Somerville is a wonderful city where each square has its own feel. Although no city in my market area has been totally immune to the effects of this market, Somerville is remaining an active market.
Somverille Housing Stats November 2008
As you can see from the chart above, absorption rates are quite low for the city. Only the multi family market is out of equilibrium. This is due primarily to the fact that during the height of the market, so many contractors came into the city and bought up as many 2 and 3 family homes as they could. Somerville has a condo review board and the approval process slowed down the number of apartments converted to condos in the city. But these investors could make so much money selling each apartment individually that they bid up the price of multi family homes to a point where these homes no longer made financial sense to the typical multi family buyer – the first time buyer or small investor looking for rental income.
The average sale price over the last 6 months of multi family homes has come down to a much more realistic $471,296, so the “normal” multi family buyers are starting to come back to the market.