Of course, we’d all like to know the real answer for that question NOW, not at the end of this year. So I guess lets start with what we know about 2015.
For return on investment, real estate stayed on top. On a national average the return on investment in 2015, the following averaged;
Real Estate + 6.6%
NASDAQ + 5.7%
S&P - 0.7%
Dow Jones - 2.2%
And in our area, Real Estate did even better. I did a quick survey of Cambridge Condos and in 2014, 661 condos were sold for an average of $582sf. In 2015, 594 condos were sold for an average of $641sf. In Watertown, pretty much the same changes. In 2014, 259 condos sold for an average of $313sf, and in 2015, 219 condos sold for an average of $341sf. In both cases, 2015 had a drop in sold inventory; almost 10% less in Cambridge and 17% less in Watertown. Yet in both cases, that inventory sold for more; +10% in both Cambridge and Watertown. This simply proves that those on the ground already knew, that less inventory plus pent up buyer demand led to sellers getting their terms and conditions. Yes, it was a seller’s market in 2015!
Interest rates have remained at historically low levels and while they are projected to rise (from todays. 3.9% to 5.5% at the end of 2017), they will still be historically low levels. In the 1970s, interest rates averaged 8.86%, in the 1980s it was all the way up to 12.7%, down to 8.12% in the 1990s, and 6.29% in the 2000s. It doesn’t seem like interest rates will negatively affect sales in 2016-2017.
So far, we have not had any crippling snowstorms. Last year at this time it was getting difficult to even park to see a property, and when those properties were later surrounded by 8 feet of snow, who knew what they were buying? Yet today’s available inventory is still very low. Maybe sellers are waiting until spring to sell. That I think is a mistake. Buyers are still flocking to open houses. I went to some the other day in Cambridge, the next day in Watertown, and yesterday in Arlington and saw the same buyers at each open house. If everyone waits until April to sell, buyers (and sellers) will be overwhelmed. Now is the opportunity for your property to show itself off to hungry buyers. Would you rather stand out or be part of the mob? List now, you won’t be disappointed.