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As a Cambridge real estate agent, the city squares of Cambridge, Somerville and Medford and the town centers of Arlington, Watertown and Belmont, Massachusetts are my home turf. And as a lifelong New Englander who’s lived within twenty miles of Boston most of my life, I can introduce you to other nearby towns as we search for your new home. If you’re planning to sell your home in Cambridge, MA or nearby you’ll find plenty of info about the home selling process here too. Questions? Send me an email or call me at 617-504-1737.

Did My Cambridge House’s Value Really Go Up 16%?

Sold HouseA recent Boston Globe article has our phone ringing. Sellers want to know if it’s true – did Cambridge single family values really increase by 16%?

In short the answer is NO.  Despite the Globe‘s assertion that “In Cambridge, prices increased a remarkable 16 percent over the year”, prices have not increased dramatically. 

It is true that Cambridge has weathered the real estate storm far better than many Massachusetts towns and cities.  Demand for Cambridge single families and condominiums remains strong and inventory low. Cambridge is a destination city – for suburbanites looking to retire to the city, for graduates of local schools hoping to return to Cambridge, for employees of the many companies headquartered in Cambridge, and for all who love this vibrant Massachusetts city.  Cambridge typically weathers market fluctuations better than most Massachusetts towns and cities.

Is the Globe article wrong?  No – the median price of homes sold in Cambridge did increase substantially in 2008.  The median price of the 133 Cambridge single family homes sold in 2007 was $659,000.  In 2008 the median sales price was $755,000.  But what these numbers show is how difficult it is to draw conclusions about real estate values.

To accurately determine changes in the value of real estate requires tracking the same or very similar properties over time.  Instead, when you look at real estate sales from one year to the next you’re seeing what prices were achieved for whatever houses happened to change hands in that period.  Cambridge does not have a lot of cookie cutter housing.  The mix of houses sold can vary in any period.

And the mix did vary between 2007 and 2008.  Of the 133 single families sold in Cambridge in 2007 23% sold for less than $500,000.  In 2008 19% of the single family sales was for less than $500K.  In 2008 37 of the 109 single family house sales was for $1,000,000 or more representing 34% of the market (vs. 30% in 2007) and  30% of those closed for $2.5M or more.  In 2007 less than 25% of the sales over $1m was for $2.5M or more. In short fewer inexpensive (by Cambridge standards!) houses sold in 2008 and more houses were sold (and available for sale) at the upper end of the price range in 2008.

It is difficult – more so than many admit or understand – to make generalizations about changes in house values.  If you want to know the current value of your property the best thing to do is to ask a real estate agent to prepare a comparative market analysis.  A careful review of house sales similar to yours will give the most accurate estimate of the value of your home – and that’s the most important number!  If you would like more information about the value of your house please contact me.

Categories: Real Estate Market Info

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