48 Grant St, Lexington

Market Analysis for Doug Orr, of Orr Homes LLC

Contents

  1. Description of Home
  2. Market Dynamics
  3. Analysis of Relevant Properties
  4. Pricing Recommendation
  5. Marketing

Description of home

48 Grant St will be a home of unsurpassed quality in a 'to-die-for' location steps to the town center of Lexington. New construction by one of the premier builders in the town who always builds homes where the buyer reaction is 'WOW'!  

The home will have 5 bedrooms, with the master and 3 family bedrooms, each with attached bathrooms, on the second floor and a guest bedroom with an en-suite bathroom on the first floor. The home has 5 bedrooms in total, 5.5 bathrooms, 2 car garage on 0.29 acres.

This market analysis assumes the first floor, second floor and basement finished for a total living area of 5430 sq ft.



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Market Dynamics

We have been experiencing shortages of housing inventory in Lexington over the last 5 years or so. There are always a number of buyers looking to buy in Lexington because of the strong school system, the community dynamics and vibrant downtown. People like the feeling of the downtown area, and want to stop and have a coffee, or have dinner at the many restaurants, or just watch the world go by, chatting with folks who are out and about. The Minuteman bike path and conservation areas close by pull those who desire an outdoor lifestyle while still remaining within commuting distance to Boston.

The Lexington market has seen increasing prices over the last few years given the limited inventory. The demand for homes in Lexington far outweighs the supply and each month a snapshot of available homes for sale shows the declining inventory levels. 

Current average home prices in Lexington are well above the average prices obtained at the prior peak of the market in 2005. Average single family home prices have been increasing steadily since 2009, which was considered the bottom of the market in Lexington. The real estate downturn is truly over and the market has fully recovered.

Sales distribution statistics for single family homes show that the $1M-$1.5M price-range is the most active in Lexington. The next busiest price range in Lexington is the $1.5M - $2M price range. This is an indicator that new construction is having a significant impact on the average single family home prices in Lexington. The number of new construction homes being built in Lexington in 2013 was 55 homes, 70 homes in 2014, 71 homes in 2015, and 66 homes in 2016.

Before reviewing the price per square foot statistics, it is important to throw in a caveat. There is wide variability amongst agents as to what is included in the living area reported in MLS.  In some instances, agents will include a finished component of the basement in the living area, which is acceptable so long as how the living area is calculated is disclosed.   Other agents follow the living area reported in public record, which never includes finished areas in the basement, but will then note in MLS that there is a finished basement. To this end, it is important to review each individual listing deemed as relevant to determine the ‘true’ price per square foot of above ground living area before using it as a determinant on the price of your home.

 Reviewing the price per square foot chart below shows us that the average price per square foot in Lexington in the $1.5M to $2M price range is around the $378 per square foot.  It’s important to note that the maximum price per square foot achieved varies across most price ranges, along with the minimum obtained for each price range.

According to the chart below, single-family homes built in Lexington before the 1900’s average at $411 per square foot.

The chart below shows that single family homes in Lexington of similar size to your home in the 3,000 square foot range, have an average price per square foot of $382 but it increases to $390 per sq. ft. when you decrease to the 2,000 square foot range. It is common across municipalities to see an increase in the price per square foot for smaller sized homes, as it reflects the minimum cost of a home in a town irrespective of the property size.

The chart below shows how many months’ supply of inventory there is in a given price range. It uses the assumption that given the same rate of sales over the prior 12 months, and considering current inventory available for sale, how many months it should take to sell the available inventory. This is referred to “Absorption” in the real estate world. Any price range where there is more than 7 months’ supply, we consider there to be an oversupply of inventory, also known as a ‘buyer’s market’. Anything between 4 – 6 months is considered a balanced market. Anything less than 3 months’ supply is considered a shortage of inventory on the market at this price range, also known as a ‘sellers’ market’. As can be seen, currently, absorption rates for all homes in the $1.5M - $2M price range are just over 2 month’s supply showing a serious shortage.

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Analysis of Relevant Properties

The following map shows the  homes that we believe to be of value in determining the price of your  home. Below the map you will find basic information  provided for each home including the price the home was  listed at, and the price the home sold at (if sold), the listing date, Dayso on market, Bedrooms, Bathrooms, living area size and lot size.  Noted for each home is a classification of Relevance which outlines whether we think the  property is valued Less (L), Relevant/Comparable (R) or Higher (H) than  your home. The notes for each home outlines the similarities and differences between  your home and the one being analyzed.

Your home:  5430 sq ft including the finished lower level | 5 bedrooms | 5.5 bathrooms | 2 car garage | 0.29 acres

This home is smaller than your home with 2432 sq ft above ground, and a total of 3395 sq ft when considering the finished lower level. Your gut rehab home using the same foundation will be approx. 4000 – 4500 sq ft in size. This home has 4 bedrooms, and it has 3.5 bathrooms.  It has a 2 car attached garage and is on 0.28 acres just steps from the town center on a quiet side street so its location is superior to yours.  It does not have central air.  The home was built in 1925 and has been renovated but will not compare to your new construction on an existing foundation.  The home a classic colonial. The home had competing offers and sold for over the asking price.  It sold for $462 per sq ft when considering the finished basement also.

Relevance: Less
Given the slight location superiority, but inferior build quality and size your home will sell for more than this home.

Your home:  5430 sq ft including the finished lower level | 5 bedrooms | 5.5 bathrooms | 2 car garage | 0.29 acres

Marcus sold this home.  It is smaller than your planned new construction at 3800 sq ft which also includes the finished basement. It is on a smaller lot of 0.18 acres in an inferior location to your home. It has a 2 car garage, with 5 bedrooms and 4.5 bathrooms. The builder commented that she is losing money on this home. The home had been on the market for 65 days with several price reductions. The home had a poor layout on the first floor which buyers resisted and the builder installed solar panels.  This is not a negative but buyers don’t care if a home has them or not so there was wasted money in installing this system. It has sold for $408 per sq ft.

Relevance: Less
Given the smaller size, the smaller living area, inferior location your home will sell for more than this home.

Your home:  5430 sq ft including the finished lower level | 5 bedrooms | 5.5 bathrooms | 2 car garage | 0.29 acres

This home is in an inferior location to your home, although it is walking distance to the town center and on a quiet side street.  It is smaller than your home at 4466 sq ft, of all above ground living area, your home is 5430 sq ft including the finished lower level. It is on a similar size lot of 0.28 acres.  It has 5 bedrooms and 4.5 bathrooms, 2 car garage.  It sold for $375 per sq ft.

Relevance: Less
Given your superior build quality, extra bathroom, inferior location your home will sell for more than this home.

Your home:  5430 sq ft including the finished lower level | 5 bedrooms | 5.5 bathrooms | 2 car garage | 0.29 acres

This home was built in 2012 so it is still relatively new construction. It is in an inferior location to your home   It is smaller than your home at 4092 sq ft. It is on a larger lot of 0.42 acres and has a 2 car garage. It has 5 bedrooms and 4.5 bathrooms. It went under agreement after 4 days. It sold for $411 per sq ft.

Relevance: Less
Given that it is a smaller size, resale home, inferior location and 1 less bathroom than your home, so your home should sell for more.

Your home:  5430 sq ft including the finished lower level | 5 bedrooms | 5.5 bathrooms | 2 car garage | 0.29 acres

This home is on the same road as your home, but further from the town center.  It is on a larger lot of 0.49 acres, but I believe the home had some wetlands behind it and I believe it was in a floodzone. It is larger than your home at 5800 sq ft with 7 bedrooms, and 5 bathrooms, with a 2 car garage. It sold for $330 per sq ft.  This home worries me from the perspective of your new construction but the price per sq ft is low.

Relevant, but yours should sell for more.
I didn’t see the home so don’t know the quality of construction, but  with your superior location and the other side of the road you should  get a higher price per sq ft.

Your home:  5430 sq ft including the finished lower level | 5 bedrooms | 5.5 bathrooms | 2 car garage | 0.29 acres

Obviously you know this home 😊  It is 4049 sq ft of living area including the mudroom in the lower level.  It has 5 bedrooms, with 4 full and 2 half bathrooms. It has a 3 car attached garage and is on a 0.44 acre lot.  It sold for $485 per sq ft.

Relevance: Less
Given your plans for 5430 sq ft, in a superior location, your home will sell for more than this one.

Your home:  5430 sq ft including the finished lower level | 5 bedrooms | 5.5 bathrooms | 2 car garage | 0.29 acres

This home is new construction located in the popular Follen Hill neighborhood. It is smaller than your home at 4900 sq ft of all above ground living area. It has 1 bathroom less than your home, is on a similar size lot. It has a 3 car attached garage versus your 2 car attached garage. It sold for $417 per sq ft.

Relevance: Relevant but less
Given your plans for 5430 sq ft of finished living area including the basement, 1 less bathroom, superior location I believe it is relevant but will sell for less than your home.

Your home: 5430 sq ft including the finished lower level | 5 bedrooms | 5.5 bathrooms | 2 car garage | 0.29 acres

One of my buyers agents has this home under agreement for $2,050,000 after the home had several price reductions and was on the market for $2,095,000. The home was an expansion of an existing home with only the foundations and a couple of walls left. The quality was good. The home is slightly smaller than your home, on a larger lot in Merriam Hill. It has 1.5 bathrooms less than your home. It sold for $394 per sq ft.

Relevance: Relevant but less
Given your plans for 5430 sq ft including the basement, 1.5 less bathrooms, similar location I believe it is relevant but will sell for less than your home.

Your home:  5430 sq ft including the finished lower level | 5 bedrooms | 5.5 bathrooms | 2 car garage | 0.29 acres

This home was built in 1905 and it is included here to show what buyers will spend when we are talking about proximity to the town center. The home is 4934 sq ft in size which is smaller than the home you are building.  Buyers prefer new construction, and these buyers have been doing a lot of work to the home since they bought it. It had 5 bedrooms, and 3.5 bathrooms and was on 0.63 acres with a 2 car detached garage.  It sold for $432 per sq ft.

Relevance: Less
Given the fact that this home is not new construction, smaller living area, 2 less bathrooms, but is in a similar location in Merriam Hill, your new construction is relevant to this home but yours should sell for more.

Your home:  5430 sq ft including the finished lower level | 5 bedrooms | 5.5 bathrooms | 2 car garage | 0.29 acres

This home is on the same road as your home, but is further from the town center and on the other side of the road. It is almost on the corner of Saddle Club and Grant.  It is larger than your home at 7670 sq ft, with 7 bedrooms and 6.5 bathrooms and includes the finished basement, with a 3 car garage on a larger lot of 0.49 acres.  This is an example, along with the other home on Grant St of where bigger is not necessarily better. Both homes had 7 bedrooms, but most buyers don’t need any more than 5 bedrooms – they do want an office also, but no need to have 7 bedrooms. They would prefer to have more living area than quantity of bedrooms. This home was sold as a builder FSBO and I would anticipate an inexperienced builder. The home sold for $280 per sq ft.

Relevance: Relevant but yours will sell for more.
You will sell for more than this home I believe due to your superior location, build quality and attention to floorplan.

Your home:  5430 sq ft including the finished lower level | 5 bedrooms | 5.5 bathrooms | 2 car garage | 0.29 acres

This home is smaller than your home at 5200 sq ft of all above ground living area. It has 1 more bedroom than your home with 1 less half bathroom. It is on a larger lot in an inferior location. The home sold for $423 per sq ft.

Relevance: Relevant but less
Your home should sell for more than this home given the larger size of the home and superior location.

Your home:  5430 sq ft including the finished lower level | 5 bedrooms | 5.5 bathrooms | 2 car garage | 0.29 acres

This home is smaller than your home at 4742 sq ft. It has 1 more half bathroom than your home and is on a slightly larger lot. The home was built in 2008 and is lovely quality. It sold for $464 per sq ft.

Relevance: Relevant, but less
Given the smaller size of the home, superior location, I believe it is relevant to your home but yours will sell for more.

Your home:  5430 sq ft including the finished lower level | 5 bedrooms | 5.5 bathrooms | 2 car garage | 0.29 acres

This home is new construction further from the town center, but in a desirable area. It is on a larger lot of 0.77 acres, but some of this was wetlands and in a floodzone.  It is smaller than yours at 4040 sq ft, with 4 bedrooms and 4 full and 2 half bathrooms.  It was built by Bob Phelan. It had a 2 car garage. The floor plan of this home wasn’t appealing to buyers as it was quite disjointed and had no real open plan areas which is what the buyers want. It was on the market for 111 days before going under agreement. It sold for $559 per sq ft.

Relevance: Relevant but less.
Given that you are building a larger home closer to the town center, extra bedroom, extra bathroom, and a great layout, but being on a busier street I believe it is relevant to your home but you will sell for more.

Your home:  5430 sq ft including the finished lower level | 5 bedrooms | 5.5 bathrooms | 2 car garage | 0.29 acres

This home is in a superior location, but is smaller than your home at 4852 sq ft which includes the finished basement. This is a home built in 1895 but extensively renovated recently. It has 1 less bedroom and 1 less half bathroom than your home. The home was stunning inside. This is just a reference point as it is an antique home. It sold for $492 per sq ft.

Relevance: Less
Given the home is built in 1895 and is not new construction, smaller living area, 1 less bedroom, 1 less bathroom I believe your home will sell for more.

Your home:  5430 sq ft including the finished lower level | 5 bedrooms | 5.5 bathrooms | 2 car garage | 0.29 acres

This home is in an inferior location to your home although some buyers do prefer to be in a ‘subdivision’ style location. It does have restrictive covenants though which turn some buyers off. For instance you cannot have a fence around the home. It is smaller than your home at 5100 sq ft in size, and it is on a larger lot of 0.8 acres. It has proximity to the middle school, but most buyers prefer proximity to the town center. It has a 3 car garage along with 5 bedrooms and 4.5 bathrooms. The home was first on the market in July 2015 and finally sold in September 2016 for full asking price after 378 days on the market. It has just come back on the market 5 days ago.  It sold for $485 per sq ft.

Relevance: Relevant but less.
Given its similar size and larger lot versus the inferior location and 1 less bathroom I believe it is relevant but yours should sell for more.

Your home:  5430 sq ft including the finished lower level | 5 bedrooms | 5.5 bathrooms | 2 car garage | 0.29 acres

This home is a similar size to your home except this is all above ground living area and yours includes some in the finished basement. It has the same number of bedrooms, but has 1 less bathroom than your home. It is on a larger lot in a subdivision of similar homes. It has proximity to the middle school, but most buyers prefer proximity to the town center. The home was built in 2015 so it was almost new construction. It sold for $453 per sq ft.

Relevance: Relevant but less
Given the similar size, 1 less bedroom and inferior location I believe it is relevant to your home but your home should sell for more.

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Pricing Recommendation

Given your target price per sq foot of $600 this equates to a price of $3,250,000.

Its important to note that no homes have sold in Lexington in the last 12 months for over $3M.  5 homes sold over $2.5M at an average living area size of 7200 sq ft at an average price per sq ft sold of $381.

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