12 Hathaway Rd, Lexington

Market Analysis for Meg Newman

Contents

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

Description of home

12 Hathaway Rd will be a signature home in one of Lexington's most desirable neighborhoods. 

The home will have 5 bedrooms, with the master and 4 family bedrooms, each with attached bathrooms, on the second floor, a 'teen-suite' with a loft, bedroom and full bathroom on the third floor, a guest bedroom with an en-suite bathroom on the first floor, and a possible 8th bedroom in the lower level. The home has 7/8 bedrooms in total, 8.5 bathrooms, 3 car garage on 0.8 acres.

This market analysis assumes the first floor, second floor, third floor and basement finished for a total living area of 7,455 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 among 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 $2M - $5M price range is around the $374 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 after 2010 average at $371 per square foot.

The chart below shows that single family homes in Lexington of similar size to your home in the 7,000 square foot range, have an average price per square foot of $309. The value for new construction will be higher than this and a value closer to $375/sq ft is appropriate. 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 $2M - $3M price range are just over 3 month’s supply showing a serious shortage. Also the lack of data for $3M - $5M shows that there have been no sales over $3M in the prior 12 months.

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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, Days 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:  7,455 sq ft including the finished lower level | 7-8 bedrooms | 8.5 bathrooms | 3 car garage | 0.8 acres

This  home is larger than your home with a total of 9,447 sq ft when considering the third floor and finished lower level. This home has 6  bedrooms, and it has 8.5 bathrooms.  It has a 3 car attached garage (although one bay is tandem parking) and is on 0.41 acres in Munroe Hill and so the location is slightly superior to yours given the proximity of Munroe Hill to Lexington Center. It sold for $361 per sq ft when considering the four finished  levels.

This home sold in mid-2016.

Relevance: Relevant but yours should sell for less.

Given your homes slightly inferior location, and smaller size - your home will sell for less than this home.

Your home:  7,455 sq ft including the finished lower level | 7-8 bedrooms | 8.5 bathrooms | 3 car garage | 0.8 acres

This  home is larger than your home with a total of 8,229 sq ft when considering the third floor and finished lower level. This home has 6 bedrooms, and it has 7.5 bathrooms.  It has a 3 car attached garage and  is on 0.41 acres in Merriam Hill and so the location is slightly superior to yours given the  proximity of Merriam Hill to Lexington Center. It is currently on the market for $412 per sq ft  when considering the four finished  levels.

The home has been on the market for 581 days - the primary reason is that the house sits on a corner plot but has no yard in the rear. At a lower price point a substantial yard would be a nice-to-have; but, at over $3.4M, buyers see it as a requirement. In addition, at $421/sq ft its price is substantially higher than comparable properties.

Given the number of days on the market I think if they were to reduce the price to $3.1M - $3.2M or below this home would sell.

Relevance: Relevant but yours should sell for less.

Given your homes slightly inferior location and  smaller size - your home will sell for less than this home.

Your home:  7,455 sq ft including the finished lower level | 7-8 bedrooms | 8.5 bathrooms | 3 car garage | 0.8 acres

This  home is larger than your home with a total of 7,970 sq ft - this includes a finished third floor but the lower level is unfinished (so it could be expanded to almost 9,000 sq ft). This home has 7  bedrooms, and it has 7.5 bathrooms.  It has a 3 car attached garage and is on 0.71 acres on Adams Street so the location is inferior to yours given the traffic on this road. It is currently on the market for $401 per sq ft when considering the four finished  levels.

The home has been on the  market for 260 days - the primary reason is that the house is unfinished.

Relevance: Relevant and yours should sell for a similar price.

Given your homes superior location and slightly smaller size - your home should sell for a similar price.

Your home:  7,455 sq ft including the finished lower level | 7-8 bedrooms | 8.5 bathrooms | 3 car garage | 0.8 acres

This home is the same size as your home with a total of 7,509 sq ft when considering the third floor and finished lower level. This home has 5 bedrooms, and  it has 6.5 bathrooms.  It has a 3 car attached garage and is on 0.69  acres on Adams Street so the location is inferior to yours given the  traffic on this road. It is currently on the market for $425 per sq ft when  considering the four finished  levels.

The home has been on the  market for 66 days - the primary reason is that the house is unfinished and was put on the market before the foundations of the new home were poured.

Relevance: Relevant and yours should sell for a similar price.

Given your homes superior location and comparable size - your home should sell for a similar price.

Your home:  7,455 sq ft including the finished lower level | 7-8 bedrooms | 8.5 bathrooms | 3 car garage | 0.8 acres

This home is larger than your home with a total of 8,600 sq ft when considering the third floor and finished lower level. This home has 6 bedrooms, and it has 7.5 bathrooms.  It has a 3 car attached garage and is on 0.70 acres in Burnham farms and so the location is comparable to yours. It sold for $367 per sq ft when considering the four finished levels.

This home sold in early-2016.

Relevance: Relevant but yours should sell for less.

Given your homes comparable location, similar plot size, but smaller size - your home will sell for less than this home.

Your home:  7,455 sq ft including the finished lower level | 7-8 bedrooms | 8.5 bathrooms | 3 car garage | 0.8 acres

This  home is the same size as your home with a total of 7,400 sq ft - this includes a finished third floor but the lowe level is unfinished (so it could be expanded to over 8,000 sq ft). This home has 5  bedrooms, and it has 6.5 bathrooms.  It has a 2 car attached garage and  is on 1.09 acres close to Lexington  Center but not in an established neighborhood and on a narrow and very poorly maintained road. It is currently on the market for $405 per sq ft  when  considering the three finished  levels.

The home has been on the  market for 294 days - the primary reasons are that the house sits on a narrow and very poorly maintained road, only has a 2 car garage and (personal preference here) the multi-color/barn-like look does not appeal to all buyers.

Relevance: Relevant but yours should sell for more.

Given your homes superior location and comparable size - your home will sell for more than this home.

Your home:  7,455 sq ft including the finished lower level | 7-8 bedrooms | 8.5 bathrooms | 3 car garage | 0.8 acres

This  home is slightly smaller than your home with a total of 7,751 sq  ft when considering the finished lower level (the home did not have a finished third floor). This home  has  5 bedrooms, and it has 6.5 bathrooms.  It has a 3 car attached  garage  and  is on 1.07 acres in FollenHill and so the location is  comparable to yours. It sold for $349 per sq ft  when  considering the three finished  levels.

This home sold in late-2017

Relevance: Relevant but yours should sell for more.

Given  your homes slightly superior location, and comparable size - your home will sell for more than this home.

Your home:  7,455 sq ft including the finished lower level | 7-8 bedrooms | 8.5 bathrooms | 3 car garage | 0.8 acres

This  home is the same size as your home with a total of 7,667 sq ft when considering the third floor and finished lower level. This home has 6 bedrooms, and it has 7.5 bathrooms.  It has a 3 car attached garage and  is on 0.83 acres on Adams Street so the location is inferior to yours given the traffic on this road. It sold for $325 per sq ft  when considering the four finished  levels.

This home sold in mid-2017.

Relevance: Relevant but yours should sell for more.

Given your homes superior location and comparable size - your home will sell for more than this home.

Your home:  7,455 sq ft including the finished lower level | 7-8 bedrooms | 8.5 bathrooms | 3 car garage | 0.8 acres

This  home is slightly smaller than your home with a total of 7,267 sq ft when considering the third floor and finished lower level. This home has  6 bedrooms, and it has 6.5 bathrooms.  It has a 3 car attached garage  and  is on 0.43 acres in Merriam Hill and so the location is slightly superior to yours given the  proximity of Merriam Hill to Lexington Center. But, the home sits on a narrow and steep road on the edge of Merriam Hill. It sold for $330 per sq ft  when  considering the four finished  levels.

This home sold in mid-2017

Relevance: Relevant but yours should sell for more.

Given your homes slightly superior location, larger plot, and larger size - your home will sell for more than this home.

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Pricing Recommendation

My analysis of the relevant homes outlined above suggests a final market value for your home of $3,050,000-$3,100,000.

This valuation does not include any hard-scaping/pool in the rear of the property.

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