Tag: Boston condo sales volume

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Condos Sizzle

Interesting post by Scott.

Condos party like it’s 1989

 

Posted by Scott Van Voorhis

Condos haven’t sizzled like this since the crazy condo boom of the 1980s.

OK, I took a little liberty with the headline. After all, by 1989 the great 80s condo boom had already started to go bust, but you get the point.

Condo prices are on a tear, rising 18.4 percent during the first two months of 2014 compared to last year, reports The Warren Group, publisher of Banker & Tradesman.

Even stranger still, condo prices have almost caught up with home values, which they traditionally lag by a considerable margin.

The median sale price for a condo in Massachusetts this February topped $281,000, just $4,000 below the median home price of $285,500, Warren Group numbers show.

So what’s going on here?

Well, for starters, the relentless decline in listings of homes for sale is doing more than just driving up Boston-area prices.

It also appears to be pushing some buyers into the condo market in search of affordable alternatives.

Of course, as more buyers switch to condos, that’s now having the unfortunate effect of driving up condo prices as well,

But we are also likely seeing the impact of empty-nesters moving into the condo market as well.

Remember all those Baby Boomers who wanted to downsize a few years ago, but couldn’t sell their homes? Well now they are finally making their move.

However, instead of buying another home, they are going condo

And, of course, let’s not forget all those luxury condos that are selling like hotcakes in downtown Boston – and skewing the median price upward.

“The 18.4 percent increase in condo median prices so far this year is an indicator that condominiums are increasingly popular and we have a strong mix of luxury condos in the sales totals,” said Tim Warren, chief executive of The Warren Group, in a statement.

“Empty-nesters are ready for a change in lifestyle and have the net worth to take the plunge,” he said.

 

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3 Reasons The Market Will Thrive In 2014

 

Another great and succinct post by the KCM gang!

3 Reasons the Housing Market Should Thrive in 2014

by 

three

Recently, HousingWire asked David Berson, chief economist at Nationwide, for his opinion on the near-term future of housing. Below are what Mr. Berson believes to be the three things you need to know about housing in 2014. We have included a quote from the article and a small comment from KCM for all three points.

Number 1: 2014 should prove to be the strongest year for housing activity since before the Great Recession

“Most economists expect an improved job market in 2014, with employment growth accelerating and the unemployment rate continuing to decline. That jobless rate drop will reflect more of a pickup in employment than further declines in the labor force participation rate. This will be the key factor improving housing demand this year, even if mortgage rates rise and affordability declines. While the housing market tends to do especially well when the job market improves and mortgage rates decline simultaneously, that combination of events occurs only rarely…People buy homes when their job and income prospects improve – even if it’s more expensive to do so – rather than buy when it is inexpensive to do so but they’re worried about keeping their jobs.”

KCM Comment:

We agree that the job market will continue to improve and that rising interest rates will not be a detriment to the market in 2014. As Doug Duncan, SVP and chief economist atFannie Mae, recently revealed:

“Consumers have taken the interest rate rise in stride. Expectations for continued improvement in housing persist, and sentiment toward the current buying and selling environment is back on track.”

Number 2: Demographics should start to favor housing activity

“If the economy expands at a faster pace this year, bringing a more rapid rate of job creation, that should translate into more households, raising housing demand. We won’t see all three million missing households return to the housing market at once. (That wouldn’t be a good thing for the housing market anyway, since that would be on top of the 1.2 million households that normally would develop this year; such a surge would swamp the existing housing supply). Beginning in 2014, the pace of household formations should accelerate to an above-trend pace for several years, pushing up housing demand.”

KCM Comment:

The Urban Land Institute recently released a report, Emerging Trends in Real Estate 2014, projecting that 4.48 million new households will be formed over the next three years. Millennials will make up a large portion of these new households. With the economy improving, we believe they will finally be moving out of their parents’ homes and, after they compare renting versus buying, many will choose homeownership.

Number 3: Mortgage availability shouldn’t worsen and may improve

“The rise in mortgage rates already has reduced mortgage origination volumes as refinance activity declines. If mortgage rates rise further this year, as expected, then refinance activity will fall still more. In response, mortgage lenders probably will ease lending standards to the extent possible under the QM rules to boost lending activity by increasing purchase originations. As a result, the increase in new households expected to be created this year, spurred by a stronger job market, should find that qualifying for a mortgage loan will be somewhat easier in 2014 than in prior years.”

KCM Comment:

We also believe that, as the refinancing market begins to dry up, mortgage entities will be more aggressive in the purchase money market (mortgages necessary to purchase a home). There even seems to be recent evidence that lending standards are actually loosening.

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How Cool Is This Chart?

How far will a million bucks go in NYC?

$1 million will likely net more space in NYC versus San Francisco and Boston.


By Business Insider

According to Knight Frank data cited by CNBC’s Robert Frank, a million dollars goes a lot further in Cape Town than it would in Monaco.

But what about in the U.S.?

We looked at housing list price data from real estate brokerage Movoto.com and real estate marketplace Zillow.com. The diagram below shows the number of square feet of housing that you can buy for $1,000,000, based on the median price per square foot in each city:

city-real-estate-chart-corrected

With a median list price of $666 per square foot, San Francisco’s real estate boom limits a million dollars to buying about 1,500 square feet. On the other end of the spectrum, the median list price in beleaguered Detroit is just $12 per square foot — 55 times cheaper than in San Francisco.

Considering all five boroughs, the median price per square foot in New York City is $424. Looking just at Manhattan however, that price jumps to an astronomical $1,538 per square foot, leading to $1,000,000 buying just 650 square feet.

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Buyers Feeling Blue

Another interesting post by Scott about buyer attitudes in Boston

Home buyers feeling blue

Posted by Scott Van Voorhis

Can’t look at one more fixer-upper? Tired of bidding wars on every half-decent home that comes on the market? Wondering when, if ever, prices will go down, or at least level off, in Greater Boston?

Wondering if we have gone from global warming to a new ice age?

If so, you’ve got a bad case of the home-buyer blues, with Boston area house hunters particularly vulnerable to this new malady, a new report finds.

Confidence in the housing market among Boston area buyers is falling, according to a newreport out by Zillow and is now somewhat below the national average.

Boston’s score on Zillow’s “housing confidence index” weighs in at 63.4, below the national average of 63.7.

Meanwhile, only 8 percent of Boston area renters want to buy in the next year, compared to 10 percent nationally.

By contrast, Las Vegas, Atlanta and Miami have the highest percentage of renters looking to buy.

Rising prices and a growing dearth of homes to actually look at are two likely suspects
here.

But Zillow is not the only one picking up on some increasingly negative vibes coming from home buyers as the spring market gets ready to kick off.

Only 25 percent of house hunters across the country think it is a good time to buy now, compared to 40 percent last year, Redfin reports.

OK, to borrow a popular line from Realtor trade groups, maybe it’s all the nasty weather out there that is getting buyers down.

However, while the wintry view outside the window doesn’t help, there is clearly much more to this story than that.

 

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Boston’s Best Selling Condo Buildings

Interesting post by  Tom Acitelli at CurbedBoston – with some surprising results.

 

Boston’s Best-Selling Condo Buildings

Tuesday, March 11, 2014, by Tom Acitelli

dorave141.jpg
[141 Dorchester Avenue]

‘Tis a busy, busy time in the Boston condo market, what with lightning-fast sales and super-low inventory (two not-unrelated phenomena). But which are the busiest of the busiest condo buildings in the city? Thanks to the crackerjack research of our pals at PropertyShark, we can give you a very good idea. Herewith the 10 Boston condos with the most sales in 2013. Some of the usual suspects are here—Harbor Towers, the W Boston—but also a few surprises (and surprise omissions, we think:paging Millennium Place?). A couple of caveats: The 10 cover closed deals in calendar year 2013, and only deals of at least $10,000.

42 EIGHTH STREET
Number of sales: 48
Median sales price: $380,000
Notable sale: a 1,295-square-foot 1-BR, 2-BA for $700,000
42 8TH STREET, BOSTON, MA 02129
141 DORCHESTER AVENUE
Number of sales: 46
Median sales price: $610,000
Notable sale: a 1,690-square-foot 2-BR, 2-BA for $845,000
141 DORCHESTER AVENUE, BOSTON, MA 02127
45 PROVINCE
Number of sales: 36
Median sales price: $1,262,500
Notable sale: a 2,628-square-foot 3-BR, 3-BA for $4,100,000
45 PROVINCE STREET, BOSTON, MA 02108
WHITTIER PLACE
34
$434,500
A 536-square-foot 1-BR, 1-BA for $360,000
6 WHITTIER PLACE, BOSTON, MA 02114
ONE CHARLES BOSTON
29
$1,345,000
A 761-square-foot 1-BR, 1-BA for $625,000
1 CHARLES STREET SOUTH, BOSTON, MA 02116
RESIDENCES AT RITZ-CARLTON
27
$747,000
A 2,667-square-foot 3-BR, 4.5-BA for $3,162,500.
1 AVERY STREET, BOSTON, MA 02111
W BOSTON
27
$1,730,000
A 427-square-foot studio for $530,000
110 STUART STREET, BOSTON, MA 02116
RESIDENCES AT THE INTERCONTINENTAL
23
$1,425,000
A 3,385-square-foot 3-BR, 4.5-BA for $3,223,000
500 ATLANTIC AVENUE, BOSTON, MA 02110
PORTER 156
22
$349,500
A 686-square-foot 1-BR, 1-BA for $300,000
156 PORTER STREET, BOSTON, MA 02128
HARBOR TOWERS
22
$737,750
A 1,223-square-foot 1-BR, 1-BA for $780,000
65 EAST INDIA ROW, BOSTON, MA 02110
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Condo Prices Shatter Record

 

Great post from Scott.

Mass condo prices shatter record

Posted by Scott Van Voorhis
Yes, condo prices are getting nutty again.

The median price of a condo in Massachusetts crossed the $300,000 threshold in January.

That’s the highest condo price ever for a January since The Warren Group, publisher of Banker & Tradesman, began tracking condo prices back in 1987.

It also represents a 24 percent increase from January 2013, when the median price for a condo in the Bay State was at a relatively more affordable $242,000.

By comparison, the median U.S. home price weighs in at $188,900. And that’s after a 10 percent increase in January.

Condo sales were also up by a pretty sizable 16 percent, with 1,144 units changing hands the first month of the year, The Warren Group reports.

What’s even more amazing, condo prices are not all that far behind single-family home prices in Massachusetts, with the median home price in January rising 16 percent, to $315,000.

Condos have long been a starter home alternative in pricey Greater Boston, but it’s not clear how much longer that’s going to last given current trends.

Certainly condo prices are out of sight now in Cambridge, Boston and the inner suburbs.

Of course, the price increases might be good news for sellers, but it’s hardly anything for buyers to cheer about. Even if you are trying to sell a house in order to move up into something grander, you are still going to be scrambling to keep up when prices are rising at double digits.

So what’s driving this price escalation? Some of it is due to pent-up demand, but low inventory – basically not enough listings for all the buyers out there – is the bigger problem right now.

The inventory of single-family homes dropped more than 20 percent in January compared to January 2013, the Massachusetts Association of Realtors reports this morning. (There were 15,246 listings this past January, compared to 19,142 the year before.)

Condo inventory was down even more, by 27 percent, to 4,232, MAR reports.

Anyway, it should be an interesting spring market. At a time when sales and prices in many other parts of the country are starting to moderate, the market in Massachusetts kicking into high gear.

 

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Condos Soar

691 Mass Ave, #208, asking $570K. 1B/1B, 909 sf

Its always interesting to hear mixed reactions to condos, as our “local” markets, downtown Boston and Provincetown are very condo centric. A good statewide perspective though.

Condos soar as home sales stumble

Posted by Scott Van Voorhis
Are buyers turning to condos as they find themselves on the losing end of soaring single-family home prices?

It happened during the bubble years and in previous booms as well. And it looks like it may be happening again given the latest Massachusetts sales stats out this morning

Bay State condo sales jumped more than 15 percent in December compared to the year before, even as home sales slid –  by just under a percent –  for the fewest sales since April,The Warren Group reports.

Yet even as home sales faltered, home prices rose yet again in December amid a dearth of listings for buyers to look at, with the median price hitting $320,000, a 6.3 percent jump over 2012 and an increase over this November as well, the Massachusetts Association of Realtors finds.

And despite the stagnant sales numbers, demand still appears to be relatively strong, with the drop in sales driven by the sparse choices in the market as much as anything else.

Even as home sales stagnated in December, average days on market dropped to 99 days, down from 130 in December 2012, according to MAR.

By contrast, condo prices look a little more reasonable, though that window appears to be closing as well.

The median condo price rose 8 percent in December, to more than $305,000, MAR reports. The median condo price for all of 2013 – $300,000 – was the highest since 2004.

While generally less expensive, condos have the perception as being a riskier bet than singe-family homes. There’s more price volatility with condos the poster child, at least in New England, of the devastating early-1990s real estate collapse.

Many of those who snapped up condos during the greed-is-good 80s were stuck with them for years, unable to sell, period, let alone settling for a loss.

Developers during those heady boom times got the very dangerous idea they could turn any old building anywhere into overpriced condos and stuff their pockets with easy profits.

Bad bets include the downtown Haverhill condo next to a car dealership that one of my former newspaper colleagues was stuck with from his bachelor days.

He wound up renting it after he got married and bought a house – he may very well still be sitting on it, though I suspect he finally found a way to unload during the bubble years, circa 2003-2006.

Ready to go condo? Homes too expensive for you now?

 

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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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As Prices Rise, Housing Bears See Red

Scott seems to know what real estate brokers feel like when we get push back for advocating around positive real estate news – and he makes some good points about the nature of our Boston Metro real estate market relative to the nation as a whole.

 As prices rise, housing bears see red

Posted by Scott Van Voorhis  Boston.com Boston Real Estate

Maybe reading comprehension just isn’t what it used to be.

Not sure what it is, but every time this blog delves into rising home prices, an increasingly problematic aspect of life in the Boston area, some of our more vocal housing bears on this blog automatically cry foul.

In fact, they see nothing less than a real estate industry conspiracy intent on revving up the housing market!

Not that home prices need any help right now, but the idea is pretty absurd.

A case in point is the reaction on the comment board of this blog to Thursday’s post, “Hot fall market shatters records – and raises concerns.”

Here’s my argument, I’ve made it for years now, and, frankly, I don’t think it’s all that hard to grasp.

Housing prices are on a relentless, decades-long upward march inside I-495, increasingly pricing out ever greater numbers of working and middle class families.

Yes, things cooled a bit during the real estate downturn and Great Recession, but the price declines locally weren’t anything like what they saw out in Las Vegas or in Miami.

Is that because we are just so incredibly precious and special here?

No, increasingly restrictive zoning practices and NIMBY mindsets have put the home builders in a straightjacket, making it all but impossible for developers to truly meet demand for new housing.

Hence anemic levels of building going back more than two decades now and increasingly scarce listings.

Couple that with a local economy that is good at spinning off high-paying jobs in biotech and high-tech, but not much else, and you have a mismatch between rising demand and severely constrained supply.

Does that mean home prices will just keep going up forever? Of course not.

But all real estate is local, with each market driven by its own, peculiar dynamics.

Frankly, I am more worried about the increasingly number of buyers priced out of this market than the idea that we will someday see some sort of Las Vegas-style price implosion.

In fact, a steep plunge in home prices actually would be a good thing here and might truly make housing more affordable here. But you actually have to have lots of new homes getting built for that to happen, as happened in Las Vegas, Phoenix and other Sunbelt markets where the housing crash hit the hardest.

A little overbuilding might do us a world of good here in Greater Boston, but given current trends and attitudes, that’s not going to happen anytime soon.

 

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Price Gain Strongest In 8 Years

NAR’s third quarter analysis.

Home prices post strongest annual gain in nearly 8 years

Pace of sales hits 5.36M a year during third quarter, best since 2007
Inman News

Inman News Staff Writer

Home prices in most metropolitan areas grew significantly in the third quarter, with the national median price rising at its fastest annual clip in nearly eight years, according to the National Association of Realtors (NAR).

During the same period, existing homes sold at the fastest annual rate recorded in more than six years, according to NAR’s latest quarterly report on metro area median prices and affordability.

Despite the robust price growth, NAR estimated that potential buyers still had adequate income in most areas to purchase a home in the third quarter. Nonetheless, market momentum is changing, according to Lawrence Yun, chief economist at NAR.

“Rising prices and higher interest rates have taken a bite out of housing affordability,” Yun said. “However, we have the ongoing situation of more buyers than sellers in the market, so lower sales will help to take the pressure off home price growth and allow them to rise slowly at a single-digit growth rate in 2014.”

The national median existing single-family home price increased by 12.5 percent year over year to $207,300 in the third quarter, the strongest year-over-year gain since the fourth quarter of 2005 when it shot up 13.6 percent, according to the trade group.

In the second quarter, the median price reportedly rose 12.2 percent year over year.

Meanwhile, NAR said existing-home sales jumped 5.9 percent to a seasonally adjusted annual rate of 5.36 million in the third quarter from 5.06 million in the second quarter.

On an annual basis, they reportedly increased 13 percent. The third-quarter pace of sales was the highest recorded since the first quarter of 2007, when it hit 5.66 million, NAR said.

The report’s findings also highlighted the market’s sharp inventory shortage.

At the rate of sales in the third quarter, the existing-home inventory of 2.21 million homes for sale would have cleared in just five months, down from 5.9 months in the third quarter of 2012.