At Donnelly + Co., as we have emerged from the Covid lock-down, we have had the opportunity to observe the changes in the real estate world across two very different marketplaces: Boston and Martha’s Vineyard.
As most of you know, the Boston market has been red hot for several years now. It has been a solid seller’s market, inventory of available property has been consistently low, and buyers have experienced the struggles of multiple offers and homes selling faster than they can get in to see them.
In our post-Covid world, we have more properties for sale in the city than we have seen in years. Negotiating price reductions with sellers is a new skill many Boston agents are learning for the first time. Frankly, negotiating offers is a new concept for them too. The assumption that a property will sell at or above asking price, with more than one offer on the table, has all but gone away.
Martha’s Vineyard real estate, however, has historically operated at a much different pace. Homes might have taken a year, sometimes many years, to sell. And buyers have had the luxury of visiting and revisiting homes of interest before deciding to make an offer.
This has changed, practically overnight. Homes on the Island are selling within days of hitting the market. Buyers are making back up offers on homes in the hopes that something happens to the transaction and they become the lucky new owner. Island agents are dealing with multiple offers, bidding wars, and best and final deadlines for the first time in their careers. The pace of real estate is exhausting everyone. It’s never been like this before.
So, what’s happening? Why the dramatic shift in both markets? Well, of course, the simple answer is Covid. All of this is a good reminder of how dynamic real estate is. The changing behavior of buyers is a reaction in its basic form to the changes we are experiencing in all areas of our lives. If we are working from home for the foreseeable future, then we need extra space for a home office, another bedroom. If our kids are not in school, then we have the flexibility to live in our vacation spot full time and Zoom from there. If we can’t travel overseas then we want to make our way by car to our summer destinations. If we are at home more than ever before then we need a space to sit outside, play outdoors, and enjoy the fresh air. Patios, terraces, balconies and yards have never been so popular.
But, here’s my view. In the same way the market’s shift was a reaction to a major life-changing event for all of us, the market will shift again when life changes again. And it will. Though at times it’s hard to imagine a world where we won’t need to wear masks, sanitize our hands after every outing from our homes, and will actually feel comfortable going into crowded spaces again, we all know that in reality those things will come to an end. We will go back to our offices, our kids will return to school full time, and we will be able to enjoy the lifestyle we enjoyed pre-Covid. And then we will re-adjust what home means to us, and our markets will adjust too.