What $560,000 buys you in Boston’s Back Bay, the South End and in Provincetown.
298 Commonwealth Ave, Tandem pkg space, sold $560K
$560,000 buys you a tandem parking space in Boston’s Back Bay. This was all the news this past week. You can just imagine what people in the Midwest, or really anywhere else thought when they saw this story. That Bostonians are Bonkers? Well…everything is relative. Someone wanted these tandem spots pretty badly, and they could afford $560,000 to buy them
54 W Vine St #A, asking $569K, 2B/3B, 1,248 sf
54 W Vine Street #A in Provincetown’s West End is a wonderful 2 bedroom, 3 bathroom condo with parking. It just went under contract with an asking price of $569K. This is the 3rd condo that has sold in the last 18 months in this very well run and attractive complex. This condo represents the best of the mid-market in town.
691 Mass Ave, #208, asking $570K. 1B/1B, 909 sf
691 Massachusetts Ave is a one bedroom, one bath condo with an asking price of $570K. 691 Massachusetts Avenue is a newer condo building in Boston’s South End.
We all know that $560K for a parking space in the Back Bay is news. Parking is a rare commodity in the Back Bay and it certainly creates a new ceiling for parking space prices in Back Bay but doesn’t mean much for the market in general…other than adding a bit more confidence to the already very hot market.
Posted by Scott Van Voorhis June 12, 2013 08:22 AM
OK, when Realtors start talking about the market reaching a “tipping point,” it can only be bad news for buyers worried about soaring prices.
It means things are starting to get a little crazy.
As we head into summer, sales activity is soaring, with buyers spooked by rising rates and the prospect of more price hikes ahead.
More than 9,000 homes across Massachusetts were put under agreement this May, an 83 percent jump from May 2012, the Massachusetts Association of Realtors reports.
Pending sales of condos rose more than 63 percent in May, to 3,469.
Both increases where the highest recorded since MAR began tracking pending sales in 2004.
Here’s what President Kimberly Allard-Moccia, president of the local Realtors group, had to say.
“May was a tipping point as increasing prices and interest rates pushed qualified buyers to make offers that sellers accepted in great numbers,’ said Allard-Moccia, broker-owner of Century 21 Professionals in Braintree, in a press statement.
“However, we still need more homes on the market and hopefully this activity will spark potential sellers to list their homes to help meet the demand,” she added.
Although pending home sales improved only 0.3 percent in April, according to the National Association of Realtors, contract signings actually rose 10.3 percent compared to April 2012. Pending sales have now been above year-ago levels for the past 24 months, marking a very slow but somewhat sure recovery for housing.
Regional pending home sales varied, as the Northeast and Midwest saw improvement, while the South and West both dropped. NAR reports that home contract activity is at the highest level since April 2010, immediately before the deadline for the home buyer tax credit which spurred a metaphorical gold rush on homes.
Existing home sales expected to rise to 5M
Dr. Lawrence Yun, NAR’s chief economist said, “The housing market continues to squeak out gains from already very positive conditions. Pending contracts so far this year easily correspond to higher closed home sales in 2013. Total existing-home sales are expected to rise just over 7 percent to about 5 million this year.”
“Because of inventory shortages, higher home sales will push up home values to the highest level in five years,” Dr. Yun added. NAR says the national median existing-home price should increase close to 8.0 percent and exceed $190,000 in 2013.
Sales varied according to region
Home contract activity rose 11.5 percent in the Northeast, marking a 17.7 percent increase from April 2012 and jumped 3.2 percent for the month in the Midwest, and a whopping 15.1 percent for the year.
Meanwhile, pending home sales slid 1.1 percent in the South, but rose 12.3 percent compared to April 2012. The tough spot is currently the West region which saw a 7.6 percent dip in signed contracts, pulling the region down 2.6 percent for the year.
The mid-market in Provincetown is the $400K to $800K price range. This segment represented 45% of total sales in 2012…46% of condo sales of 166 and 39% of single family sales of 52…in other words it is where the action is. Below are 3 condos and 3 single family properties that sold in 2012. 40 Pleasant is a beautifully renovated 2 bedroom condo in a 3 unit complex with wonderful outside space. 389 Commercial is a very special 1,384 square foot waterfront condo with vaulted ceilings and a huge deck. 14 Meadow is a free standing condo that lives like a single family home. 3 distinctly different properties in the mid priced segment.
40 Pleasant St. 2/1, $500K389 Commercial St.#6, 2/1, $575K14 Meadow Rd. #16, $695K
9 Center St. SF, 3/2, $650K290 Bradford St. SF 2/1, $490K8 Priscilla Alden SF 2/2, $800K
Currently there are 56 properties on the market priced between $400K and $800K representing 33% of the total condo and single family properties available of 155.
10 Washington St is a 3 bed 4 bath condo with 1,175 square feet. 145 Commercial St is in a beachfront complex in the West End. My favorite on market condo is 15 Cottage St. #9 on the pool at the Kensington Gardens complex. 1,710 sf, 3 bedrooms, separate dining room, chefs kitchen and 3 bedrooms for $594K.
The 3 single family’s shown represent some great values. 70 Race Point Rd is a 4 bedroom, 4 bath house with 2,736 square feet. 11 Willow Drive is s brand new 3 bedroom 3 bath house with 2,234 square feet . 1 Railroad Ave is a Provincetown gem and a value at $469K.
condos:
10 Washington St. 3/4, $709K15 Cottage St #9, $594K145 Commercial St #M3, $439K
Some single family properties;
70 Race Point Rd. SF, 4/4, $668k11 Willow Dr. SF, 3/3, $769K1 Railroad Ave. SF, 2/3, $469K
Year to date 20 properties have sold between $400K and $800K, 11 condos and 9 single families. This represents 33% of the total sold of 60. As you can see a perfectly symmetrical market dynamic. 33% of inventory and 33% of sales.
Below are a few of these sold properties. 50 Harry Kemp Way is a spacious townhouse style 2 bedroom condo in an well established condo complex. 381 Commercial is a beachfront condo in the East End and 61 Harry Kemp Way is a magnificent new construction single family home finished with the highest quality finishes.
50 Harry Kemp Way #3, 2/2, $500K381 Commercial St. #9, 2/2, $485K21 Court St #4, 1/1, $435K
262 Bradford St. SF, 3/2, $467K8 Thistlemore Way, SF, 3/3, $600K61 Harry Kemp Way, 2/3, $781K
What do these facts and figures tell you about the mid-market here in Provincetown? That it is the most active important segment in the market. That in 2012 it was almost half of all sales in the market with the average condo in this segment selling for $539K, with 2 bedrooms, and 2 baths and 1,122 square feet. The average single family home sold for $621K, had 3 bedrooms and 2 baths and was 1,705 square feet. As you can see from the assortment of properties shown above, the diversity of style, type, location and price in this segment is surprisingly diverse. I’ll keep reporting on interesting developments in the mid market and let you know my favorites as new properties come available.
If you doubt the power of the herd mentality to drive sales and prices in the real estate market, just recall what happened back during the nutty spring of 2010 as the expiration of the home buyer tax credit loomed.
Buyers bid up prices on homes in a scramble to grab the seemingly free government money before the offer expired, often negating the value of the $8,000 credit.
Could we see some panic buying over the summer if rates keep pushing up?
Don’t bet against it.
That said, in the longer term, higher rates could put a chill on sales, especially in high-priced markets like Greater Boston, or so says Lawrence Yun, chief economist for the National Association of Realtors.
“In Middle America I don’t see much impact since homes are so affordable,” explains Yun. “The more expensive coastal regions is where one will begin to feel the first decline or impact.” He suspects that California metro areas and east coast hubs like Boston, New York, and Washington D.C. could begin to experience slackening sales because low-interest monthly mortgage payments in these relatively pricier places have helped make homes seem more affordable to more buyers despite the fact that relative to income, principal amounts are still expensive.
Are you ready to hit the panic button? Ready to buy now and ask questions later before rates go higher?
Ever wonder where your neighbors are headed on vacation? If you live in Greater Boston, it’s a good bet they aren’t headed very far.
Trulia today is releasing its list of the top vacation home destinations for each major metro market, as well as nationally, based on a tally of searches on the real estate portal.
Of the top ten most popular vacation home destinations for buyers from Greater Boston, nine are on Cape Cod.
In fact, the only break from the pattern is Wells, Maine. Sorry New Hampshire, Vermont and Rhode Island, you are out of luck.
Let’s not get big heads here, though. Sure, we love the Cape, though I’d argue traffic and overdevelopment is close to wrecking the place. Just get off Route 6 in Hyannis and take a scenic drive down Route 28.
But the rest of America is not so enamored with our favorite vacation playground.
Only one Massachusetts zip code managed to make it onto Trulia’s list of the top 20 vacation home destinations across the country.
And that happens to be Nantucket, which ranks at a distant No. 20 in popularity.
The most popular vacation home destination in America, at least according to Trulia, is not Chatham or Provincetown, but rather Cape May in New Jersey, and specifically, Oceanwood, where the median price is $525,000.
Here’s Trulia list:
Where Bostonians Search for Vacation Homes
# ZIP Code Town State Median Asking Price
1 02649 Mashpee MA $419,900
2 02639 Dennisport MA $224,900
3 02540 Falmouth MA $549,950
4 02554 Nantucket MA $1,799,999
5 02536 Teaticket MA $379,000
6 02633 South Chatham MA $815,000
7 02657 Provincetown MA $596,500
8 02631 Brewster MA $439,000
9 02642 Eastham MA $445,750
10 04090 Wells ME $256,670
Home values in the Boston area increased by 6.7 percent in March compared with the same time last year, according to data released Tuesday by the S&P/Case-Shiller Home Price Indices, another indicator of a rejuvenated housing market.
Nationwide, home prices increased 10.9 percent compared with March 2012, according to Case-Shiller, and values increased in all 20 metro areas measured by the firm. Because Case-Shiller measures repeat homes sales, it is considered one of the best markers of the nation’s housing health.
“Other housing market data reported in recent weeks confirm these strong trends: Housing starts and permits, sales of new homes and existing homes continue to trend higher,” said David M. Blitzer, chairman of the index committee at S&P Dow Jones Indices.
The increase in the Boston area was less dramatic than in other regions that were harder hit by the housing downfall. Between 2005 and 2009, home prices in the Boston region dropped about 20 percent, but the market has generally been more stable than the nation as a whole. Since 2009, area home values have fluctuated and now are less than 15 percent below their September 2005 peak.
Barry Bluestone, director of the Kitty and Michael Dukakis Center for Urban and Regional Policy at Northeastern University, expects steady but moderate price increases for single-family homes in the Boston area over the next few years, as more people put their homes on the market. Bluestone said he expects prices for multifamily homes and condominiums to rise even faster. “Older baby boomers are going to look to downsize and younger professionals will be less interested in moving into the suburbs and having to put up with long, tedious commutes,” he said.
The $1,000,000 market in Provincetown is solid and active. In 2012 16 properties sold above $1M, 15 single family homes and 1 condo. These represent 7% of the total 218 condos and single family homes sold in 2012. As you can see below, these range in style, size and of course location. The average sales price was $1.575M, had 4 bedrooms and 3.25 baths with 2,250 square feet of living space. (6 of these properties are shown below.)
5 Telegraph Hill $2.15M781 Commercial St $2.275M6 Winston Ave $1.8M
3 Atlantic Ave $1.065M29 Commercial St $2.925M79 Commercial St $1.55M
There are currently 157 condos and single family homes on the market, 31 of which are priced at $1M +, representing 23% of the available inventory.The average property above $1M is asking $1.869M, has 4 bedrooms and 4.5 baths, with 2,763 square feet of living space. Of these available properties 32 are single family homes and 4 are condos. (6 of those properties are shown below)
58 Franklin St $1.059M29 Tremont St $1.195M8 Telegraph HIll $3.195M
10 R Commercial St 1.995M21 Bradford St Ext #16 $1.249M75 Franklin St $1.349M
2013 looks to be as strong or stronger. So far 7 properties have sold, 6 single family homes and 1 condo, and 4 properties are currently under contract. Considering the strong summer fall selling season is still to come this is good news for the $1M + market. (6 of the 7 properties that have sold so far this year are shown below)
7 Miller Hill $1.2M13 Pilgrim Hts Rd $1.235M7 Pleasant St $1.045M
53 Harry Kemp Way $1.075M9 Creek Rnd Hill $1.6M572 Commercial St $2.265M
In many markets the “high-end” or above $1M market is the most visible market. The same is true here in Provincetown. The trophy homes, the big waterfront properties, the East End and West End compounds all draw interest and gossip. But interestingly enough many of these homes are wonderful family and year round properties, very accessible and in fact well priced for the amount of house you get.
The interesting numbers are 7% and 23%. While available properties for sale above $1M represent 23% of the total, only 7% of the properties sold in 2012 were sold above $1M. what does this mean? That while the $1M + market is viable and strong, lots of properties do take a while to sell. We need to remember that the second home market in whatever price point we are talking about is not as fast paced and dramatic as the primary home market. For many this means a more relaxed buying and selling process for others it is frustrating. Where do you fit?
Very interesting post from Mike Simonsen at Altos Research. In essence he is saying that buyers who held back buying in a sluggish economy are now entering the market in a time of low inventory, creating additional demand, which becomes hard to satisfy.
Quit your yapping about how strong the real estate market is, Simonsen. It’s a fake rally. There is no actual demand.
That’s the bearish argument I’ve been hearing lately. I’m not buying it.
For years we’ve been watching the phenomenon of “Shadow Inventory” of potential homes that need to be sold, and looking for impact on the market. This set of underwater or distressed properties is now shrinking rapidly. The number of homes with underwater mortgages fell by nearly two million last year. According to the Fed, home price gains of 10% will be enough to move 40% of underwater borrowers back above water. These home sellers are highly likely to buy another home in the same or comparable market, off setting new supply with new demand.
Meanwhile another phenomenon that emerged from the bubble burst has been developing, and it’s hit the market with full force. Shadow Demand. Demand for homes that went unsatisfied, primarily due to financial and economic uncertainty, that can now emerge as jobs recover and mortgages remain cheap.
Housing’s Shadow Demand
Let’s look at the source of new demand. Increased demand for housing comes from new “households.”
Cumulative Household formation surpluss/defecit relative to 5 year average (millions). Source: Federal Reserve Bank, Altos ResearchFrom 1997 through 2007, each year an average of 1.3 million new households were formed per year. Our population grows via immigration and kids maturing. These people need to rent or buy homes, or they double up with friends and family. During the Great Recession, household formation was closer to 600,000 per year. Population growth continued at about the same pace but people didn’t move into homes of their own. That means for the three years of 2008, 2009, 2010 we had “Shadow Demand” forming around 2 million potential homes that can’t wait to launch on their own.
In the chart above, you can see that households get formed during times of economic strength. People hide when the economy is bad.
Household formation in the five years of the housing bust was lower than any five year period since the 1960s. This is the Shadow Demand and it’s now hitting the real estate market. These millions of potential buyers were waiting until they were financially stable and until the bargains arrived. In 2012, these conditions converged. In 2013 employment and recovery is stronger. Real estate demand is higher.
Despite all the risks in the US and global economies, the 2012 real estate market’s demand is a function of years of pent up purchases. After years of historic lows, this demand trends seems poised for a multi-year recovery.
I’m in Washington DC to talk to the National Association of Business Economics on the state of the housing market. I ran into Lawrence Yun, the chief economist for the National Association of Realtors and he mentioned that he just raised his forecast for 2013 from 4% year over year to 7-8%. That’s pretty bullish. Yun, of course, takes a lot of flack for being an industry cheerleader rather than objective. So he should be bullish, right? I told him he’s still too low.
The logic is this: in 2012 US Housing Prices climbed between 5 and 12%, depending on which measure you choose. The Case-Shiller Index climbed 6.8% year over year at the end of 2012. Here in 1Q 2013, all the leading indicators are stronger than they were a year ago. (For those of you just tuning in, this is the third in a series of “home prices are stronger than you think” posts from me this winter.)
Note that all these measures, except for Altos, focus on the closed transactions. They are, by definition, lagging. It makes sense that, in an accelerating market, the Altos number is going to hit it’s high several months before the others do.
The always-lucid Bill McBride at CalculatedRisk saw homes prices rise in 2012 but anticipates a slowdown in 2013, though he doesn’t say why.
Composite Prices. Single Family Homes. Altos 20-city (national) composite. Data as of February 22, 2013. Source: Altos Research
If you observe that home prices rose at x% last year and that the conditions (low supply, high demand) that created that rise are stronger this year, it’s reasonable that your models should indicate stronger price appreciation this year. Don’t be surprised when 2013 turns out to be another roaring year for home prices.
