Medford Continues Slow and Steady Growth With a Number of Sales Providing Value to Investors
Key Takeaways:
Average price per-square-foot sees solid gains in both two-family and three-family properties
Gross Sales Volume falls in both two and three-family, MLS-listed homes
Average days-on-market falls 10%, while price per-square-foot increases signaling a stronger market in 2019
Turnover rate of 3.16% in the three-family market
Market Insight: Good news again for property owners in Medford: in 2019, 7 sales surpassed the $300 per-square-foot mark. The three-family property located at 80 Morton Avenue set an interesting mark for those looking to sell their income property. That property is 2,349 square feet, and even though listed and sold in February, went $30K over-asking. A sales price of $1,130,000 (and pro-forma rent of $7,200 ($2,400/month for each two-bed)) establishes a gross rent multiplier of 157x – a bit less than I would anticipate, however, February marks a historically slow time to sell property. The asset located at 8 Willard Avenue (which was a sale I was involved in) generated a market-price and was fully leased generating $6,750 or a multiple of 152x gross rents. 8 Willard had a significant value add component for the new buyer.
Sellers can also be excited that the sale of 80 Morton pushed the per-square-foot ceiling to $483 – a 44.8% increase in the top price per-square-foot in 2018. The three-family market was also more active as the gross sales volume increased from $8.99mm to $11.399mm in 2019, while at the same time reflecting a higher price per-square-foot.
The gains in the two-family and three-family market can be attributed to the ‘Somerville Condominium Conversion Ordinance’, which caused more buyers to move away from Somerville to Medford. I expect more of the same in 2019 with owners looking to capitalize on proximity to areas such as Assembly Row access to downtown Boston, and a percentage of Somerville developer-buyers exiting the Somerville market.
Outlook for 2020: While 2018 reflected a banner year for many of the markets I looked at, 2019 was the banner year for Medford. 2019 recorded measurable gains, which could be due to buyers exiting the Somerville market, and other reasons stated above. While I expect steady growth (3-5% per-square-foot), I also expect the top-end of the market to remain high and repeat the gains seen in 2019.
In Medford in 2019, investor-sellers paid an estimated $12,365,491 in capital gains taxes to the Federal Government. For creative strategies to defer taxes and build generational wealth, please see my ‘Free Cash Flow’ Program for sellers.
Please make sure to check out my market reports in Brookline, Cambridge, Somerville, Everett, Malden, Watertown and Quincy. If are interested in selling, please check out my ‘Demand Driver’ or ‘Value Maximizer’ Programs for multi-family sellers or call/text me at 617 272 5440.
