The latest trend in Greater Boston home sales is yet another reminder that this is a seller’s market.
Prices have risen on numerous Boston-area home listings after they were already on the market. This goes against conventional real estate wisdom that you consider a price cut to generate interest after being on the market for several weeks.
Some price increases can be the result of clerical errors needing a quick fix, but recently, homes across the Boston area have been listed at one price for weeks, even months, before going up by thousands of dollars.
The sellers boosted the list price for a $1.7 million Lovejoy Wharf penthouse condo by $10,000 earlier this month after it had been on the market at a lower price since the beginning of May. An 830-square-foot condo near Packard’s Corner jumped $40,000 in list price last week from the $470,000 initial ask when the property was re-listed last month. A Jamaica Plain condo is up $50,000 from its initial $700,000 asking price in early June.
There are plenty of examples, but many listing agents declined to explain the price increase on the record. Those who did speak offered a variety of reasons behind the decision. Largely, it boils down to marketing and capitalizing on a hot housing market.
“Sometimes just to get more action on a listing, you’ll see people maybe drop by $1,000 or go up just a little bit because it refreshes on everyone’s feed,” said Craig Lake, a senior vice president at Compass and the listing agent of the Lovejoy Wharf penthouse. “Interestingly enough, I have two requests to show after raising the price, just because it becomes fresh again in someone’s MLS feed or property search.”
They also raised the price because the sellers turned down an offer and wanted more room to negotiate, especially given more buyer interest in the city following months of focus on the suburbs during the worst of the pandemic.
Other brokers said agents sometimes raise the price on a listed property because renovations added value to the home.
There also can be instances in which there is so much buyer interest that the sellers think they underpriced the property. They may raise the price to fit their expectations, they said, especially in a market in which sales significantly over the asking price aren’t out of the question.
“A lot of the time, especially in a market like this, sellers will wonder why they have so much action on this property when, realistically, they should be like, ‘Wow, this is awesome,’ ” said Dan Duval, principal broker and partner at Elevated Realty. “So sometimes sellers will direct you to increase the price.”
Ben Leavitt, a real estate adviser at NextGen Realty and the listing agent for the Packard’s Corner condo that went up $40,000, noted that the sellers were motivated to increase the price after an earlier offer over asking fell through.
“If someone gets an offer for $508,000 on a property that is listed for $470,000, in their head, they think that’s what the property is worth,” Leavitt said. “It’s just a really hard thing to backtrack from.”
But Leavitt and Duval also said they don’t think increasing the price when a property is sitting on the market is something clients should necessarily consider, especially given how fast the market can change.
“I would never advise a seller do this,” Duval added. “It kind of throws up a lot of red flags to buyers who wonder what’s going on.”