Tag: Boston real estate sales

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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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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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Low Interest Rates – Forever?

Another good post by Scott.

Low interest rates today, tomorrow, forever?

Posted by Scott Van Voorhis  October 10, 2013 09:30 AM

Who knows where the economy will be by the time the Tea Party wrecking crew in Congress finally wears itself out.

But if there is any near certainty, it is the latest bout of uncertainty the nuttiness in Washington has injected into an already wobbly economy will keep interest rates at their historically low levels for some time to come.

Ben Bernanke and the Fed over the summer flirted with cutting back on its multitrillion-dollar home buyer subsidy program – known as quantitative easing – amid signs of a modest improvement in the economy.

But of course Big Ben beat a hasty retreat in September after the Fed’s well telegraphed intentions started to push up rates and spook the housing market.

Now with the threat of a slowdown or even a full blown Depression looming should Congress force the federal government to default on its debt payments, there’s zero chance the Fed will be backing off from its $85 billion a month mortgage bond buying program anytime soon.

President Obama’s choice of Janet Yellen to fill Big Ben’s shoes – she’s a strong supporter of the Fed’s cheap money policies – all but seals the deal, as economist Elliot Eisenberg notes in his daily “Laughs and Graphs” blog.

Here’s Elliot, the former chief prognosticator of the National Home Builders Association.

Given the government closure and resulting lack of economic data, the fact that Q3 GDP growth will be below 2% and that inflation remains very tame, virtually guarantees that tapering will not commence following the conclusion of the late October Fed interest rate setting meeting. Now with the formal nomination of Janet Yellen for the post of Chairman, I’m 100% sure tapering will not commence before January.

This is big news for home buyers – today’s low interest rates, hovering now at 4.25 percent for a 30 year mortgage, represent a massive government subsidy.
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At their current, rock bottom level, today’s interest rates shave as much as 30 percent off the average monthly mortgage payment, at least compared to what it would be under more historically normal rates of 7 or 8 percent.

It’s hardly all gravy. There is a strong argument to be made that home buyers still pay for it all by having to pay more of the same house – just look at what’s happening with home prices.

But frankly most home buyers, for good or ill, aren’t looking at it that way.

 

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Goode and Farmer Report – Boston October 2013

Most Boston neighborhoods are showing a very real trend as we look at third quarter sales. The sales increases we have seen quarter after quarter are moderating. Average sales prices continue their upward trend and average days on market are plummeting. In all Boston neighborhoods combined the average total days on market has decreased an average of 47% in 2013. The number of available condos for sale has decreased an average of 6% from this time last year. Inventory numbers are at a record low of 686 condos for sale in all Boston neighborhoods.

All Boston neighborhoods combined saw an 8% increase in the average sales price of condos to $592K from $544K last year. The total number of condos sold increased 6% to 3,599 units from 3,407 last year.

The Back Bay saw a 9% increase in average sales price to $1.215M but a 9% decrease in sales from 402 in 2012 to 365 this year. The inventory of available condos is equal to last year as 73 condos are available for sale.

The South End saw a 12% increase in the average sales price to $772K from $687K in 2012 and a 15% increase in the number of sales to 463 from 427. Inventory of condos for sale decreased 13% to 63 from 72 last year.

South Boston experienced a 10% increase in average sales price to $463K from $420K. Available condos for sale increased by 54% to 88, the largest and only increase in inventory in any Boston neighborhood. The number of sales increased 4% to a total of 489 from 471 last year.

The outlier neighborhood is Beacon Hill which saw a 21 % decrease in unit sales to 110 from 139 last year but did see a 12% increase in average sales price to $892K. Average days on market decreased 57% to a Boston low of 30 days! There are only 21 condos available for sale on The Hill.

The moderating number of sales as well as the crazy decrease in days on market…shows that inventory is of course the problem. While the market continues to show resilience, declining inventory levels are beginning to impact sales as is evidenced on Beacon Hill and Back Bay.

 

Boston Q3 chart

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

We will watch the fall market closely for the effect of declining inventory levels. The addition of many units for sale in South Boston is one positive sign, and we will see what develops going forward.

 

 

 

 

 

 

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Rock Bottom Rates Here To Stay

Good post by Scott below.

Up ahead: A frenzied fall for home buyers

Rock bottom interest rates are here to stay.

Posted by Scott Van Voorhis

 In case you missed it, good old Ben Bernanke just officially ditched any plans to scale back the the Fed’s multitrillion-dollar monetary manipulations that have kept interest rates at crazy lows.

The Fed chairman on Wednesday ended months of speculation that the central reserve bank is gearing up to scale back on its $40 billion a month purchase of mortgage-backed securities.

Concern that the Fed would start scaling back on this massive housing market stimulus, sparked earlier this year after some rather suggestive remarks by Bernanke, sent interest rates edging upwards, reaching into the mid 4s after having fallen to the low 3s.

That’s all history now, though. In fact, Bernanke doesn’t see any change in what is effectively the Fed’s home buyer subsidy program until 2016.

If you are out hunting for a house right now, you probably already know why this is big news, but I will spell it out anyway.

All those record low rates in the 3 percent range represent a massive government subsidy for home buyers, helping cut the cost of a monthly payment by as much as a third, at least compared to more traditional rates in the 7 and 8 percent range.

Yet there is a dark side to these crazy low interests – rising home prices.

By continuing to keep the pedal pressed to the metal, the Fed has effectively given a huge jolt of caffeine to a housing market that was already still fairly hot, if moderating a bit.

That means more bidding wars for scarce properties and another big boost for home prices.

As if Greater Boston needed that.

 

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Boston Inventory Levels

As an interested observer of the downtown Boston real estate market I am amazed at the contrast with our Cape market. The urgency and temperment of the Boston market is so different than ours as it is being driven so clearly by inventory levels.

Condo inventory is down in Boston (all neighborhoods combined) by 32% over last year at this time to 954 condos available for sale. Days on market are down 32% too to 69 days on market.

24 Worcester Sq #2, 2B/2B, 823 sf, $575K
24 Worcester Sq #2, 2B/2B, 823 sf, $575K

 

I remember the days of 300+ listings in the South End and Sundays where there were literally 250+ open houses…in the South End alone. Boy are those days over. There are currently 40 condo listings in the South End as of August 15. Sales remain strong and with the average days on market of 44 properties are going on the market and off the market very quickly.

 

 

 

 

492 Beacon St #T, 2B/2B, 1,353 sf, $899K
492 Beacon St #T, 2B/2B, 1,353 sf, $899K

 

 

In the Back Bay inventory is down 24% to 91 and days on market are down 43% to 75. There are 91 condos on the market down from 120 last year at this time. It’s interesting that  the market value of these fewer condos is $182M, greater than last years total valuation. Average asking prices are higher.

 

 

 

 

47 Mt Vernon St #47, 2B/3B, 2,350 sf, $1.299M
47 Mt Vernon St #47, 2B/3B, 2,350 sf, $1.299M

 

Beacon Hill numbers are astonishing. Inventory is down 29% to 25 condos available on The Hill. Interestingly average days on market are still 131 about the same as last year.

 

 

 

 

48 Monument Sq #B, 1B/1B, 511 sf, $419K
48 Monument Sq #B, 1B/1B, 511 sf, $419K

 

 

In Charlestown condo inventory for sale is down 50% from last year to 50 condos for sale. Average days on market are down 51% to 45.

 

 

 

 

Q2 sales numbers were down in most Boston neighborhoods…from -1% in South Boston to -39% on Beacon Hill. It will be interesting to see which neighborhoods have the most resilience when it comes to falling sales numbers when we get out first peak at third quarter reporting at the end of September.

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Boston Prices Soar

Interesting fact from Trulia that Scott reported on Boston.com

Boston proces soar while the suburbs lag.

Posted by Scott Van Voorhis, Boston.com

Home and condo prices in Greater Boston’s suburbs rose a solid 6.1 percent over the first five months of 2013 compared to the same period in 2012, real estate portal Trulia reports.

But Boston home and condo prices blew that number away, rising 10.1 percent during the same period.

While price increases in the cities are outpacing the suburbs around the country, Boston is in a league of its own, right along with New York, where prices are also on a tear.

“The difference makes it among the biggest gaps in the country,” Jed Kolko, Trulia’s chief economist, commented in an email.

Yet despite or maybe because of the rising city prices, the suburbs are seeing markedly faster population growth.

While urban areas saw their overall population rise by .36 percent, the suburbs grew much faster, by .56 percent, Trulia reports.

Leading the upward charge in prices are “high-rise neighborhoods,” as well as ethnically diverse neighborhood and zip codes with a significant percentage of same sex couples.

Needless to say, such diversity is for the most part the monopoly of urban areas right now – a pattern particularly evident in Greater Boston. Our suburbs, for the most part, are the opposite of diverse.

Neighborhoods where no particular ethnic or racial group makes up the majority saw prices rise 14.3 percent. And in neighborhoods where same-sex couples account for more than 1 percent, prices rose a staggering 16.5 percent.

It does make you wonder whether the cities and suburbs are getting ready to change places now, with rising urban prices pushing anyone who can’t afford elevated prices and rents into the suburbs.

 

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Boston Condo Prices At Record High

 

Jenifer’s article today in the Globe…WOW!

Luxury units help push Boston condo prices to record

Low inventory likely to remain a factor

By Jenifer B. McKim

|  GLOBE STAFF  JULY 23, 2013

Condominium prices in Boston’s downtown market jumped to a record high in the second quarter of the year, driven by strong demand, tight inventories, and a taste for luxury, according to data to be released Tuesday.

The median price for a condo in Boston’s central neighborhoods increased to $537,950 in the three-month period that ended in June, a 5.3 percent increase from same period a year ago, according to LINK, a Boston company that tracks condo sales in a 12-neighborhood area, including the Back Bay and Beacon Hill.

That beat the previous record of $537,000 during the first quarter of 2013, according to LINK, which has been tracking local condo data since 1993.

Strong sales of luxury condos, which include services like a valet and concierge, helped push the citywide median value — the midway point between the lowest and highest sale prices — to the record. The median price of a luxury condo jumped to $1.4 million from $1.24 million in the second quarter of 2012, a more than 13 percent increase.

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Sales of luxury condos increased by 2.4 percent between April and June, according to LINK.

“We are zooming right ahead,’’ said John Ranco, a senior sales associate with Hammond Residential Real Estate LLC in the South End. Ranco said buyers “are out there in force. It is just the matter of finding the right property.”

That hasn’t been easy for many house hunters. As in the broader Massachusetts real estate market, listings have shrunk as more buyers come into the market, according to LINK, which tracks condos in the Back Bay, Beacon Hill, Charlestown, the Fenway, the Leather District, Midtown, the North End, the Seaport, South Boston, the South End, the Waterfront, and the West End.

Inventory for condos in these neighborhoods dropped in June to 328 units from 531 a year ago, a 38.2 percent drop.

The shortage of properties on the market contributed to the slight decline in overall condo sales, which fell 1.2 percent from the second quarter of 2012, according to LINK.

Kevin Ahearn, president of the Boston-based residential brokerage firm, Otis & Ahearn Inc., said he expects tight inventory will keep pushing prices in the city’s downtown market for years. There are very few new listings, he said.

“We are seeing the front end of a very big move up in pricing,” he said.

Home values throughout the Boston area are on the rise. Median sales prices for condos in Greater Boston — considered roughly the region within the Interstate 495 loop — rose to a record $422,000 in June, a 5.5 percent increase from the $400,000 value during the same month last year, according to the Greater Boston Association of Realtors, which released data Monday.

Single-family homes also rose to a record $541,500 in June, a 7.8 percent increase from the same time last year, the association said.

Within the city of Boston, areas like South Boston and Charlestown — neighborhoods with relatively lower costs — have experienced some of the biggest jumps in condo values over the last several months as buyers are unable to find or afford properties in other downtown neighborhoods, said Debra Blair, president of LINK.

“It will be another three to five years before we have inventory,’’ she said. “That will keep pressure on prices going up.”

Jenifer B. McKim can be reached at [email protected]. Follow her on Twitter@jbmckim.

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Goode and Farmer Report – Boston July 2013

 Condos are selling 46% faster than last year and there are 38% less available for sale.

Jon photo 2There are two big numbers that stand out when looking at Boston condo sales through the 2nd quarter. In all Boston neighborhoods combined, days on market have decreased an average 46% in 2013. The number of available condos for sale has decreased 38% to 693 properties for sale from 1,123 at this time last year…and these figures are down from very low 2012 numbers! Condos are selling 46% faster than last year and there are 38% less available for sale.  How’s that for a volatile dynamic.

 

All Boston neighborhoods combined saw a 9% increase in the average sales price of condos to $605K from $553K last year. The total number of condos sold was flat at 2,007 units vs. 2,034 units. This real estate market remains relatively healthy but the continuing decrease in inventory levels is beginning to affect the number of sales.

The Back Bay, saw a 13% increase in average sales price to $1.309M but a 19% decrease in sales from 248 in 2012 to 202 this year. The inventory of available condos for sale dropped 36% to 101 units.

The South End saw a 15% increase in the average sales price to $791K from $691K in 2012, but a 4% decrease in the number of sales to 268.  Inventory of condos for sale decreased a whopping 47% to 57 from 107 last year. This will continue to be a factor in market performance going forward.

South Boston saw the largest decrease in inventory in downtown Boston. Available condos for sale dropped 53% to 46 from 98 available for sale last year. The average sales price of a condo increased by 10% to $452K from $410K last year. The number of sales dropped 1% to 245 vs 249.

Inventory remains the problem, but this market is so resilient and so desirable that declining inventory levels are just now beginning to impact sales. We will keep an eye on the very important fall market to see where this trend takes us.

 

Boston Q2 2013