that, you know, maybe beginning of COVID, I could have bought myself.
Because of the way things are right now, I can’t. So I need partners, and hat’s been a whole different story so the whole landscape is different now. And you know, if you’re getting into it, really, you know, have people around you that know that and can teach you and equip you to have success in this market.
Mike: yeah. Every market needs a correction, and it’s just been an unprecedented five-year stretch of just up and up and to the right. However, I come away on camera doing that. Whatever. But the, you know, it needs like, what we experienced wasn’t normal. You know, you get used to one thing, and then now you see a few that say BOM next to it back on the market. It got under agreement, and then it came back on. So deals falling through, some price cuts, and that these are all symptoms of a normal this should be happening normally.
Saad: Right.
Mike: Like, it shouldn’t be just aa layup…right. Every time. And so that is good that buyers can take a beat and have an inspection. And, you know, as the rules shake out, obviously, there’ll be more of that. But, like, these are all you shouldn’t say…oh, I walked in. I have ten minutes to decide to drop a million dollars on something.
Saad: Those days I haven’t seen in a while now. Yeah. Yes, it’s definitely much more of a I’m not saying it’s a buyer’s market, but it’s much more of a buyer’s market. The playing field is, much more even.
Saad: Nick, Nikki Caros, how you doing?
Mike: What’s up?
Saad: Let’s talk about the recent news for renters. We talked about investors a little bit too. You know, for those who don’t know, in Massachusetts, landlords, I think as of August 1, landlords are gonna be the ones that are required to, from my understanding, are gonna be the ones that are required to pay the broker fee if they decide to use a broker. The tenant cannot pay that fee.
Saad: So, that’s a big deal, and and and the big and I think a big thing that, Ashid, what’s up, man?
Saad: The big thing that, like, that does is it reduces the upfront cost for the tenant. You know, instead of paying three full months, instead of paying four full months worth of, deposits and fees upfront, meaning first, last, security, and, broker fee. Now they’ll only pay three, if the landlord requires a security deposit. Or it could be two if there’s no security deposit.
Saad: So that the cost goes down, a good amount. But what are your thoughts on that? I mean, I think you’ve already heard my thoughts on it, but, like, you know, what are your thoughts? I’m curious to know.
Mike: It should be in the same way that a sale goes, and whoever is representing the person, the person or group pays for that. So, if you are the broker representing…if you are the broker representing the owner in a rental, you’re doing a service for them.
Saad: Right.
Mike: They should be responsible for that half a month. Right? If there’s two brokers coming together, and then the buyers can still choose which I think is going to be more commonplace than not, because it’s just a headache going all the way around and not knowing if you’re getting screwed and whatnot, having a reliable broker representing you..then you should be happy to pay them a half month’s fee.
Saad: Yeah.
Mike: it was always that full month situation where the owner hired this broker. You have no affiliation to them, yet you’re the one paying for them. I always thought that is way fairer in my eyes.
Saad: Sure,I don’t disagree with you, on that.I think that does make sense. But what this is saying is that none of that fee can be paid for by the tenant. At least that’s my understanding.
Mike: It is it is forced broker relationship.
Saad: Correct.
Mike: Yeah. The forced broker relationship is the owner’s broker being hired.
Saad: Yeah.
Mike: You, as a tenant, still can hire an agent, and then you would be responsible for that, their cooperating compensation of half a month. And you said that?
Saad: Oh, okay. Got it. So the full broker fee paid for by the landlord, it’s not paid for the land, but for their portion is paid for by the landlord.
Mike: Yeah. Just like it is in, like I mean, it’s like basically, it’s like, you know, co-broke.
Mike: Like, you as the tenant, if you go unrepresented and just sign something, you shouldn’t have to pay that broker.
Saad: By the way, we have Andrew Delore. He’s a lawyer. He’s on the live right now as well. Andrew, if you wanna join the live, just request. We’ll have you come on. He can explain this much better than we can. But, Andrew, thanks for joining, man. We appreciate you.
Saad: So I think one big thing that I think people fail to realize is that since it’s been in a market like the one we have where there’s so much demand. And the supply has been pretty low. And for a while, it’s been that way, at least around Greater Boston. Like, maybe you get further out, which not so much like that.
Saad: But around Greater Boston, it’s been like that. For example, it’s been seven years or eight years now of me being a landlord, and I’ve never paid a broker fee. So at least in, again, in what I have around Boston. But that’s gonna change.
Saad: So what I’m hearing and what I think is gonna happen is, like, you know, a lot of landlords, they’re gonna be like…Okay, I gotta pay this fee and I’m just gonna but I now I’m just gonna increase the rent. I think that’s what hurts tenants.
Saad: I think tenants will end up paying in the long run. Even though upfront they’ll save some money, their month-to-month is gonna go up. Their month-to-month up full is gonna go up, and and I think that’s what I have an issue with is because that’s gonna prevent home ownership, it’s gonna prevent, you know, wealth building, it’s gonna prevent a lot of things. So, It’d be interesting to see too how that impacts just the investor landscape around here, because it’s already a little stunted.
Mike: Yeah. It will be interesting. I mean, the good news is that, like, you only pay the broker fee once if you stay in a place multiple years.
Saad: Right. Exactly.
Saad: Osama, what’s up, man? Thanks for joining. I think all in all, the key things to note when it comes to the summer market is this is not last summer. This is not the summer before that. There is still competition.
Saad: It’s not like, this place has been sitting for twenty days. Let me just sit on it and wait. I’ve had two situations just in the last week where I had clients who were interested in a property. They were like, I’ve got time. I’ve got time. And then somebody else swoops in.
Mike: Yeah. You wanna be the first to act because then you can have the most leverage when you’re the only offer then.
Saad: 100%.
Mike: So if you wait, the likelihood of somebody else coming in increases, and then your leverage goes down.
Saad: Yeah.
Mike: So it still behooves you now not to say that, like, you see it at 2PM. You have to have an offer in by 6PM. That’s just chaotic for everybody. But within that next, like, day or two, you should know if you wanna make a play on it or not.
Saad: Yeah. And if you don’t, you don’t. Right? You don’t.
Mike: Yeah. Correct.
Saad: Yeah. Like,I think that’s important too. If you’re just kinda, like, playing that game in your head, like, how stressful? Number one, how stressful is that gonna be? But also, it does put you in those positions where, like, you know, you really want something.
Saad: It is that, 8 out of 10 scale, it’s, like, quite at the eight, and then you lose it. And then, like, who knows how long it takes to find that eight. Especially in a low supply environment, which it still is. Even though it’s higher than last year, it still is a low supply.
Saad: That’s even more stressful if you’re serious about buying a home. So, I think that’s an important piece to keep in mind. The market is different, but competition is still there, especially in certain pockets, and especially if something is priced right. That’s the key. If something is priced like… for example…this property that my clients went under agreement on yesterday.
Saad: You know, it was it’s definitely underpriced. And that’s why it got… i mean two, three years ago, it would have probably gotten, like, 15 offers. But that’s why I got 3. But it got 3 offers. The 2 other offers were higher, but at the end of the day, people are looking for, like, seamlessness. They’re looking for certain sellers. Like, it’s really important…it’s still important just like it was a couple of years ago. It’s still important to understand if you’re a buyer, what is important to the seller.
Saad: Like, understand what are their preferred closing dates? Understand, like, what their situation is, and that’ll help you put together a strong offer.
Saad: Like, thisparticular agent, for example, she told us, hey…I think she really liked us, so that helped…But, like, she specifically was like… hey, you guys should write a letter…I think rapport building and stuff like that, you might think, like, doesn’t matter. It does. It does. It still matters. You know? Like, it mattered a lot before, it still matters today in Greater Boston.
Mike: I always think of it as, like, when you’re applying for a job. If you have a rapport and know someone in that decision making process or at that company versus blindly setting sending something on LinkedIn or Indeed, you’re gonna have a way better shot at knowing what it takes for that particular situation. Like, you anybody can just submit an offer on an email, and, you know, that puts you at a disadvantage.
Saad: Yeah. Definitely.
Mike: Still, it’s normal life.
Saad: I mean, the first thing I do when clients, a bit of an aside, but still related. Like, the first thing I do when clients send me a listing that they’re interested in, I see who the agents are.
Saad: That’s the first thing I do. I don’t care about the disclosures. I don’t care about anything else until I know who the listing agent is. And, you know, I mean you and I have done a reasonable amount of business where we know the players.
Saad: Right? We know the people who get a good amount of listings in certain areas and things like that. And then you slowly develop rapport even if you haven’t done a deal with them. that matters too. So if you’re trying to get help in this market, I don’t know.
Saad: You might know the two guys who know what they’re doing.
00:24:24 [Speaker 1]
Mike: Some charming individuals.
Saad: Charming. You know, some, mediocre-looking individuals.
Mike: Tend to overdraft to compensate for their ugly hair.
Saad: It’s a lineup every week type of these types of dudes. Any last tidbits?
Mike: Yeah. Just on that, I mean, that’s helped me out in the past, like, calling the agent, building rapport. Maybe we don’t get that, but that person is looking at a particular product. They’re looking at a condo in Salem. They’re looking at a single family in Woburn or whatever.
Mike: Like, the more balls you have in the air where you can get information before it’s public, the better it is for your clients
Saad: Yeah. On that front. And if you’re an agent too, if you’re an agent too, like, you know, some of these, like, Facebook groups or, like, you know, top agent networks, for example, like, those those channels, like, if once you find out I mean, there’s there’s some fluff out there.
Mike: Of golf.
Saad: Of course. But, like, you find a few channels that are, like, legit, and you start to kind of, like, get your name out there a little bit, it’s, those can be really powerful for your clients.
Saad: So I would say, don’t wait for things to come to you and tell your clients to send you listings, what have you. Do some of that work. You know, get out, make phone calls. It embeds you in.
Mike: I don’t know if you saw. There was, something going around Instagram yesterday of a lady put up a billboard that was like, Last year, we sold 586.
Saad: I saw that.
Mike: Your cousin sold 2. Now that’s not to say my cousin, I need to retain as a client. It depends on who your cousin is.
Saad: You’re not lying. But it is.
Mike: It’s a you know? Because we like networking. We like meeting people, and that helps us out.
Saad: Absolutely.
Mike: And you never know…does somebody guarantee can get you off-market listings? Nobody bullshit. Nobody can, like, guarantee that. Just to know somebody’s, like, active and out there, you never know the serendipity that’ll happen.
Saad: Absolutely. Hot Hotem, how you doing? Hi, Sai. I look forward to catching up with you virtually sometime soon. Let’s do it. You know, we love catching up virtually. Good time.
Saad: But sounds good. So, Mike, I mean, just a reminder to people, the market is different.
Saad: It’s not as hot, but it’s still competitive but it depends…the biggest thing to look out for is price. If something is overpriced, it’s probably gonna sit. You’re probably gonna see some price cuts. You’re competing with more qualified buyers now. Like, that’s just a fact, based on where we are. And look, it’s Greater Boston.
Saad: It’s gonna appreciate like, if anyone’s looking for a crash, probably not gonna happen. I mean, I don’t have a crystal ball, but it’s probably not gonna happen around here. You might see stunted growth. You might see slight dip. You’re not gonna see a crash. So the supply and demand dynamic is very different here compared to basically the entire country. And now that’s a really important realization because the headlines will not tell you that.
Mike: Couldn’t have said it better myself.
Saad: You know, that’s what I do, man. You know, I just take what’s in your head.
Saad: He’s Mike. I’m Saad. This is Storii Time. You guys know the deal. We’ll be back next week. Have a great one.
Mike: Bye bye bye bye bye bye.
Saad: Later, bud. Bye.
This Instagram live is transcribed for your easy reading. If you want to catch Storii Time live, every week, follow @saadmun1r and @photolowski on Instagram.