Tag: Boston real estate

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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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Tiny Home – What A Surprise.

Very cool! we could use a gazillion of these in Provincetown and on the Cape.

Tiny Home Assembled In Just One Day Has A Big Surprise Inside

The Huffington Post  |  By Posted: 09/17/2013

Sometimes a home’s exterior can be, well, misleading. And usually that’s a bad thing, but sometimes there is an exception. That’s the case with the portable home ÁPH80 designed by Spanish architecture firm Ábaton. From the back, the simple construction of a grey cement board gives it the appearance of a garden shed, but step around to the front and you’ll see this jewel box of a tiny home in full glory.

 

tiny home 2

tiny home 3

 

 

 

 

 

 

 

According to Ábaton, the house was designed with three things in mind — wellbeing for its inhabitants, environmental balance and simplicity — and we think they’ve hit the nail on the head. Inside the 290-square-foot space which is perfectly comfortable for two, you’ll find a living-room/kitchen, a full bathroom and double bedroom. The large expanse of floor-to-ceiling windows and the gabled ceiling, which is eleven feet at its highest, make the small space feel open and airy. The interior walls were left white as a clean and simple backdrop to the most beautifully curated earthy furnishings by Batavia. And most of the materials used for the home can be recycled.

 

tiny home 4

s-TINY-HOME-1

 

 

 

 

 

 

 

 

But the coolest part is that after it’s been manufactured, this little dwelling can be assembled in just one day and it can be transported almost anywhere.

Where can we sign up for one?

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More Sticker Shock In Boston

 

A recent post by Scott regarding prices and inventory levels in Boston and suburbs.

Coming this fall: More sticker shock

Posted by Scott Van Voorhis  September 9, 2013 08:34 AM

Welcome to fall, traditionally the hottest time for home sales, barring spring.

And brace yourself. After a small breather in August as the market slowed down a bit during vacation time, the fall is likely to bring another round of crazy price increases and bidding wars for scarce homes.

Here’s a Globe piece from an old friend of mine, Jay Fitzgerald, which offers a preview of the fall market.

More than 60 towns and urban neighborhoods have already blown past previous price peaks set in 2005 at the height of the housing bubble, the story notes, citing stats from The Warren Group.

And who’s leading the price charge? Well, if you haven’t already guessed it, it is the usual suspects, “desirable Boston neighborhoods and close-in cities and towns such as Arlington, Brookline, Cambridge, and Newton,” Fitzgerald writes.

Here’s a quote from a frustrated buyer interviewed in the piece.

“I always expected high prices,” said Rich Garfield, 31, a software engineer now renting in Somerville’s Davis Square, “but our agent told us right off the bat that everything we looked at would go higher than the asking price, and that’s exactly what has happened.”

If you have lived in Greater Boston for a decade or two, you might be wondering whether the crazy cycle of skyrocketing home prices is starting all over again.

If so, your right, and here’s why.

Here’s Fitzgerald’s piece again:

Mark Zandi, chief economist at Moody’s Analytics, a forecasting firm, said longer-term factors are also at work. Massachusetts has a decades-old history of dramatic run-ups in housing prices precisely because not enough new housing is built to meet demand, said Zandi, who has closely followed the New England economy.

A combination of scarce land and sometimes contentious permitting at local levels has inhibited home building in the state, he said. “It’s ultimately a supply problem.”

 

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July Was Best Month For Home Sales Since 2006

Great July market review from The Globe’s Chris Reidy below…

By Chris Reidy

|  GLOBE STAFF  AUGUST 29, 2013

The number of Massachusetts single-family homes sold in July was up more than 18 percent on a year-to-year comparison basis as the Bay State had its best month for sales volume since June 2006, the Warren Group said Thursday.

Condominium sales in the state were also up sharply. Meanwhile, the median price of a single-family home rose 10 percent in July, increasing to $349,000, said the Warren Group, a Boston company that tracks local real estate activity.

“Many recent real estate reports have signaled a strong real estate recovery, and our numbers speak to that rebound,” David Harris, editorial director of the Warren Group, said in a statement. “While consumer confidence and strong employment numbers continue to bolster the market, there’s concern that higher mortgage rates and increasing home prices could dampen the revitalized market.”

Last month, 5,941 single-family homes were sold statewide sold, up from 5,014 sold during July 2012, the Warren Group said.

As for condos, 2,336 were sold in the state during July, up nearly 17 percent from the same month a year ago.

July’s median selling price for a Massachusetts condo was $310,000, up 5.5 percent from July 2012.

The Massachusetts Association of Realtors also issued its monthly report on the local housing market Thursday. The association uses a different method than the Warren Group does to calculate sales activity.

According to the association, there were 5,750 detached single-family homes sold this July, a 20.3 percent increase from a year ago. The July 2013 total was the most homes sold in one month since July 2004.

In a statement, association president Kimberly Allard-Moccia said: “The combination of buyers wanting to close and move in before the start of the school year and their concern over increasing interest rates resulted in another positive month in July. Hopefully the activity of the past few months will encourage homeowners who are thinking about selling to put their homes on the market. Buyer demand is there, but the shortage of inventory often prices buyers out of the market.”

Chris Reidy can be reached at [email protected].

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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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Where Condos Are Going Over Asking Most

Below is an interesting post from David Bates at CurbedBoston. With all the “over asking” activity it’s a fascinating analysis.

Where and Why Hub Condos Go for Over or Under Asking

5%25%2B%20Neogtiating%20Room.jpg

Another month of Boston condominium closings and another couple of hundred above-ask offers accepted.

In nine key condo markets in July, 55.9 percent of sales prices were greater than list prices, which narrowly improves on June’s wicked impressive 55.4 percent share of over-ask offers.

As far as individual condos that sold for the most over-ask, 71-73 Stearns Road, #2, in Brookline sold for $121,00 over-ask; 85 Fayerweather Street in Cambridge sold for $131,000 over-ask; and 79 Chandler Street, #2, in the South End went for $226,000 over-ask.

As well, out of about 1,100 total closings in June and July in these nine key markets, about 90 offers went at least 10 percent over-ask, a segment I think of as “extreme over-asks.” On the other side of the real estate coin, only 62 June/July sales had even 5 percent negotiating room. Those sales with at least 5 percent negotiating room are a segment I think of as “under-asks.”

As I looked at the details of the extreme over-asks and under-asks, I wondered what separated them? Was there any characteristic that could determine whether an on-market condo would attract extreme or negotiated offers? I decided to look into it.

My first thought was to compare location, location, location. What I found out was that extreme over-asks were most prolific in Somerville, where almost one out of every five sales was extreme, and Cambridge, where nearly one out of every seven closings was extreme. In fact, I saw that just four markets (Cambridge, Somerville, Brookline and JP) made up more than 80 percent of all the extreme sales that had occurred in these two months.

Did that mean that under-ask offers permeated in the markets that weren’t dominated by extremes? In one case, this was very true. The No. 1 location for under-asks was Back Bay, a market that not only accounted for more than one-third of all under-asks, but also a market where extreme over-asks were rare.

In other neighborhoods, location didn’t seem to be much of an indicator of whether a condo was going to attract extreme or negotiated offers. For example, Brookline was among the most prolific for extreme over-asks (16), while at the same time it had the second most under-ask offers (10).

If it wasn’t location, then what was the best indicator of whether a condo was most likely to garner under-ask or extreme over-ask offers? The best indicator I found was market time. The shorter the time a condominium was on market, the more likely it was going to get extreme over-ask offers; and the longer the time was on market, the more likely that it was going to receive a negotiated offer.

While the vast majority of extremes sold in seven days or less (63 percent), nearly seven out of every eight (87 percent) under-asks were on market for at least 12 days. And, while only 5 percent of the extremes made it 30 days on market, 50 percent of the under-asks lasted at least 36 days on the market.

So, if negotiating room is the most important room in your condo purchase, don’t look at the neighborhood, look at days on market.

 

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Condo Prices Increasing Faster Than Single-Family Homes

The post below is from  Dan Stone and his blog The Mortgage Report Daily. He is based in Madison Wisconsin. It also provides a good top level review of mortgages for condos. In our local markets its all about condos so it is interesting to see his mid western viewpoint..i.e. “Getting a mortgage for a condo can sometimes be a challenge”. Regardless it is a good and informative post. Sometimes we need to see what the middle of the country is thinking and doing.

 Case-Shiller Index : U.S. Condos Increasing In Value Faster Than Comparable Single-Family Homes

August 9,  2013.

Case-Shiller Index shows home prices in U.S. condominiums and co-ops outpacing single-family residences

As the U.S. housing market gains, it’s taking the condominium market with it.

Home price growth in condos and co-ops is outpacing growth in single-family residences. This is a major shift for the housing market — condos were among the most distressed sectors of last decade’s housing market downturn.

Home sellers are getting higher prices for their condos.

Los Angeles Condos Jump 23%; Chicago Rises 12%

According to the most recent Case-Shiller Index, home values climbed 12.2 percent nationwide for the 12 months ending May 2013. This jump marks the biggest one-year increase in home valuation since the Case-Shiller Index launched 26 years ago.

Each of the Case-Shiller Index’s 20 tracked cities posted annual gains, led by the San Francisco Bay Area; Las Vegas, Nevada; and Phoenix, Arizona. Home valuations in the Las Vegas are up 23% since from 12 months ago, which claws back against the heavy losses sustained last decade.

The “last place” finisher in the May 2013 Case-Shiller Index? New York City.

As compared to one year ago, home values in the city’s five boroughs — Manhattan, Brooklyn, Queens, the Bronx, and Staten Island — rose just 3.3 percent, which is well below the U.S. national average.

However, the Case-Shiller headline figure tells just part of the story.

In New York City, the market is thick with condominiums and co-ops and it just so happens that the Case-Shiller Index ignores homes of these types. If we were to add back condos and co-ops to the Case-Shiller Index data, we’d actually see that New York City is performing quite well.

In New York, condo values are up nearly 10% since last year — well above the broader index’s reading of 3.3 percent.

The same is true in other Case-Shiller Index markets, too. Condos in the 4 other cities tracked by the Case-Shiller Condominium Index showed strong annual gains, and each outpaced its home city.

  • Los Angeles, California : Condos +23.1% annually (versus +19.2% for single-family homes)
  • San Francisco, California : Condos + 27.6% annually (versus +24.5% for single-family homes)
  • Chicago, Illinois : Condos + 11.9% annually (versus +8.5% for single-family homes)
  • Boston, Massachusetts : Condos +8.7% annually (versus +7.5% for single-family homes)
  • New York City, New York : Condos + 9.8% annually (versus +3.3% for single-family homes)

With tight supply and limited construction, buyers of condos and co-ops should expect higher home prices through the end of 2013 and into early-2014, at least.

Mortgages For Condominiums

Getting a mortgage for a condo can sometimes be a challenge. Last decade, lenders were burned on condos for a variety of reasons and so they’ve bounced back on condo loans a bit more cautious and a bit more wise.

Today’s buyers of condos have fewer financing choices as compared to buyers of single-family detached homes.

As one example, buyers using conventional mortgage financing via Fannie Mae or Freddie Mac pay a premium for all loans with less than 25% equity. For this reason, buyers of condos and co-ops are encouraged to cap loans at 75% loan-to-value (LTV).

Condo loans above 75% LTV remain acceptable and approvable, however, the accompanying mortgage rate and/or closing costs will likely be higher.

VA loans for condos are available, too. VA loans allow 100% financing with no mortgage insurance required. Mortgage rates tend to be relatively low with a VA loan because all VA loans are guaranteed by the government.

In nearly all cases, though, buyers of condominiums will want to verify a building’s warrantability.

“Warrantability” is a mortgage term whether mortgages in a given condo building are eligible for purchase by Fannie Mae or Freddie Mac. Non-warrantable condos are sometimes denied for funding, but not always.

A building’s warrantability is based on a host of traits, some of which include :

  1. No person owns more than 10% of the building units
  2. No more than 50% of the building’s units are active rental units
  3. No more than 20% of the building is dedicated to commercial/retail space

To determine whether a building is warrantable or non-warrantable, mortgage lenders will often use a “condominium questionnaire”, which addresses the lendability of a building.

Non-warrantable condos can still be financed, it should be mentioned. Product availability, however, is limited and mortgage rates are sometimes higher.

The Case-Shiller Index reports rising values for today’s condos and co-ops. In many cases, condo prices have climbed more than for comparable single-family residences. Buyers of condos should expect rising prices.

About the Author

Dan Green (NMLS #227607) is an active loan officer with Waterstone Mortgage. You can also connect with Dan on Twitter and on Google+.

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5 Reasons To Sell Now

I couldn’t have said it better, and I reiterate that I rarely post “Buy Now”, “Sell Now” articles, but this succinctly outlines the reasons why…and with a national perspective.

Selling a House? 5 Reasons You Should Do It Now

by THE KCM CREW

five fingersMany are talking about why now is a great time to buy a home. Today, we want to look at why it might also be an opportune time to sell your house. Here are the Top 5 Reasons we believe now may be a perfect time to put your house on the market.

1.) Demand Is High

Homes are selling at the fastest pace since November 2009 when the market spiked in response to the home buyer tax credit. The most recent Existing Home Sales Report by the National Association of Realtors (NAR) showed that monthly sales increased over the same month last year. Total sales have been above year-ago levels for 22 consecutive months. There are buyers out there right now (buyer traffic is 31 percent stronger than a year ago) and they are serious about purchasing.

2.) Supply Is Beginning to Increase

Total housing inventory is rising. Many expect inventory to continue to rise as more sellers escape the shackles of negative equity. Selling now while demand is high and before supply increases may garner you your best price.

3.) New Construction Is Coming Back

Over the last several years, most homeowners selling their home did not have to compete with a new construction project around the block. As the market is recovering, more and more builders are jumping back in. These ‘shiny’ new homes will again become competition as they are an attractive alternative for many purchasers.

4.) Interest Rates Are Rising

According to Freddie Mac’s Primary Mortgage Market Survey, interest rates for a 30-year mortgage have shot up to 3.98% which represents a jump of more than ½ point since the beginning of the year. Even those trying to be the voice of reason on this issue are projecting higher rates. For example, Polyana da Costa, senior mortgage analyst atBankrate.com said:

“Rates are unlikely to keep going up so quickly and should remain below 5%.”

Whether you are moving up or moving down, your housing expense will be more a year from now if a mortgage is necessary to purchase your next home.

5.) It’s Time to Move On with Your Life

Look at the reason you are thinking about selling and decide whether it is worth waiting. Is the possibility of a few extra dollars more important than being with family; more important than your health; more important than having the freedom to go on with your life the way you think you should?

You already know the answers to the questions we just asked. You have the power to take back control of your situation by putting the house on the market today. The time may have come for you and your family to move on and start living the life you desire. That is what is truly important.

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Mortgage Rates Ease

 

Mortgage Rates Ease for Second Straight Week

  Jul 25, 2013
  By: , Realtor.com
Average rates on fixed mortgages trended downward for the second consecutive week.

The decline comes after rates spiked dramatically over the past month over worries the Federal Reserve would curb its bond-purchase program – giant stimulus policies involving $85 million worth of Treasury notes and mortgage-backed securities that have helped spur growth in a recovering housing market.

Three weeks removed from hitting a two-year high, the average rate on a 30-year fixed eased to 4.31 percent, down 0.08 percentage point from 4.37 a week ago, according to the latest survey by mortgage lender Freddie Mac. The 30-year fixed loan neared a historic low as recently as early May before spiking to 4.46 percent in the last week of June. It was at 3.49 percent at this time one year ago.

The average rate on a 15-year fixed mortgage saw its own decline, albeit a slight one. Previously trending at 3.41 percent, the average on a 15-year fixed loan fell by 0.02 percentage point to 3.39 percent this week. It previously achieved a historic low in early May, when it fell to 2.56 percent. A year ago, the average rate on a 15-year fixed was 2.8 percent.

In a statement, Freddie Mac chief economist Frank Nothaft said the relief “should help to alleviate market concerns of a slowdown in the housing market.”

“Thus far, existing home sales for June were the second highest since November 2009 and new home sales were the strongest since May 2008,” Nothaft continued. “In addition, the low inventories of homes for purchase are putting upward pressure on house prices.”

The positive signs from June sales bode well for the housing market moving forward, especially after it weathered its first significant spike in key mortgage rates.

The average rate on a 5-year hybrid adjustable loan fell slightly from 3.17 percent a week ago to 3.16 percent. After holding firm at 2.66 percent for four consecutive weeks, the average on a 1-year hybrid adjustable loan dropped by 0.01 percentage point this week to 2.56 percent.

Although mortgage loans remain historically low, home buyers and home owners looking to refinance may want to act quickly to lock in affordable rates. In the latest Mortgage Rate Trend Index by Bankrate.com, 91 percent of the mortgage analysts and experts polled believe average loans will trend upward or remain unchanged over the next week.

“Rates have moved significantly higher in the last five weeks,” says Academy Mortgage branch manager Derek Egeberg. “There is greater risk of continued moves higher than potential of a market move lower. Advice is to lock if you are a buyer with a property under contract.”

 

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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.