House Buying in the Age of Low Inventory

“There’s no inventory!”

Those involved with purchasing a house are aware of that there aren’t many houses to choose from! There really has been a dramatic drop in the number of available properties in Cambridge, Somerville, and surrounding communities. I’m not aware of any prediction that would suggest a change to this situation. What actions should they take? What options do home buyers have?fayer

Be prepared to act fast. Properties tend to be available for only a few days (at best) before an offer is accepted. Make sure that your financing is all ready to go. Learn about the market so that you can establish the value of a property for you and that you can make an offer with confidence. Trust your Realtor’s advice!

Consider making a “clean” offer. Sellers will have the opportunity to compare multiple offers in many cases. They tend to choose to “best” combination of price and terms. Many buyers that you compete with make offers with no contingencies: no mortgage contingency, no inspection contingency, nada. A buyer needs to be confident in their financing and ability to repair any found deficiencies in order to do this.

Consider more than one location.  Buyers have a larger number of homes to pursue if they consider a variety of neighborhoods or towns. Increasing the search radius from which to choose is effective especially if you have a brief time-frame for purchasing a new home.

Buy a house that would benefit from system upgrades, renovations, expansion, or an addition. The majority of buyers seek properties in “move-in” condition. It’s much quicker and easier to do! Yet, renovating or adding onto a house may be the only way to move into your preferred neighborhood. Plus, clients with discerning sensibilities get exactly the quality they want. Several clients of mine have done remarkably well with this approach, especially those that create living space in basements.

Recognize and evaluate what you’re looking at. Discuss it with your Realtor + Architect. Is it an expensive problem to solve? Or, does it just look that way?  Clients of mine purchased a home sitting on a foundation that had collapsed in certain areas. They had a mason repair it; it was economical to do as no scaffolding was needed. They got a great deal on the house!

Re-classify a property. One set of clients purchased a two-family and converted it to a single-family. One of my clients purchased a church rectory and  converted it into a two-family. I’ve seen buyers purchase adjoining condominiums and connect them. Neighbors converted a two-family into a single-family for several years (while the kids were growing up) and then converting back to a two-family when their needs changed.

Consider a property that has lingered on the market. In some cases, a nice property can be star-crossed where offers have fallen apart, though there’s nothing of substance wrong with the property. In other cases, the seller may have a number in mind and is willing to wait for the market to rise to his price point.


Cambridge and Somerville’s Low Inventory in 2017

condo rachael

Many are aware that there is “low inventory” in the local residential real estate market. But, how low is low? What forces made it that way? And what implications does it have for you and me if you’re interested in buying or selling?

Motivations have changed for those who want to sell a property. People now sell because they must. Their motivations typically include downsizing, divorce, death, and relocation. Many people who weathered the recession in good shape simply purchase additional properties so they can benefit from record low interest rates, rental income and price appreciation rather than sell.

The recession in 2008 and resulting extremely low interest rates have a lot to do with this situation. In addition, many homes in Greater Boston haven’t recovered their value especially when accounting for inflation. For some, it doesn’t make sense to sell and for other it doesn’t make sense to sell because they’d be realizing a loss, even though it’s almost a decade after the beginnings of the recession.

For buyers, we’re in a rising market, so it’s possible to “overspend” and do quite well in the long-term. Certain properties attract unexpectedly high prices that are hard to justify. Yet, they appear reasonable after a year or two. For sellers, properties are selling for high amounts and in short time periods. The seasonality of selling (you MUST sell in the Spring) is no longer true; one sells when it’s convenient for the seller; the buyers are ready and waiting all year long. If a property is well-priced and professionally marketed, a seller can do quite well. For my clients, I need to know valuations, trends, and a client’s time-frame in addition to in-depth assessments of their particular property.

Jeff Meese Realtor + Architect
Vice-President | ePlace Real Estate
(857) 998-0600

“Jeff is highly knowledgeable, personable, very responsive, and added a significant amount of value to the home buying process. We would (and have) highly recommend him for anyone who is serious about buying a home and wants a buyer’s agent who will actually add significant value to the process. “

~ Dan and Christine


kenmoreA 1031 exchange allows an investor to sell a property, to reinvest the proceeds in a new property and to defer all capital gain taxes.

What types of 1031 exchanges are there?
1. Forward Exchange (most common): Sell first, then buy. Most common and easiest type of exchange. Net proceeds from sale are held by the QI (qualified intermediary) until the are invested in the replacement property.

2. Reverse Exchange: Buy first, then sell. More complex but solves timing problem. The replacement property is “parked” by the QI until the relinquished property is sold.

3. Construction/Improvement Exchange: This exchange is used when the replacement property is under construction or undergoing significant renovations.

What are the rules for a 1031 exchange?
Value: The new property must be of greater or equal value to the sale property and all equity (or the portion of equity that you want to defer tax on) must be rolled into the new property.

Timeline: Identify target properties within 45 days of closing on your sale. Purchase some portion (or all) of identified properties within 180 days.

Intermediary: You must use a Qualified Intermediary who will facilitate the exchange and hold funds while you are in the process of doing the exchange.

Frequency: There’s no limit on how many times or how frequently you can do a 1031 Exchange.

How would a 1031 exchange benefit me?
If you have, or are starting, a real estate portfolio, the 1031 exchange can be used to move from a smaller to a larger property, to consolidate smaller holdings into a larger holdings, or to “cash in” in on appreciation and optimize cash flow by moving from a lower-cap area to a high-cap rate area. If you’re looking to simplify existing investments, a 1031 Exchange can help you move from actively managed properties (residential properties, gross leases) to more passive investments like triple net lease properties.

Call or text me at (857) 998-0600. Your property or interests may have particular needs.


Jeff Meese Realtor + Architect

Vice-President | ePlace Real Estate


(857) 998-0600


Can Somerville Be the Next Innovtion Center?

I attended a fascinating panel event titled “The Next Innovation Center: Why Not Somerville?” on February 28, 2017. The event was sponsored by the Somerville Chamber of Commerce.

Panelists were top-notch:

  • Robert Coughlin, President and CEO of the Massachusetts Biotechnology Council
  • Kermit Alexander, Chief Economist, American Institute of Architects
  • Peter Bakerian, Managing Director, Jones Lang LaSalle

A few highlights:

Companies base their HQ, office, and laboratory space decisions on what their people want. Their people, like most, want to live, work, and play in the same area. Walking from one to the other to the other is optimum.

What do these companies want for their employees?

  • One hour commute to Logan Airport
  • No-car commute; walking and biking is preferred
  • Pre-permitted sites, ready to go, with predictable outcomes
  • Short and aggressive time-frames from decision-making through move-in
  • Urban amenities including quality housing, restaurants, coffee shops, and convenience stores
  • Accessibility convenience via public and private transportation
  • Outdoor spaces
  • Buildings: modern common areas, bike storage, locker rooms and showers, IT infrastructure, natural light

Life Science and high-tech companies want to locate in geographic clusters. Good examples include East Cambridge/Kendall Square and Boston’s Seaport District. In order to become recognized as an Innovation Center, Somerville needs to attract more small start-ups, possibly via incubator space, as well as larger scale development.

Bob noted the positive outcomes that resulted from collaboration between businesses and city and state governments.  He noted that it’s a happy time when a Democratic Mayor and a Republican Governor can get along and work constructively. Examples included the burgeoning biotech sector in Worcester, and the new GE headquarters in Boston.

National concerns include housing affordability, and overheated real estate market segments such as apartment buildings.

Somerville -specific concerns include the having the GLX meeting it’s 2021 operation opening date, enacting a new zoning code that’s been under discussion for several years, and finding a developer to break the ice from the perception that Somerville is a frontier market despite it’s close proximity to East Cambridge.

Peter noted that, in general, the Seaport District and Fenway’s redevelopment began with housing and then expanded to office and laboratory space while Kendall started with office and laboratory space.

2017 PREDICTIONS: Abundance, Scarcity, with Disruptions


January 2017

I hope that last year was robust for you and that you’re looking forward to the coming year. 2017 will reward those who are nimble, responsive, and well-informed. The following predictions are mine and based on my observations. I don’t agree with the majority of 2017 predictions that have a rosy forecast. The possibility of significant disruptions in Cambridge and Somerville may affect many real estate decisions.  

  1. This year’s market will be characterized by financial abundance, scarcity of properties, and unexpected and severe disruptions.
  • Buyers will push sales prices higher and the sales market will remain robust across all market segments.
  • Sellers will typically sell because of need, such as a job relocation, yet there will be an increased number of sellers who want and are able to move up.
  • Disruption will include cuts in state and federal funding to cities and towns. Capital improvements, like Somerville’s Green Line Extension, and many social programs will be cut, stopped, or extended. Cities and towns will need to find ways to address significant budget shortfalls. These disruptions, if severe like the GLX postponement, will affect property valuation.
  1. It will be more lucrative for investors to buy, renovate, and sell than to buy and hold.
  • Thousands of new luxury apartments will open this year and it will take significant time for them to be tenanted. The rental market has already been affected with average rents coming declining last year. They will remain stable, though they could dip again.
  • The sales market for single family, condominium, and multi-family properties will continue to set price records due to low inventory and an abundance of buyers.
  1. Buying decisions will typically ­­be based upon duration, ease, and predictability for a daily commute with a location convenient to social exploration and entertainment.
  • The desire to live in or near a city will drive decision-making across demographic boundaries, i.e., everybody.
  1. The various market segments will perform differently this year.
  • There will be a surge of first-time buyers and valuation in this segment will rise. Cities with subways and commuter rail lines will benefit the most.
  • The $2MM+ segment’s rate of rise will slow as more well-located luxury condominiums are constructed in Greater Boston.
  • The rate of rise in for investment properties will slow, although it could rise. Investment properties, often financed via 1031 exchanges, are scarce relative to the abundance of prospective buyers.
  1. Lenders will continue to differentiate themselves by creating innovative niche services.
  • Mortgage rates will remain competitive. Lenders will create unique programs that address particular issues for a segment of those seeking a mortgage. Programs will be unique to that lender and not common to all lenders.


Jeff Meese Realtor + Architect, Vice-President, ePlace Real Estate, Cambridge
(857) 998-0600

Should I Wait for the Spring Market?

Cambridge and Somerville clients often ask me when is the best time of year to sell their property and when is the best time to buy one. I ask them what they think, and they often say “Spring” for selling and “Winter” for buying. Is that old, outdated information – like putting one’s listing in a real estate magazine with the belief that it will help sell a property – or is it still relevant? It’s appears that many assumptions that were true in past markets changed after 2008 and that they have changed.

Look at the chart. It indicates a trend showing seasonal variation is flattening out over time. It may be related to less inventory overall, the addition of many foreign investors to the market, or simply because people prefer to buy andsell real estate when it’s convenient for them.


What should a savvy buyer or seller do? Make your decisions when it’s convenient for you. Boston is an international city and there’s constant churn of people moving in, out, up, and down.

Do the old rules still apply? Not so much.

Harvard Square

Found Flexibility in a House near Harvard Square

A couple I worked with purchased a large house in Cambridge’s Marsh Billings Historic District near Harvard Square. Their children had left for college and they decided to relocate to Harvard Square from a nearby suburb. They intended to downsize to a four-bedroom stand-alone house, with off-street parking, and convenient to nearby restaurants, shops, and transportation. She worked overseas in academia and he had a thriving medical practice in a Boston suburb.

I alerted them to tour the a house that met these needs and it had a bonus: an accessory apartment. It was a lovely home, and was in need of substantial renovations. They loved the house, placed a strong bid, and purchased the home. Their intention was to live in the “big” house, and rent out the accessory apartment.

Then, one day after much of the renovation had been completed, they realized that being empty-nesters allowed them the freedom to travel together more frequently. They changed course and decided to live in the apartment, which was very nice in its own right, and lease the house, to provide a substantial rental income. It’s also possible that their situation will change in the future. They know that they have the flexibility to move out of the apartment and into the house at a future date.

Jeff Meese Realtor + Architect




Kendall Square

Finding Hidden Value in a Kendall Square House

While visiting an open house with a first-time buyer couple in Cambridge’s Kendall Square, we encountered a single-family house with a hidden upside. The listing agent had described the property as a single-family home and that’s what we had expected to see. The seller had effectively created a two-family with a separate apartment in the basement complete with an entrance, kitchen, bathroom, laundry, and bedroom.  As an Architect, I knew that the ceiling height was high enough to be considered a habitable space. Yet, it wasn’t a separate unit as the basement didn’t have a separate second means of egress, and the windows were too small.

The hidden upside was that creating a true 2-family residence, which this couple was attracted to, would cost only $30,000, yet the list price was at least $250,000 less than any comparable 2-family in Cambridge at that time. The house was located in a zoning district that allowed 2 and 3-family homes, so converting this single-family residence into a 2-family residence would not require a variance from the zoning code.  What a great value that had the promise of flexible uses! It could be used as a single-family home, a 2-family home with modifications, or even as a 3-family home (a tear-down of the existing, and construction of a new 3-family home).

This couple didn’t realize the hidden value of the property until we left the premises and discussed it privately.   These clients received tangible benefits from my education, training, and experience as an Architect.

Jeff Meese Realtor + Architect

New Construction in Dorchester

Buying new construction is easy for a buyer, isn’t it?

No, it’s not. The finishes and systems have been installed, but not yet operated for a long period of time in many instances. It’s impossible to know if there were problems during the course of construction. Did the electrician hurry for some reason? Did the HVAC sub-contractor install a condensate line? Some of these items show up during a home inspection, but even the best inspection occurs in a limited amount of time and items can be missed. Perhaps the home is still not quite completed at the time of inspection; then what?

So, what’s a buyer to do? She may never see the developer or contractor again. What if something needs to be repaired or replaced?

For one of my buyers, I used my training and experience as an Architect – someone familiar with a “punchlist” –  and went through each room with my client after the developer said the condominium was 100%  complete. We turned on every faucet, turned on every light, and used every device. We even turned on the fireplace even though it was hot! We found several electrical problems – the intercom was connected to the wrong exterior device (there were two townhouses side by side) and, even more seriously, we found that the electro-magnetic front door lock had been mis-installed – so no one could get out the front door!

The items were promptly brought to the attention of the developer and fixed prior to closing. Would all licensed real estate salespersons have done the same thing? The home had already been inspected, yet these items were missed.

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Cambridge Somerville Realtor + Architect

Year in Review: 2011

The Year in Review 2011



HAPPY NEW YEAR! The following qualitative observations are mine and reflect my own experiences and limitations; the quantitative data was found on the Multiple Listing Service (MLS).


OVERVIEW The beginning of the year was upbeat as buyers who had returned to the market late in the 4th Quarter of 2010 continued their search for homes through the first half of 2011. I was fortunate to have received multiple referrals resulting in several listings and multiple buyers. Sales were prompt and robust; my work for my clients was recognized by being identified as a “Top 500” agent in New England! The summer was quiet, as it tends to be, and was a good time for me to create a blog presence, have fun, relax a bit, and prepare a more refined online marketing campaign. The post-Labor Day Fall market included a significant decrease in the number of new listings in comparison with 2010. This was true for all property types, but most notably for single family houses in Cambridge. In working with several buyers, we found it difficult to find appropriate properties. We did notice that several “plus” properties (those that fit a full range of my client’s needs) attracted multiple offers and, in some cases, selling prices that exceeded asking prices. As Fall progressed, several buyers decided to postpone their search until Spring 2012, in part because of their concerns about the future direction of property values in the area. At the same time, several clients contacted me to work with them for investment properties. My sense is that those clients who took a longer view have been more apt to actively seek and purchase properties. The holidays, which were active last year, have been busy again! One group of clients had their offer accepted on New Year’s Eve and I’m working with another. It appears that 2012 is off to a promising start. I’m looking forward to more properties becoming available for my buyers as well working with sellers in what has been a reasonably strong, yet value driven, local market.

The lending environment is still very important. One typically needs very good credit and a substantial down payment, though many lenders have programs that can provide alternatives. Interest rates are very favorable and little or no increase is anticipated for the next year, based on comments made by representatives of the Federal Reserve Bank.

The highlight of my architectural endeavors was working towards Planning Board approval for 380 Somerville Avenue in Union Square. Since receiving that approval in July, I have been active with a variety of proposals for residential and commercial clients. This year, I’m looking forward to learning from a series of webinars prepared by the United States Green Building Council (USGBC) on LEED for Homes.


One hundred and fourteen (114) single-family residences sold for an average price in excess of $1.07M and an average sale price per square foot in excess of $440/psf. There were thirty-nine properties that sold in excess of $1M; fifteen properties sold in excess of $2M; and six properties sold for over $3M. The Total Market Value for single family residences was $122,531,413. The condominium market was active with 709 units sold in 2010 with an average price in excess of $498K. The Total Market Value for condominiums was $354,160,682. Fifty eight (58) multi-family properties sold for an average price in excess of $902K and an average price per square foot of $281/psf. The Total Market Value for multi-family residences was $53,274,912.

The Total Market Value for single family residences, condominiums, and multi-family residences in Cambridge was $529,967,007.


Private development included proposals to the Planning Board for for a $600M project by Novartis near MIT as well as a 227-unit residential development that involved the demolition of the “Faces” nightclub (never thought that I would see the day!).


Sixty-five (65) single-family residences sold for an average price in excess of $489K and an average sale price per square foot in excess of $264/psf. Two single family properties sold in excess of $1M and eleven sold in excess of $750K. The Total Market Value for single family residences was $31,799,350. Three hundred and forty eight (348) condominiums sold with an average price of $391K and an average sale price per square foot of $326/psf. The Total Market Value for condominiums was $136,208,500. One hundred and sixty (160) multi-family properties sold with an average selling price of $526K and an average price per square foot of $184/psf. The Total Market Value for multi-family residences was $84,590,516.

The Total Market Value for single family residences, condominiums, and multi-family residences in Somerville was $252,598,366.

Notable private development included Planning Board approval for the Residences at 380 Somerville Avenue in Union Square, and the passage of a $25.75M bond for the construction of a T-station at Assembly Square. I worked with ICON architecture, inc. for the design of the thirty-unit USQ project. Richard DiGirolamo was the attorney. The passage of the bond helps the development of the Assembly Row site by the Federal Realty Investment Trust (FRIT). The following link leads to an article that describes the project: