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Goode & Farmer Report – Provincetown, Truro and Wellfleet Year End 2013

Goode & Farmer Report – Provincetown Truro and Wellfleet Year End 2013

Well, we all thought 2012 was a year filled with trepidation and anxiety. That was before we experienced 2013 – the year of the government shutdown, the Boston Marathon bombings, Washington DC gridlock and numerous other international diversions.

While not a record breaker relative to last year, 2013 was in fact a very strong year on the Outer Cape. Nationally, one of the biggest news stories was improving real estate markets as supported by the S&P Case-Shiller 20-City Home Price Index showing home prices up 13.61% over last year – the largest gain in almost 8 years.

The strength of our local market is important as it has created equity for homeowners, boosted buyer confidence, and pulled many underwater homeowners into positive equity positions. Year-end results again seem to have surpassed what many in the industry expected. Total sales in Provincetown were down 12% from 229 units in 2012 to 201 units in 2013. Total volume closed was up 4% from $127M to $132M in 2013.

There were 124 condominium sales in 2013 totaling $56M vs. 166 condo sales in 2012 totaling $70M – a decrease of 25%. The average sale price for condominiums in Provincetown was up 8% over 2012 to an average sale price of $453K. The time on market for condos decreased by an average of 33 days this year. The average price per square foot for condos sold was $526.

Single-family home sales in Provincetown remained strong with 48 sales in 2013 totaling $49M vs. 52 sales for $47M in volume in 2012 – a 5% increase in volume. The average sale price for a single-family home was up 12% to an average sale price of $1.024M.

Provincetown leads the way on the Cape for positive real estate news and tends to follow the key downtown Boston neighborhoods in performance stats more than other towns on the Cape. Provincetown continues to attract buyers from cities and towns around the country and international buyers who have visited over the years that now want to have a home here on the Outer Cape.

This market dynamic continues to build the case for spring 2014 being another historically opportune time for those sellers who have been waiting on the sidelines to put their property on the market. This strong demand for Provincetown real estate by more confident buyers just may be the highest in many years.

 

PTOWN chart

 

 

 

 

 

 

 

 

 

 

 

Other towns on the Outer Cape did relatively well too. The number of single-family sales in Truro was down a moderate 9% to 48 from 53 in 2012. The average sales price was down 15% to $594K from $698K last year. The Truro market consists mostly of single-family homes.

In Wellfleet, the average sales price of single-family properties sold increased slightly to $536K from $532K last year. The number of sales decreased by 13% to 70 from 80 in 2012. Wellfleet is predominantly a single-family sales market as well.

 

TRURO WELLFLEET chart

 

 

 

 

 

 

 

 

 

 

A very active real estate market is indeed back – along with improving prices! And nowhere is this more evident than in continued buyer confidence in Provincetown and the Outer Cape.

Buyers do need more choices though as inventory remains low. Positive buyer and seller attitudes coupled with a continuation of relatively low mortgage rates and an improving economy bode well for 2014 being a great year to jump in the market and own a piece of paradise.

Please call or stop in if you are considering selling or buying, or if you are just curious as to what your home is worth. Our business philosophy has always been that the best-informed buyers and sellers are most satisfied with their real estate results. And that’s what we do best!

 

 

 

 

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Home Appreciation Back To Historic Norms

Zillow sees home price appreciation headed back to historic norms

 

The cumulative value of U.S. homes is expected grow by 7.9 percent in 2013 — the biggest annual increase since 2005 — according to an analysis by Zillow, which expects gains to continue into this year, at a slower pace.

“The housing market is transitioning away from the robust bounce off the bottom we’ve been seeing, toward a more sustainable, healthier market,” said Zillow Chief Economist Stan Humphries in a statement. “This will result in annual appreciation closer to historic norms of between 3 percent and 5 percent.”

Zillow said two years of home price appreciation have added $2.8 trillion to the cumulative value of U.S. homes –  or 44 percent of the $6.3 trillion drop seen from 2007 to 2011

 

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First Annual Decline For Existing Home Sales In Over 2 Years

Interesting INMAN post with a national perspective mirroring the issues we are seeing locally in both our primary and second home market.

Existing-home sales post first annual decline in more than 2 years

Higher mortgage rates, constrained inventories and tight credit slowed pace of sales in November.

The uptick in construction will help elevate the consistent inventory shortages we are seeing, and the lessening of negative equity will help as Zillow said that by 2014 U.S. homes will have recovered 44 percent of the total value they lost from 2007 to 2011.

Teke Wiggin Staff Writer, INMAN

Higher mortgage rates, constrained inventories and tight credit slowed the pace of existing-home sales for the third month in a row in November, producing the first annual decline in sales in more than two years, the National Association of Realtors (NAR) reported today.

Existing-home sales dropped 4.3 percent from October to November, to a seasonally adjusted annual rate of 4.9 million, and were down 1.2 percent from a year ago, marking the first time in 29 months that sales were below year-ago levels.

“There is a pent-up demand for both rental and owner-occupied housing as household formation will inevitably burst out, but the bottleneck is in limited housing supply, due to the slow recovery in new-home construction,” said NAR Chief Economist Lawrence Yun in a statement.

Rents are rising at the fastest pace in five years, Yun said, and annual home prices are rising at the highest rate in eight years. The spike in mortgage rates that occurred in late spring of this year has hampered home sales over the last few months, Yun and others say.

Members of the Federal Reserve’s Open Market Committee announced Wednesday that the Fed will finally begin to reduce its $85 billion-a-month purchases of Treasurys and mortgage-backed securities in January. The news did not immediately drive up mortgage rates, but a Fed pullback is still expected to nudge them up further.

If interest rates rise, that could further crimp existing-home sales. Market indicators suggest they are likely to decrease for at least another month. NAR’s Pending Home Sales Index — a forward-looking indicator of sales — dropped for the fifth straight month in October. Purchase loan applications recently hit a one-year low.

Yun recently predicted that sales of existing homes will remain flat in 2014 due to headwinds including declining affordability, limited inventory and tight mortgage lending standards.

Despite declining home sales, the outlook for the housing recovery is by no means bleak. Other market barometers point towards improvement. Single-family housing starts jumped to their highest level in well over five years in November, increasing 20.8 percent month over month and 26 percent year over year, the U.S. Census Bureau reported.

The uptick in construction could alleviate an inventory shortage that many analysts say has constrained demand, perhaps boding well for home sales in the long term. Meanwhile, sales of new single-family homes skyrocketed in October, ending a three-month slump that began in July and providing evidence that elevated mortgage rates have not seriously hobbled the housing recovery, research firm Capital Economics said.

While the number of existing homes for sale at the end of November slipped 0.9 percent to 2.09 million, the amount of time it would take for those homes to clear at the current sales pace increased to 5.1 months, up from 4.9 months in October and 4.8 months a year ago, NAR reported.

The median price of an existing single-family home slid 0.6 percent from October to November, to $196,300, but was up 9.4 percent from a year ago. Elevated home prices have begun to chip away at buying power, analysts including Yun say.

But the price appreciation has also freed millions from the shackles of negative equity, making it possible for them to sell their homes without having to resort to a short sale. Zillow said that by 2014 U.S. homes will have recovered 44 percent of the total value they lost from 2007 to 2011.

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2013 Provincetown Sales

Interesting “aerial” view of the 172 property sales in Provincetown in 2013.

Each dot represents one of the 172 sales of single family properties and  condominiums sold in 2013. They seem pretty balanced East End to West End, don’t they?

I’ll post more on that perennial discussion…which end of town has the most sales, the higher prices , as we move into the spring market.  I think what we are going to find is that the answer is so subjective, even when we look at empirical data which will show a healthy balance between the two.

 

12 month sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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US Economy On Best Footing Since 2007

Interesting year in review article from Lou Barnes at INMAN.

US economy is on best footing since 2007 — maybe even 1998

Lou Barnes INMAN Contributor

As with all New Year look-aheads in this space, begin with Peter Drucker: “Nobody can predict the future. Stick with a firm grasp of the present.”

Thus a focus on where we are, and things to watch, not wild swings at the blue sky.

Then note that we focus on real estate, investors and owner-occupants, mortgages and credit. The stock market does affect the economy and interest rates from time to time, but its wanderings defy grasp, firm or otherwise.

Changing my mind is a painful process. An original hypothesis may have grown obsolete, but a new one can double the chance of error. Nevertheless, the U.S. economy is on a better footing and facing lighter headwinds than any time since 2007, and maybe since 1998.

On the turn of the century we labored in the goo of a blown stock bubble, and then splattered credit and housing bubbles all over our faces. The bulk of those messes is past. The most durable and stiff breeze against us, still: Since circa 1990 global competition has capped U.S. wages.

The table set, here follows the watch list:

Incomes

Stagnant income has been the primary force frustrating the Fed’s stimulus, and tripped every Fed forecast since the show stopped in 2008.”

Above all else, watch incomes, especially wages in the bottom two-thirds of the workforce. Stagnant income has been the primary force frustrating the Fed’s stimulus, and tripped every Fed forecast since the show stopped in 2008.

Inflation

Until incomes grow, a ramping of inflation is impossible. That was your dad’s — or granddad’s — problem.

The Fed

So long as incomes and inflation behave, the Fed can and will continue extreme stimulus. It has to pull back from QE and will, even if the economy slows.

Credit

Next to incomes the most important thing to watch. We cannot accelerate, or even get off Fed life support without it. My very smart friend, Paul Kasriel, has detected an acceleration in bank credit, one strong enough to offset the gradual end of QE. I can’t find it. I will look, early and often.

Regulation

Ow and ouch. Most folks have noticed the difficulty the administration has had with “Obamacare.” These are the same officials who have presided over implementation of Dodd-Frank. The nation has felt the chaos of “Obamacare” for two months. The same people have been rearranging the financial world for four years. It’s amazing that we make any loans at all. At banks the combined effects of new capital requirements and the Volcker Rule are incalculable, but none lead to more credit.

Mortgages

Under the heading “Everybody Gets Lucky,” the White House has at last succeeded in replacing the Fannie-Freddie regulator. The White House’s intentions (trying fitfully for three years): Find somebody who would make life easier on underwater households, specifically by forgiving loan balances, a very bad idea. Now they’ve got their guy, Mel Watt, but the foreclosure tide has receded to scattered puddles. However, he may be just the man to lift the dead hand choking mortgage credit. At the top of the we’ll-see list.

Housing

Will not lead a cyclical recovery. Not. See “incomes,” above. Also far too many households damaged by the Great Recession. Good jobs replaced by poor ones, savings exhausted, credit damaged. Hey, Mel Watt! Want to do something useful for foreclosed families and the nation? Shorten the punitive lock-out intervals for new mortgages. Housing will over time repair itself the old-fashioned way: As rents rise, a new generation will grasp the big benefit of homeownership: The monthly payment stays put, and the mortgage balance falls over time for the persistent and disciplined.

Wild cards

The whole friggin’ outside world! Which is today a lot bigger relative to us than it used to be. One major nation is in genuine recovery: the United Kingdom. Europe is a wreck with no structural political progress at all, financial and social stresses rising. Japan’s risks are internal, but we’d all get wet in the tsunami following implosion. China is an all-time black box. Makes us look well-governed. Perverse benefits: Trouble over there might help here, just as the U.K. looks safer for business than the Continent.

Rates

Oh, that. Mortgages will rise into the fives on the slope of GDP. Or not. :-)

 

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Happy New Year

winter 1

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Housing Prices Cool Down

Another repost from my new favorite writer with a national slant. Brena Swanson of Housing Wire.


Housing prices cool down amid winter freeze

Annual home price growth is not as robust: Clear Capital

Home prices dipped back down to 10.8% year-over-year growth, a meager decrease from last quarter’s 11% annual growth, the latest Clear Capital Home Data Index shows.

The HDI compares the most recent four months to the previous three months, with no fixed-start date to reduce time delay.

 

“As the year comes to a close, make no mistake, home prices across the country are cooling from the red-hot 2013 recovery,” said Alex Villacorta, vice president of research and analytics at Clear Capital. “Though some market observers may take this as a sign of a deflating bubble, we see this as a natural, and welcomed evolution on the horizon of the new housing landscape.”

In addition, the quarter growth witnessed a more substantial tumble and fell to 1.8% from the previous quarter’s growth of 3.3%.

The Midwest and Northeast were the only two regions to experience small gains in yearly rates of growth over the previous quarter.

“Since the market trough in the fall of 2011, national prices are up 17%, undoubtedly a strong resurgence in overall prices. Yet, national prices today are back to where they were in 2003, indicating that overall the housing market is at pre-run-up norms,” Villacorta added.

Meanwhile, REO sales made up 21.6% of all national sales over the previous quarter, which is significantly lower than peak rates of 41% in 2011. However, distressed activity, as a portion of sale saturation, is expected to increase over winter as buyers prepare for a more active spring season.

For the first time, Phoenix was kicked out of its number one spot on the top 15 performing cities list, as the city was one of the first markets to experience a sustained recovery alongside its high levels of distressed sale saturation.

“Understandably, many current home owners would like to see hot gains continue for some time to come. Market participants, however, are better served by a cooler and more sustainable recovery,” Villacorta said.  “Moderating gains will create a stable market, instilling confidence in a broader base of buyers.”

 

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Boston Is One Of The Healthiest Markets

I like Scott’s take on what constitutes a healthy real estate market.  A more balanced inventory picture certainly is part of it.

Greater Boston one of the “healthiest” markets?

Posted by Scott Van Voorhis

The Boston area has been anointed one of the “healthiest” real estate markets in the country by real estate website Zillow.

In fact, we weigh in at No. 6, behind only the top California markets and Denver, healthier than 75 percent of the hundreds of markets surveyed by Zillow.

And how did Zillow come to this conclusion? Apparently, we have a relatively low foreclosure rate – just one in every 10,000 was foreclosed on in October – while just 12 percent of homeowners in the Boston area are mired in the negative equity trap.

Overall, home values were up more than 9 percent in October to a median of $343,000.

I beg to differ.

Zillow’s metrics speak volumes about the health of the Greater Boston jobs market, one of the strongest in the country for some years now.

More high-paying jobs compared to other metro markets mean higher prices, less negative equity and fewer foreclosures. You don’t have to be a rocket scientist to figure out that one.

But while Boston-area sellers are doing better now, this has to be one of the worst markets in the country for home buyers right now.

Listings of homes for sale are skidding along at all time lows and construction of new homes and condos remain mired in what has become a decades-long slump.

Some buyers have become desperate enough to resort to mass mailings in a hunt for potential homes to buy.

At least for buyers, the Boston area is hardly a healthy market. In fact, right now, it has to be one of the sickest housing markets in the country, if measured by buyer frustration.

So what’s your take? Is Greater Boston really one of the country’s healthiest housing markets? And frankly, what does “healthy” truly mean when we are talking real estate?

 

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Sellers No Longer Sitting So Pretty?

It is smart to pay attention to what the national market prognosticators are thinking and then digesting the information relative to our market. We need to pay attention to the NAR too. But when Lawrence Yun of NAR says, “…sellers cannot keep jacking up the prices since there is a lack of buyers…” we need to be a bit suspect. This doesn’t sound like a savvy sound bite from the leader of NAR, and it is not the case in our markets.  Whatever happened to the natural dynamic of the supply and demand curve Lawrence?

Substantial price jumps are unlikely

Brena Swanson of Housing Wire

As more inventory hits the housing market and buyers rebel against rising home prices, the real estate market is likely to shift from seller dominance to one that is more counterbalanced by buyer reluctance to acquire homes deemed too expensive.

The tighter inventory conditions of this recent spring and summer are going away as the spring months of next year start to approach, analysts say. Right now, builders are trying to make up for a lack of inventory with new homes,  Lawrence Yun, chief economist for the National Association of Realtors, claimed.

According to the latest Home Price Index report fromCoreLogic, home prices, including distressed sales, increased by only 0.2% in October when compared to September.

“In October, the year-over-year appreciation rate remained strong, but the month-over-month appreciation rate was barely positive, indicating that house price appreciation has slowed as expected for the winter,” said Mark Fleming, chief economist for CoreLogic.

“Based on our pending HPI, the monthly growth rate is expected to moderate even further in November and December. The slowdown in price appreciation is positive for the housing market as almost half the states are now within 10% of their respective historical price peaks,” Fleming said.

The report comes with both good and bad news. It is good news certainly for the owners and home sellers who are getting the appreciation and housing equity increases, in addition to helping the economy in terms of consumer spending, Yun explained.

However, the report is not as positive for homebuyers. “There are still in my view a lot of potential homebuyers getting blocked out from buying due to rising home prices,” Yun said.

He added, “It is a clear signal that sellers cannot keep jacking up the prices since there is a lack of buyers. More housing inventory is coming into the market from new home construction, but it is still a sluggish pace.”

If prices increase, homebuyers may choose to step out of the market if sellers do not adjust their list prices.

Home prices, including distressed sales, increased 12.5% annually in October, marking the 20th consecutive monthly year-over-year increase in home prices.

“In terms of home price appreciation, the housing market appears to be catching its breath as we head into the final months of 2013,” said Anand Nallathambi, president and CEO of CoreLogic.

“The deceleration in month-on-month trends was anticipated as strong gains in home prices over the spring and summer slow in line with normal seasonal patterns and the impact of higher mortgage interest rates,” Nallathambi added.

Heading into 2014, sellers are still in fairly good shape with prices edging up, but they don’t have that much further to rise, CoreLogic suggests.

 

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Favorite New Listing Of The Week

 

This house has always been one of my favorites in the East End. It is in the gallery district next to the house with the huge front yard, and one house east of Ciro and Sals restaurant alley. MLS copy below.

$1.695M, 436 Commercial Street is being offered for $1.696M, 4 bedrooms, and 4 baths, with 3,620 sf and a 9,147 sf  lot. Famous Provincetown artist, Charles Hawthorne made his home here and built the grand Federal addition. This is a home for entertaining with its floor through design and separate suites. A large chefs kitchen dominates the back of the house with formal dinning area. Custom built in closets and cabinets were done in the period style along with wood work by fine craftsmen. There is a very large master bedroom suite with a deck overlooking the garden. Peeks of the water is an added bonus!

 

436 Commercial

 

 

 

 

 

 

 

 

This is a legal two family home giving the new owner condo possibilities.