Sven Andersen, an 11-year real estate veteran whose RE/MAX Leading Edge team serves buyers and sellers North of Boston, has a huge dilemma in his market – namely, a total lack of inventory. But it’s a good problem, he says.
“I have a buyer with $1.5 million burning a hole in his pocket with nowhere to live. That’s a problem.”
We’ve asked Sven to give our Institute for Luxury Home Marketing members an inside look at what’s fueling his market, the challenges he faces and how he’s gaining more listings and selling more homes – using video.
What’s the typical starting price of a luxury home North of Boston?
SA – $1.2 million is about the starting price for a re-sale luxury home in North Boston.
What will $1.2 million buy you?
SA – For this price, a buyer can expect 2,500 to 3,000 square feet, 3 to 4 bedrooms, and a one-car garage. The typical buyer is someone commuting into Boston. We’re two train stops from downtown Boston, so a lot of lawyers, financial services professionals and professors live North of Boston.
How different is your market from last year at this time?
SA – The market is very, very strong with a lot of activity. Our sweet spot is $1 million to $1.4 million and there just isn’t any inventory. Right now the luxury market is challenging. If a home is priced right in this range, it will sell within 15 to 30 days for sure and likely have multiple offers.
A year ago, there wasn’t this much demand. With interest rates so low, buyers want to make an offer and pull the trigger like you didn’t see a year ago. The lack of inventory is quite shocking – typically we have well over 100 homes on the market for sale – now we half that number.
What noteworthy changes are you seeing in the market?
SA – I can’t emphasize enough how hot this market is. Here’s an example: I have a buyer for home listed at $1.5 million. We recently offered $1.55 million – a full $50,000 over the asking price and we had no contingencies. There were eight other offers on that home and we did not get it. So now I have a buyer with $1.5 million burning a hole in his pocket with nowhere to live. That’s a problem.
How are you adapting your business to the market conditions and opportunities?
SA – In a market as tight as this, you have to be aggressive and follow up on leads the minute they come in. Promptness is critical. That is why we are now tracking the time the lead comes in and the rate (minutes) at which my buyers agents respond. Why? Because it is proven the quicker the response the greater likely the conversion.
When it comes to listings, it’s all about producing high-quality videos of the luxury homes. Videos are what we are finding really help sell the listing (view video of Sven’s listing here).
What do you see ahead short- and long-term for your market?
SA – I see continued strong demand in this market due to move-up buyers wanting to take advantage of our proximity to Boston and capitalize on the low interest rates. This market will flourish.
There are developers right now who are building luxury homes and these homes are being sold privately, before they even hit the market.
Next week we'll be hearing from Raziel Ungar in Burlingame, California.