3 Financial Reasons to Buy a Home NOW!

Sotheby‘s Realty, Newton, MA.  Top Agents for Buyers and Sellers, Newton, MA.

 

Posted: 27 Mar 2013 04:00 AM PDT   This week, we are going to look at the three financial reasons to buy a home now instead of waiting: prices are rising, interest rates are increasing and rents are skyrocketing. – The KCM Crew  Rents Are Skyrocketing Whether you own or rent, you will have a monthly housing expense. The question is how that expense will change in the future. When you purchase a home, for the most part, you lock-in that monthly housing expense for the length of the mortgage you take (15 or 30 years for example). When you rent a home, your housing expense is impacted by movements in the supply and demand for rental properties. Historically, residential rental rates increase by 3.2% on an annual basis. However, in the current housing environment, there is an increasing demand for residential rental properties. This increase in demand has dramatically impacted rates. Zillow, in their most recent report, revealed that rental rates in the U.S. increased by 4.5% over the last twelve months. Other studies have projected rental rate increases of 4-5% over the next few years. The only way to have control of your housing expense is to buy. But Isn’t Buying Much More Expensive Than Renting? Not right now! As a matter of fact, with prices down and mortgage rates at historic lows, it is LESS EXPENSIVE to buy than rent in most areas. In a recent report, Trulia revealed it is cheaper to buy than rent in ALL of America’s largest regions. According to Jed Kolko, Trulia’s Chief Economist: “People who didn’t buy a home last year may have missed the bottom of the market, but they haven’t completely missed the boat. Buying remains cheaper than renting in all 100 large metros. Even buyers who can’t get today’s lowest mortgage rates will still find that buying makes more financial sense than renting in nearly all local markets.” However, Kolko went on to say that this opportunity may soon disappear: “Although buying a home is still cheaper than renting, the gap is closing. In 2013, home prices should rise faster than rents, and mortgage rates are likely to rise in the next year as the economy improves. By next year, buying could be more expensive than renting in some housing markets, even for people with the best credit.” Again, the only way to lock-in your monthly housing expense is to take that decision out of the hands of a landlord by owning. With both prices and interest rates set to increase, the best time to buy is right now.

 

 

Top 10 Remodeling Projects

Sotheby’s Newton, MA, top buyer and seller agent in Newton, MA.

 

Top 10 Remodeling Projects [INFOGRAPHIC]

by THE KCM CREW on MARCH 22, 2013 · 0 COMMENTS

• 

Original InfoGraphic by California Association of Realtors (CAR)

 

Real Estate is a Simple Business: Supply and Demand

Sotheby‘s Realty, Newton, MA.  Newton, MA real estate,  Listing and Buyer Agent, Newton, MA

Future House Values? Simple as Supply and Demand Posted: 04 Mar 2013 04:09 AM PST   For some time now, we have attempted to shed light on the fact that pricing in today’s real estate market, as it is in the markets for every other saleable item, will be determined by the concept of ‘supply and demand’. According to dictionary.com: “The relationship between supply and demand determines the price of a commodity. This relationship is thought to be the driving force in a free market.” In real estate, supply and demand is represented as the current month’s supply of homes for sale (the number of homes for sale divided by the number of homes sold in the previous month). While there is no steadfast rule that will apply to pricing in every category of housing, here is a great guideline: 1-4 months supply creates a sellers’ market where there are not enough homes to satisfy buyer demand. Appreciation is guaranteed. 5-6 months supply creates a balanced market. Historically home values appreciate at a rate a little greater than inflation. 7-8 months supply creates a buyers’ market where the number of homes for sale exceeds the demand. Depreciation follows. What is happening across the country right now? In most parts of the country, home values are rising. This is for two reasons: According to NAR’s latest Existing Homes Sales Report, raw unsold inventory is at the lowest level since December 1999 when there were 1.71 million homes on the market. According to this month’s Pending Sales Report from NAR, houses going into contract reached levels last seen in April 2010 which was the month the Home Buyers’ Tax Credit expired. This has resulted in a 4.2-month supply at the current sales pace which is the lowest housing supply since April 2005 when it was also 4.2 months. Based on the table above, we can see that the supply/demand ratio is leaning toward a sellers’ market where prices will appreciate. That has created positive movement in housing values in most parts of the country. When your real estate professional discusses home values, he/she should be prepared to show what the supply/demand ratio for homes similar to yours is in your area.

 

 

Is There a Window of Opportunity for Sellers Right Now?

Sothebys, Newton, MA.  Listing and Buying Agent, Newton, MA.  Top Agent Newton MA.

Is There a Window of Opportunity for Sellers Right Now? YES YES YES there is an opportunity here in Newton, MA!!!

by THE KCM CREW on FEBRUARY 25, 2013

• One of the most interesting revelations of the latest National Association of Realtors (NAR) Existing Home Sales Report is the shortage of housing inventory being reported throughout much of the country. At the same time, buyer demand is dramatically up over last year.  Here are some key points:

• Total housing inventory at the end of January fell 4.9 percent to 1.74 million existing homes available for sale, which represents a 4.2-month supply at the current sales pace.
• This represents the lowest housing supply since April 2005 when it was also 4.2 months.
• Listed inventory is 25.3 percent below a year ago when there was a 6.2-month supply.
• Raw unsold inventory is at the lowest level since December 1999 when there were 1.71 million homes on the market.

What Does This Mean if You Are Selling a Home?

The price of anything is determined by supply and demand. According to NAR’s report, inventory is at its lowest level since the real estate boom eight years ago. At the same time, demand is up. Lawrence Yun, NAR chief economist, reveals:

“Buyer traffic is continuing to pick up, while seller traffic is holding steady. In fact, buyer traffic is 40 percent above a year ago, so there is plenty of demand butinsufficient inventory to improve sales more strongly. We’ve transitioned into a seller’s market in much of the country.”

Does that mean you should sell your house now? Or should you wait to see if prices increase? Nobody knows for sure. However, some feel that there may be a pent-up inventory about to come to the market because, as prices increase, it will free up some sellers who have been locked in a negative equity situation (where the house is worth less than the remaining mortgage).

The Zillow Negative Equity Forecast predicts:

“The negative equity rate among all homeowners with a mortgage will fall to at least 25.5 percent by the fourth quarter of 2013, freeing more than 999,000 additional homeowners nationwide.”

If these homes come to market, the supply/demand ratio will begin to balance out and lessen the opportunity a seller now has.

Calculated Risk, a well respected blog which analyzes the economy:

“With the low level of inventory, both in absolute numbers and as a month-of-supply, and the recent price increases in some areas, it would seem likely more inventory would come on the market.”

Lawrence Yun agrees:

“We expect a seasonal rise of inventory this spring.”

Yet, Yun is quick to add:

“It may be insufficient to avoid more frequent incidences of multiple bidding and faster-than-normal price growth.”

Probably the most interesting comment on this comes from Calculated Risk:

“I need to think about this…This will be an interesting issue all year.”

This is an issue that is important to every seller. Make sure that you are working with a true professional that is dedicated to keeping current on what matters in the real estate market so he/she may provide you with the best advice possible as this situation becomes clearer.

 

 

 

5 Reasons You Should Buy a Home NOW!

Newton, MA. real estate, Top Agent Newton, MA,  Newton Centre  Sotheby’s Real  Estate, Newton, MA.

Many potential buyers are waiting until they can be 100% sure the real estate market has fully recovered before making the move to purchase a home. Here are five reasons why waiting might not make sense any longer: 1.) Prices Are on the Rise The latest Case Shiller Home Price Index revealed that home prices have appreciated 5.5% over the last year. This is occurring across the nation as increases were reported in 19 of 20 metros. The Home Price Expectation Survey, which polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts, calls for continued appreciation over the next five years. 2.) Mortgage Interest Rates Are Expected to Increase The Mortgage Bankers Association has predicted that, after reaching record lows in 2012, mortgage rates will creep up slowly in 2013 to 4.4%. Rates have already increased by 2/10 of a point (3.32 to 3.53) in the last two months. 3.) Rents Are Continuing to Skyrocket Recently, Zillow  reported that rents in the U.S. increased by 4.2% over the last year. Increases were 5% or more in many major metropolitan areas including Chicago, Boston, San Francisco, Detroit, Baltimore, Denver, San Jose and Charlotte. 4.) New Mortgage Regulations Will Be Announced Later This Year Six regulators, including the Department of Housing and Urban Development, the Office of the Comptroller of the Currency and the Securities and Exchange Commission, are currently drafting the new Qualified Residential Mortgage (QRM) rule. They will decide on two major requirements for buyers looking to qualify for a mortgage: minimum down payment and minimum FICO score. Many experts believe the new rules will be more stringent than current requirements.  5.) Timelines Will Be Shorter The dramatic increase in transactions caused many challenges to the process of buying or selling a home in 2012. We waited for inspections, dealt with last minute appraisals and prayed that the bank didn’t ask for ‘just one more piece of paper’ before issuing a commitment on the mortgage. There are fewer transactions this time of year. That means that timetables on each component of the home buying process will be friendlier for those involved in transactions over the next 90 days. These are five good reasons why you should consider buying a home today instead of waiting.

 

EXISTING HOMES FOR SALE AT LOWEST POINT IN 11 YEARS

Top Brokers, Newton, MA.  Newton, MA. real estate, Buyer and Listing Broker, Sotheby’s, Newton, MA

 

I know I sound like a broken record….. wouldn’t you rather sell your house with little competition?

• Home sales dropped last month, but not because demand was lacking. There are fewer homes for sale than at any time in the last 11 years.

According to the National Association of REALTORS®, Existing Home Sales for December 2012 fell to a seasonally-adjusted, annualized rate of 4.94 million homes from November’s tally of 4.99 million existing homes.

The Existing Home Sales report is based on the number of closings for previously-owned, single-family homes, townhomes, condominiums and co-ops. It’s estimated that existing homes account for 85 to 90 percent of all home sales nationwide.

2012 was a good year for housing. Sales of existing homes climbed 12.8 percent as compared to the December 2011 tally, which may be a strong indicator of future mortgage originations and short-term demand for home-related goods.

Based on preliminary sales figures, the number of home resales in 2012 grew 9.2 percent to 4.65 million homes as compared to 4.26 million homes sold during 2011. This marks the highest number of home resales sold in 5 years — a time which predates the recession of last decade.

In addition, the median price of a homes resale read $180,800 in December, which is a 11.5 percent increase as compared to December 2011, and the tenth consecutive month of year-over-year median price growth.

Not since November 2005 has the median home resale price climbed this quickly

Furthermore, the supply of existing homes fell to 4.4 months in December, down 0.4 months from November. At the current pace of sales, the national home resale inventory will be sold by June. This is an important statistic because home supply of less than 6.0-months is thought to represent a “seller’s market”.

There are also just 1.82 million existing homes for sale nationwide — the fewest since January 2001, and a 22 percent reduction from one year ago. With buyer demand high and home inventory down, home prices are likely to rise in Boston are and nationwide throughout 2013.  

 

 

Six Reasons Housing Inventory Keeps Declining

Sotheby’s Newton, MA.  Top Realtors, Newton, MA.  Newton, MA. real estate

 

A post I want to share with you….

By Nick Timiraos

 

The number of homes for sale fell to 1.82 million at the end of 2012, an 8.5% drop from November.

Home sales in December dropped by 1% from November, the National Association of Realtors reported on Tuesday, but still stood nearly 13% above the levels of one year ago. That means home sales have risen from the year-ago month for 18 straight months.

For 2012 as a whole, sales were up 9% to 4.65 million units, the highest annual total since 2007.

Prices, meanwhile, are picking up because the number of homes for sale continues to drop despite the sales volume gains. The number of homes for sale fell to 1.82 million at the end of 2012, an 8.5% drop from November and a 21.6% decline from one year earlier, the Realtors’ group said on Tuesday.

Here’s a breakdown of why inventory has continued to drop this year:

Many homeowners are underwater: More than 10 million homeowners owe more on their mortgage than their homes are worth, according to CoreLogic Inc. CLGX -1.45% That pencils out to around 22% of homeowners with a mortgage, or 15% of all homeowners (since not every homeowner has a mortgage). Underwater owners aren’t likely to sell unless they need to move due to changing life (marriage, divorce) or financial circumstances, and they’ll take a hit on their credit for pursuing a short sale, where the bank allows the home to sell for less than the amount owed.Data from CoreLogic show that inventory has been the most constrained in housing markets where there’s the largest concentration of underwater borrowers.

Others don’t have enough equity to “trade up”: Another 10 million homeowners have less than 20% equity in their current residence, meaning they can’t easily “trade up” to their next house. Traditionally, homeowners have relied on home equity to make the down payment on their next home, and to pay their real-estate agent to sell their current home and buy their next one. These “under-equitied” homeowners—meaning they don’t have enough equity to make a move to a more expensive home—have added to the drag on inventory.

Everyone wants to buy at the bottom, but few want to sell: Even those people who do have plenty of home equity are likely reluctant to sell if they think prices will be higher tomorrow. Would you sell your largest asset today if you thought it might be worth 5% more next year? This helps explain why markets such as Denver and Dallas, which didn’t have huge housing bubbles and thus had smaller shares of underwater borrowers, have also seen double-digit inventory declines.

More purchases from investors of all stripes: From the big institutional investors that have been grabbing all the headlines, to the mom-and-pop landlords that have traditionally played a much larger role renting out homes, investors have increasingly bought homes that can be rented out rather than flipped and resold for quick profits. This is further keeping inventory off the market in two ways: homes that are bought at courthouse foreclosure auctions never show up on multiple-listing services when they’re initially sold. They’re also held out of the for-sale pool because they’re being rented out.

Banks have been slower at foreclosing: Banks and other companies that process delinquent mortgages have had trouble proving that they’ve followed state law in taking title to homes ever since the “robo-signing” scandal surfaced in late 2010, and they’ve also had to meet a host of new state and federal rules governing loan modificationsand foreclosures from settlements spawned by the robo-scandal. Banks have also become better about approving short sales and loan modifications, which has curbed the flow of foreclosed properties onto the market.

Builders have been putting up fewer homes: Housing starts were severely depressed from 2009 through 2011 and have only recently rebounded off of those low levels. Consequently, there’s been much less new home inventory being added to the market at a time when demand (boosted by increases in household formation) is picking up. If more homes are held off the market—for any of the five reasons above—you can bet that builders will move in to fill the void.

Many of these factors that have been dragging down inventory aren’t signs of “normal” or “healthy” housing markets—but then, we probably haven’t had a normal market for around a decade now. If anything, declining inventory shows that normal supply-and-demand dynamics are returning, which is an important step towards putting a floor under home prices and giving markets time to get back to health.

 

 

Where Have All the Home Sellers Gone?

Sotheby’s, Newton, MA.  Top Realtor Newton, MA.  Newton, MA.  real estate

January 10, 2013

There is a problem in the real estate market in the western suburbs of Boston and an easy problem to fix!  There is a supreme shortage of inventory.  As of today there are only 80 single family homes for sale and 15 of those have an accepted offer, leaving 65 active listings.  A normal market in Newton would consist of approximately 200 homes.  There are many buyers out there scrambling for houses.

Seller’s, if you are waiting for the Spring market, wait no longer– the Spring market starts in mid January in Newton and Brookline and a bit later in Wellesley.  Don’t wait until everyone else puts their house on the market, this is a supply and demand business. The timing to sell doesn’t get any better, extremely low inventory, banks are lending, buyers are desperate.  This is a supply and demand business, don’t waste this opportunity.

Call me at 617-921-6860 or e-mail margaretszerlip@gmail.com

 

West Newton Hill 2012 Real Estate Recap

Sothebys, Newton, MA.  Top Realtor Newton, MA.  Newton, MA, Real Estate  West Newton Hill

January 2013

My best wishes for a happy, healthy and prosperous New Year.    I believe this is going to be a breakout year for the Newton housing market, if inventory increases.    As of today, January 9^th  there are only 82 single-family homes for sale in all of Newton across all price ranges.  I know many of you have been waiting on the sidelines for the right time to sell and the time is now.  Sellers, the Spring market begins in late January not April.  Inventory is the lowest I have ever seen, mortgage rates are at historic lows AND banks are willing to lend.  I expect to see 2-3% gains, (possibly 5% for very special homes) by the end of 2013.  I do not expect to see 7-10% gains in value per year in the near future.

The first half of 2012 was very busy; houses were selling in record time at very good list to sale price ratios.  The momentum did not carry into the fall market as expected mainly because inventory levels were so low that there just was not anything to buy.  We have averted the fiscal cliff and survived the presidential election.

West Newton Hill had 42 homes sell in 2012 versus 25 in 2011, a considerable increase! Prices also rose along with the sales to an average sale price of $1,657,000 from $1,458,000 in 2011.  While this is good news, these numbers need further dissecting.  The market was undeniably better, but not 12% better.  What was different in 2012?  12 homes sold for 2 million or more in 2012 versus 3 in 2011.  The 2 million+ homes had been the most difficult to sell in the past 5 years and we finally broke through that barrier in 2012.  If you look at home prices on a square footage basis, it tells a different story, the price per square foot was $405.00 in 2011 opposed to $388.00 in 2012.  New construction is the most sought after home in the 2 million dollar and above range.  To break through the 3.5 million range the house needs to be new or like new on a large level lot with outstanding craftsmanship and many amenities.

Please call me with any real estate needs you have.   My formula for pricing houses is spot on.  I can be reached via phone, e-mail or text at 617-921-6860 or margaretszerlip@gmail.com.

Address                      Sale Price             SQ.FTs

64 Perkins St                  $785,700             388.00

386 Chestnut                  $800,000              442.00

24 Mt. Vernon Te              $808,425             328.00

12 Westfield Rd               $936,582              364.00

159 Mt. Vernon St             $950,000             404.00

17 Wauwinet Rd               $1,030,000          385.00

9 Wauwinet Rd                  $1,054,000          449.00

1663 Commonwealth         $1,060,000          364.00

120 Forest Ave                   $1,097,000          348.00

29 Westfield Rd.                $1,099,000           335.00

32 Leonard                         $1,111,500           320.00

1159 Commonwealth          $1,122,500          317.00

39 Valentine Park                $1,146,400          325.00

54 Ellis Road                        $1,192,500          312.91

128 Highland St                     $1,200,000         355.66

386 Highland Street               $1,220,000         404.00

58 Valentine Park                   $1,250,000         384.00

219 Fuller Street                     $1,260,000         337.00

381 Highland Street                $1,268,000         335.00

64 Myrtle St                             $1,325.000          310.00

36 Howland Rd.                       $1,360,000         485.00

50 Putnam St                          $1,366,840         312.71

318 Prince St.                         $1,420,000         282.00

33 Berkeley St                         $1,458,000         389.00

70 Crestwood Rd                    $1,510,000         400.53

9 Somerset Rd                       $1,549,000          371.00

80 Dartmouth St                      $1,550,000         646.00

146 Forest St                           $1,610,000         365.00

212 Chestnut St                       $1,790,000         380.00

224 Chestnut St                        $1,950,000         433.00

40 Wykeham Rd                        $2,000,000       400.00

212 Temple St    *                     $2,172,500        305.00

79  Hillside Ave                         $2,175,000          395.00

212 Temple St    *                     $2,300,000         323.00

315 Highland Ave                      $2,550,000         418.00

5 Crocker Circle                        $2,550,000         495.00

49 Shaw St                                $2,680,000         388.00

170 Otis St                                 $2,990,000         471.00

165 Highland  Street                   $3,585,000         618.00

18 Temple St                              $3,999,000         629.00

26 Dartmouth St                          $4,200,000         671.79

42: Sold      Average List:  $1,742,000        Average Sale:  $1,657,000   Average Living Area SQ FT: 4,177

Average Days on Market:  98   Average Sale Price per SQ FT: $388.00

*home sold twice: first for 2,300,000 and then 2,172,500

 

MASS Association of Realtors Report

Sotheby’s Newton, MA.  Top Newton Realtor, Newton, MA.  Real Estate

Mass. pending sales up again in December and for 2012

We hope you had a nice holiday season and a Happy New Year! Today we released the December and year-end 2012 pending home sales report for single-family homes and condominiums in Massachusetts. For the 20th straight month, homes put under agreement were up over the same month last year. For the complete year, the total number of homes put under agreement in 2012 significantly topped the number of homes put under agreement in 2011.

On a month-to-month basis, pending sales were down from November.

Link to release: December/year-end 2012 Pending Sales

Here are the highlights:

• Single-family pending home sales were up 15.6% compared to December 2011
• Single-family month-to-month pending home sales were down 21% from November 2012
• Condo pending home sales were up 5.6% compared to December 2011
• Condo pending month-to-month home sales were down 14% from October 2012

2012 highlights:

• 2012 Single-family pending home sales were up 25% compared to 2011 (38,502 homes in 2011 vs. 48,064 homes in 2012)
• 2012 Condomimium pending home sales were up 26% compared to 2011 (14,893 homes in 2011 vs. 18,706 homes in 2012)

Post Published: 08 January 2013

 

Lunch and Learn at Bernard’s

Newton MA., Top Realtor, Newton, MA.  real estate

Lunch and Learn at Bernard’s in the Chestnut Hill Mall, January 23, 2013 at 12:30.  Space is limited to 10 people and we will discuss current real estate market conditions followed by a Question and Answer session.

RSVP are a must…margaretszerlip@gmail.com or 617-921-6860

 

The Reasons People Moved in 2012

Newton, MA. Top Realtor  Newton MA. Homes for Sale

• 

 

Harmful Effects from Changing the Listing Price?

Sotheby’s Real Estate, Newton, MA

 

A great article I want to share…

 

 

• With the housing market showing signs of a recovery, sellers may think they can list their homes at a higher price and adjust if necessary. That may not be a good strategy. This is a post we ran last year by Ken H. Johnson, Ph.D. — FloridaInternational University (FIU) and Editor of the Journal of Housing Research. To view other research from FIU, visit http://realestate.fiu.edu/. - The KCM Crew

The Research

Are there any negative effects from changing the listing price of a property?  This question haunts Brokers/Agents as well as sellers of property every day.  At present, there does not seem to be a consensus answer to this question within the professional real estate community.  Fortunately, this question was scientifically investigated by John R. Knight. Unfortunately, few know the results of Professor Knight’s research.

In Knight, the impact of changing a property’s listing price is investigated.  Additionally, the types of property that are most likely to experience a price change are also estimated.  The findings from this research indicate that, on average, properties which experience a listing price change take longer to sell and suffer a price discount greater than similar properties.  Furthermore, bigger price changes are found to experience even longer marketing times and greater price discounts.  Finally, as for which properties are most likely to experience a price change, Knight finds that the greater the initial markup; the higher the likelihood that any given property will experience a listing price change.

Implications for Practice

Sellers as well as Brokers/Agents should therefore be aware of the critical necessity of getting the price correct from the start.  Sellers wanting to over list will ultimately take longer to sell and will sell their property for less, on average, according to Knight.  Brokers/Agents’ desire to take a listing and get the price right later will ultimately lead to their working harder according to Knight, and they are not doing their sellers any favors.  Thus, an initial and detailed analysis of the proper price is much more critical than many originally thought.

Interestingly, I have found in my own research that the direction (up or down) of the listing price change does not matter.  A listing price increase and decrease both lead to similar results found in Knight’s work – longer marketing times and lower prices.  Therefore, get the price right from the beginning.  It is best for all.

 

House and Condo Sales by Region

Newton Realtor, newtonmasshomesforsale.com

Please take note of the charts below.  Boston area is seeing a 3.8% price increase from October 2011.  Important to remember that Boston home prices fell on average 10% versus California and Florida where prices dropped 40%.

Posted: 30 Nov 2012 04:00 AM PST

 

Why Are the Letters ‘CFPB’ and ‘QRM’ So Important?

 

Newton, MA.  realtor….West Newton Hill, Realtor   I‘d like to pass this on…. As professionals in the housing market, we must be able to give expert advice to our clients in order to guarantee that they make the best decisions for themselves and their families. When talking to potential purchasers, we must be able to intelligently discuss the changes that will be taking place in 2013 because of CFPB and QRM. These changes will have a major impact on the mortgage process and a buyer’s ability to finance their purchase of a home. Consumer Finance Protection Bureau (CFPB) The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 created the CFPB. Its purpose is explained on their website: “The central mission of the Consumer Financial Protection Bureau (CFPB) is to make markets for consumer financial products and services work for Americans — whether they are applying for a mortgage, choosing among credit cards, or using any number of other consumer financial products.” The site goes on to explain: “Like a neighborhood cop on the beat, the CFPB supervises banks, credit unions, and other financial companies, and we will enforce Federal consumer financial laws.” In 2013, the CFPB will put its stamp on the mortgage industry in the United States. We should keep ourselves aware of the changes that will be coming and their impact on the home purchase experience. One of these changes will be QRM. Qualified Residential Mortgage (QRM) The Consumer Financial Protection Bureau (CFPB) and other federal agencies are currently developing guidelines for loans that will have a statistically lower risk of default, based on the underwriting guidelines and product features built into the loan. A loans meeting these new guidelines will be a qualified residential mortgage. What impact will this have on the mortgage market? According to the Qualified Residential Mortgage Resource Center:  “The bottom line is that borrowers who fail to meet the basic criteria for a qualified residential mortgage will have a harder time finding a loan, when compared to borrowers who do meet those criteria. They might end up paying a higher interest rate, as well…Financial analysts from J.P. Morgan Securities have estimated that borrowers might pay up to three percentage points more for loans that are subject to risk-retention (i.e., loans that don’t meet the definition of a qualified residential mortgage).”

 

 

Home Sellers—-WE NEED YOU!

Realtor, Newton, MA.  newtonmasshomesforsale.com,

I haven’t posted in a bit, frankly there hasn’t been much to talk about.  I have not seen inventory levels this low in the 9 years I have been in this business.  There are currently only 97 active listings on the market, a stable market would have 200 homes for sale more or less.  Sellers now is the time!  All the cards are stacked in your favor– low-interest rates, low inventory, many buyers, stable lending– it doesn’t get any better.  There is only one condition–your property must be priced accordingly.  The neighborhood, the street, the condition of the home, the competition are all factors in a successful sale, and they all must line up.  This is not a time to be greedy but a time to be optimistic. I expect that prices will increase in the 2% range.

The Spring market starts in late January or early February here in Newton.  If you are considering selling your home this Spring, don’t wait until April to contact a broker, call or e-mail me today so we can be sure your home is in top condition.  I have the tools, the resources and the know how to help you achieve your goal for a successful home sale.  I work with a variety of trades people to help you eliminate clutter, touch up paint, fix a few broken items, and most importantly a thorough cleaning to help your home sparkle.

Margaret Szerlip  margaretszerlip@gmail.com  617-921-6860

 

U.S. Home Values Jump the Most Since 2006, Zillow Says

Best Realtor, Newton, MA.  newtonmasshomesforsale.com, Margaret Szerlip

 

• U.S. home values jumped 1.3 percent in the third quarter, the biggest gain since 2006, in an uneven recovery across the country, Zillow Inc. (Z) said.

The median value rose to $153,800 from $151,800 in the previous three months on a seasonally adjusted basis, the Seattle-based property-data company said in a report today. It was the biggest increase in Zillow’s Home Value Index since the first quarter of 2006, when values rose 1.5 percent.

U.S. home values jumped 1.3 percent in the third quarter, the biggest gain since 2006, in an uneven recovery across the country, Zillow Inc. said.. Photographer: Patrick T. Fallon/Bloomberg

Oct. 19 (Bloomberg) — Adi Tatarko, founder of online-home remodeling service Houzz.com, talks about the outlook for the U.S. housing market and the focus of the website. Tatarko speaks with Tom Keene, Sara Eisen and Scarlet Fu on Bloomberg Television’s “Surveillance.” (Source: Bloomberg)

Audio Download: David Williams on Homebuilder Shares, Housing, Oct. 19

Home prices are rising nationally as the U.S. unemploymentrate declines and buyers compete for a tightening supply of homes listed for sale. Still, values fell from the second quarter in 52 percent of markets covered by the index as the traditional homebuying season ended, according to Zillow Chief Economist Stan Humphries.

“The housing market is on the mend, but the housing bottom will be a protracted one,” he said in a telephone interview. “We will see more muted appreciation in the near term before we get back to normal appreciation trends.”

In Phoenix, where investor demand is helping to boost prices, home values rose the most of the 30 largest U.S. metropolitan areas, with a 5.9 percent increase from the second quarter, according to Zillow. They climbed 3.9 percent in Las Vegas and 3.8 percent in Denver, Zillow said.

Atlanta had the biggest drop in values, falling 2.2 percent from the previous three months, the data show. New York, Philadelphia, St. Louis and Cleveland were among other large metro areas where values declined.

Local Story

The recovery is uneven across the country because of local variations in foreclosure conditions and employment, Humphries said. Growing demand from investors and foreign buyers is helping to push up values in pockets that were hard-hit by the housing crash, he said.

“The local story for each metro is beginning to reassert itself,” Humphries said.

Zillow showed a drop in values for 17 of the 41 states it covers. Of the nine states considered U.S. presidential election battlegrounds, New Hampshire, North Carolina, Ohio, Virginia andWisconsin had quarter-over-quarter declines, indicating that housing will be a key issue for many voters, the company said.

Values nationwide will increase 1.7 percent over the next year, according to Zillow’s projection. Of the 253 markets tracked by the forecast, 183 areas have hit bottom and another 41 will reach a floor in the next year, the company said.

Zillow measures the value of 100 million U.S. homes, regardless of whether they sold during the quarter, and calculates the median for its index. Other gauges, such as the S&P/Case-Shiller index, track purchase prices.

Real Estate is a supply and demand business….Newton has a very limited supply of housing currently listed for sale and that is the biggest driver of price increases.  If you are thinking of selling your home in the Newton/Brookline area please contact me at margaretszerlip@gmail.com or 617-921-6860.

 

 

 

How Do I Know My Home is Priced Right??

Newton, MA. Real Estate, Margaret Szerlip, NewtonMAhomesforsale.com

 

 

 How Do You Know Your Home is Priced Right?

WOW—you love your home, you have enjoyed it for years. Your family grew up in it! You can’t wait to sell it to someone and you just know it will have a high value because that’s what it means to you.

WRONG
…or not necessarily RIGHT…..
Here’s the upfront truth:

When you put your home on the market, it becomes a property, a commodity, the value of which will be determined by a buyer who wants it and can buy afford to buy it. Your beautiful 21 x 14 dining room with a fireplace and beautiful windows, where so many happy family memories were shared is now simply a 21 x 14 room and potential buyers are looking at it and wondering if their own furniture will fit, not thinking or caring about your happy memories.

You have lived with the 1980’s bathrooms just fine, thank you. They worked for you. Everything is in working order and it was good enough for your family all these years. A potential buyer, looking at the outdated bathrooms, is adding up the expense of tearing them out and remodeling. Then they mentally deduct this perceived cost from the price you are asking, unless you have calculated condition into your list price.  Your Realtor must be able to prove this.

Price per square foot has become ever more important.  If your Realtor cannot do this calculation for you, get a new one!  Different neighborhoods in the same town sell at an intrinsic value.  Busy streets sell for less, large level lots sell for a higher price.  Condition plays an important role.  Well done new construction, by reputable builders tend to sell at the highest price per square foot, opposed to a fixer upper.  Curb appeal, street desirability, perceived perception of the elementary school, snob appeal are all factors.  Old rules still apply, you never want to buy the most expensive house on the street, UNLESS the neighborhood is turning and all those little capes will be made into tasteful non-mcmansions.  Little jewel houses all sell for a high price per square foot.  Unique can work for and against you, unique as in a renovated barn is good, a modern structure built into the landscape-good.  A Georgian Colonial on the outside and a 1950′s retro on the inside-not so good.

So you get your house on the market and here comes the litmus test…IF you have showings but no return showings and no offers, and if  the number of showings starts to decline, THEN…. YOU ARE PRICED TOO HIGH. It is simple as that. The market is rejecting your house at the current price, not only that, your overpriced home is making the competition look good.  You are in fact helping to sell your neighbor’s home.

It would be helpful to you as a seller to walk through your own house as if you were a buyer.  Most of my sellers are also buying another property.  When they walk through a new property they don’t want to renovate the kitchen and the bath, sometimes they find it easier to move than renovate.  The truth is, I spend a lot of time convincing my clients that buyers don’t want to renovate the kitchen  in their house either.  Houses that are fully renovated sell at a premium.  Let me add that houses that are cheaply renovated with shoddy work are mentally discarded immediately.  One of the biggest turnoff’s is looking at a hastily repaired house.  Buyers get the feeling that the seller is trying to pull one over on them, and many times they are correct.

margaretszerlip@gmail.com

 

 

House Prices: Experts Becoming More Optimistic

 

Margaret Szerlip, Newton, MA. Realtor, West Newton Hill, Realtor

 

This is very good news for the housing market and confirms what we are seeing here in Newton, Brookline, Wellesley….I want to caution sellers that we are experiencing moderate uptick in prices.  I have noticed that after Labor Day at least 25% of listings seem overpriced, and these houses are still sitting on the market unsold, while their competition priced correctly were sold within the week, some with multiple offers above asking.  If you house is not getting any showings, or no second showings, your house is most likely overpriced in comparison to your competition.  When a house is overpriced it is the best advertisement for other houses.

Each quarter, Pulsenomics surveys a

“distinguished panel of over 100 economists, investment strategists, and housing market analysts regarding their 4-year expectations for future home prices in the United States.”

Here are the latest survey results.

Price appreciation/depreciation expected over the next four years:

• 2012: 2.31%
• 2013: 2.44%
• 2014: 3.25%
• 2015: 3.43%

Fiserv also released a report projecting home prices to appreciate at an average of 3.7% annually over the next five years.

The average pre-bubble (1987-1999) annual appreciation was 3.6%

Margaret Szerlip

617-921-6860  margaretszerlip@gmail.com

 

 

 

Thinking of a Vacation or Retirement Home? Buy It Now

 

Newton, MA.  real estate, Realtor, Newton, MA

 

 

by The KCM Crew on September 19, 2012 · 0 commentsWhen the economy was exploding in the early 2000s, many of us began to dream about purchasing that vacation home on the lake or securing a home in a more appropriate location for our retirement years. However, with the booming economy came skyrocketing house prices. Many of the homes we fell in love with quickly became out of reach financially. Perhaps we should take a second look at these same homes today.

With prices dropping by over 30% in some markets and with interest rates at historic lows, this may be the perfect time to do what we and our families have always dreamt of doing – buying that second home. Let’s look at the numbers.

Back in 2006 we may have seen the ‘perfect’ home but the $500,000 price tag was just out of reach. Today, we could probably get that home for $400,000 (if not less). We also would be financing it at the current mortgage rate instead of the rates available six years ago. The table below shows the difference in impact on our family’s finances:

Not every family is in the financial position to take advantage of the tremendous opportunities the current real estate market offers. But, if yours is, this may be the time for dreams to come true.

 

 

 

What Does QE3 Mean to Housing?

real estate, newton, ma.  margaretszerlip@gmail.com, best realtor, newton, ma.

 

What Does QE3 Mean to Housing?

Fed Chairman Ben Bernanke announced last week that the Fed would again be pumping money into mortgage-backed-securities as a way to stimulate the economy. The big question for us becomes what impact this will have on the housing market. There is absolutely no doubt that Bernanke had the housing industry in mind while making this decision. In his post meeting news conference Bernanke explained:

“I think that house prices are beginning to rise in some markets, which will encourage people to look at homes, will encourage lenders to make more mortgage loans. I am hoping we will continue to see progress in the housing market. That is one of the missing pistons in the engine here, housing is usually a big part of a recovery process. We haven’t had that nearly to the usual extent. And to the extent that we can support housing I think that would be a very useful outcome.”

How does keeping rates low help the market?

HSH Associates which reports on trends in the mortgage rate environment explains:

“Of all the Fed policies, driving down mortgage rates has arguably been the most successful. Low rates have fostered refinancing, putting money in homeowner pockets and helping to spur consumer spending. Those low rates have enhanced housing affordability, while the steadying aspect of the Fed’s presence in the market has allowed for more of those transactions to complete; in turn, this has helped to firm up home prices. The Fed is trying to cause at least some inflation, namely in asset prices — homes, stocks.”

But what impact will it actually have on home sales?

Keeping interest rates low will definitely help. However, we are not sure it will be a driving force in a housing recovery. Rates are already at historic lows and  the challenge to many buyers is availability of mortgage money more than it is the cost of that money (rate). HSH Associates believes:

“Looking across the potential audiences who want to buy homes, can a claim be made that interest rates are an impediment? More likely, credit ruined in the downturn, a lack of income, unemployment or even asset strength are keeping people out of the market. In addition, there is arguably a cohort which cannot participate due to a foreclosure, short-sale or deed-in-lieu effected over the last few years, and there is likely still another group who will not buy a home at all, having watched family and friends suffer mightily with real estate issues and losses in the downturn. In this way, lower interest rates aren’t much of an inducement for a lot of folks, and except at the margins, the change merely enhances the opportunity for people already well-positioned and motivated to buy a home.”

Richard Green, director of the University of Southern California Lusk Center for Real Estate, echoed this sentiment in a recent MarketWatch article:

“While QE3 certainly won’t hurt the housing market, its short-term effect will likely be limited. The constraint that is keeping people out of the housing market is absence of equity. The drop in house prices means that many borrowers are underwater on their houses, and high unemployment has prevented potential first-time buyers from accumulating down payments.”

Keeping rates low can’t hurt the market and perhaps it will encourage some move-up buyers to make the move now. But few believe it will spur a dramatic increase in home sales.

 

 

Newton, MA. Real Estate by Zip Code 2011 vs. 2012

Newton, MA. Real Estate Prices.  Margaret Szerlip, newtonmasshomesfor sale.com, Top Broker Newton, MA.

Newton, MA.  Real Estate by Zip Code

Real Estate is local, very local.  The following is a break down of Newton by zip code, 2011 vs. 2012 thus far.  Please notice the price per square foot it is as important as could be in determining the price of a home.  A seller cannot get caught up in what their neighbor’s house sold for.  This price per square foot is also very indicative of condition.

Zip                  Units                         Average Sale Price               Average Price SQ FT

02458             51                                $954,000                               $310.00

02458             49                                $1086,000                            $330.00

02459             154                              $976,000                               $345.00

02459             135                              $997,000                               $335.00

02460                        25                     $694,000                              $333.00

02460                        3                        $806,000                              $326.00

02461             58                                $756,000                               $331.00

02461             37                                $683,000                              $337.00

02462             16                                $656,000                               $346.00

02462             11                                 $780,000                              $341.00

02464             14                                $534,000                               $286.00

02464             10                                $573,000                               $293.00

02465             88                               $793,000                               $329.00

02465             79                                $1,051,000                            $351.00

02467             24                                $1,262,000                            $380.00

02467             30                               $1,396,000                            $371.00

02468                        31                                $1,559,000                            $366.00

02468                        20                               $1,790,000                            $378.00

I am going to break these numbers down even further.

Chestnut Hill 02467 North of Rte.9

02467             13                                $1,703,000                            $422.00

02467             13                                $1892,000                            $430.00

Chestnut Hill South of Rte.9

02467             10                                $813,000                               $319.00

02467             17                                $1,011,000                            $315.00

It costs roughly $110.00 per square foot more to purchase a house north of Rte. 9 in the same zip code.

Same is true for West Newton, breaking out West Newton Hill

02465             24                                $1,559,000                            $420.00

02465             21                                $1,790,000                            $435.00

02465             73                                $577,000                               $305.00

02465             58                                $691,000                               $330.00

Again, it cost about $110.00 more per square foot to purchase on West Newton Hill.

I will now break down Newton Centre even further.  Newton Centre encompasses a vast area.  It stretches north slightly  beyond  Commonwealth Avenue, east to roughly  Hobart, west to Walnut Street and south, as far as Brookline Avenue. I will separate out the immediate vicinity surround Newton Centre and walkable to the T and shops.

02459             50                                $1,077,000                            $378.00

02459             104                              $918,000                               $334.00

Or roughly $44.00 more per square foot the closer to Newton Centre proper you are.

I would love to discuss this further with anyone who is interested.  617-921-6860

 

Newton Real Estate: More Good News!

Newton MA. Realtor, Newtonmasshomesforsale.com

 

The Newton real estate market is definitely humming.  The average number of homes sold August 2011 vs. August 2012 is up 18% and the median sale price for the same time period is up 13%!

This is a simple supply and demand business….seller’s — inventory is very low.  Call me or e-mail to see what your home will garner in today’s market!  617-921-6860  margaretszerlip@gmail.com

August 2011

67 Sales

$905,000 Average List price

$877,000 Average Sale Price

$760,000 Median Price

 

August 2012

81 Sales

$1,168,000 Average List Price

$1,111,000 Average Sale Price

$875,000 Median Price

 

Mass. single-family home sales post best July in seven years

Newton, MA.  Top Agent, newtonmasshomesforsale.com, newton, ma. realtor

Warren Group: Mass. single-family home sales post best July in seven years

By Chris Reidy, Globe Staff

July sales of single-family Massachusetts homes rose 27 percent on a year-to-year basis, the best July in seven years, the Warren Group reported Wednesday morning.

A total of 4,979 single-family homes statewide sold last month, the best July for sales volume since 2005, the firm said.

The median price of single-family homes inched up about 1 percent to $318,000 from a year ago, added the Warren Group, a Boston firm that tracks real estate activity.

July condo sales in Massachusetts were up 34 percent to 1,994 units sold, and the median condo selling price was $295,000, down 0.3 percent from July 2011, the Warren Group said.

“There are a lot of good signs pointing toward a real estate recovery,” Cory S. Hopkins, editorial director of the Warren Group, said in a statement. “But we are comparing sales to a very depressed market last summer, so it’s important to step back and realign expectations.”

The Massachusetts Association of Realtors issued a separate monthly report Wednesday morning on the Massachusetts housing market. The association uses a different method to measure local real estate activity.

The association noted that July was the 13th straight month of year-to-year increases for sales of single family homes.

“While we’ve hit a ‘baker’s dozen’ with months of sales increases now at 13, prices continue to stabilize,” association president Trisha McCarthy said in a statement. “The probability that home prices will begin a more steady increase is good if the combination of higher buyer activity and lower inventory levels continue. What is needed are more sellers at all levels to insure that price increases happen at a more reasonable pace than during the bubble years.”

 

Newton Real Estate Reacap 2012 vs 2011

Newton, Realtor, Best Newton Realtor, Listing and Buyers Agent Newton, MA.

Yes the real estate market in Newton is better!  Inventory is extremely low…homes are going under agreement at an accelerated pace.

January 1, 2011 through August 15, 2011

335 Homes Sold

Average List Price – $978,000

Average Sale Price – $944,000

Median Sale Price – $$785,000

January 1, 2012 thru August 15, 2012

425 Homes Sold

Average List Price – $996,000

Average Sale Price – $$965,000

Median Sale Price – $804,000

These numbers correlate to a 20% increase in volume and a 2% increase in sale price.  Currently there are only 125 single family homes on the market.  Since this is a supply and demand business I would expect the sale price to continue on an upward trajectory, however, I do not see prices increasing at the fast pace they did in the old days.  Inventory will increase after Labor Day but 2012 is the first sellers market since 2007.  Seller’s,  get your home ready for sale, and I do mean ready; painted, de-cluttered, clean, repairs made.  Houses in excellent condition are selling at a considerable premium!  Conversely, houses that are not well cared for sell at a discount.  If you have $2,000.00 — spend it getting your house in order, you will get it back and more…!  Paint is an amazing tool!

 

MA. Pending Sales Increase Hits 15 Straight Months in July!

Newton, MA.  Realtor, Newtonmasshomesforsale.com, best Newton, MA. Realtor

Mass. Pending sales increases hits 15 straight months in July

Today we released our July pending home sales numbers and for the 15th straight month, single-family and condominium pending sales have gone up.  On a month-to-month basis pending sales have ticked down from June . This is the 2nd straight month-to-month decrease.

Link to release: July 2012 Pending Home Sales

Here are the highlights:

• Single-family pending home sales were up 33.58% compared to July 2011
• Single-family month-to-month pending home sales were down 8.52% from June 2012
• Condo pending home sales were up 29.87% compared to July 2011
• Condo pending month-to-month home sales were down 11.78% from June 2012

 

The Difference Between Excellent and Perfect

 

Newton, MA.  real estate, top Realtor Newton, MA.  newtonmasshomesforsale.com

 

by The KCM Crew on July 31, 2012

Why does a buyer or seller look for a real estate professional in today’s new market reality? There’s plenty of information readily available for them to look at and analyze as they’re going through the process.

That’s just the point. Information being readily available causes confusion. That’s when people seek out professionals (whether it be a doctor, lawyer, or real estate professional) for an analysis of the information and their situation. Because of the wealth of information available, people are yearning for expert advice.

Don’t be afraid of those two words. Remember:

• An expert doesn’t mean you’re going to give perfect advice.
• An expert means you’re going to give excellent advice.

Here’s the difference:

If you go to a doctor with a serious illness, she can’t tell you how it’s all going to wind up in the end. She doesn’t know. If she did, that would be perfect advice.

However, your doctor can give you excellent advice in that she can tell you about your illness and your options, whether it be surgery or medications. She can also explain what she believes to be the best option for you based on your history, symptoms, and overall health. Ultimately, though, you’re going to make the final decision of whether you go through with the treatment plan.

Once you make that decision, your doctor will take you by the hand and walk you down the road to recovery. She will explain to you that there might be adjustments that need to be made to the treatment plan, because no one can know for certain how things will turn out. She might have to adjust your medications or increase or decrease your treatment schedule. But every step of the way, she’s there with you, helping you get to your ultimate goal. This is called excellent advice.

Similarly, if you went to an attorney, he can’t tell you how the case is going to end up or how the judge or jury will rule. That would be perfect advice. What a good attorney can do is explain your options. He might pick one or two options he believes to be the best ones to pursue. He will then leave you to make the decision on which option you want to take. Once you decide, he will help put a plan together based on the facts at hand. He will help you get to the best possible resolution of the case. And along the way, he’ll make whatever changes are needed. This is excellent advice.

Your role as a real estate professional is similar to the role of the doctor and lawyer. You can’t give buyers or sellers perfect advice because you don’t know what’s going to happen—you can’t predict the future. However, you can give excellent advice based on the information and situation at hand. You can guide them through the process and help them make the necessary changes along the way. And that’s exactly what your clients deserve…and want!

Related articles

• Newton, MA. Housing Recap (szerlip.wordpress.com)

 

 

Mortgage Rates Crush Previous All-Time Lows

 

Newton, MA.  real estate, newtonmasshomesfor sale.com

 

Mortgage Rates Crush Previous All-Time Lows

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Jul 23 2012, 2:23PM

Mortgage Rates are on an undisputed tear, moving more today than any day in the past 3 weeks of progressive movement into new all-time lows.  The week began much like the previous week ended, with concerns over the European financial system pulling all manner of ‘safe-haven’ bond yields lower, among them MBS (the Mortgage-Backed-Securities that most directly influence mortgage rates).

Once again, there was nothing on the domestic economic calendar and corporate earnings had little effect next to news that a third region in Spain will now request assistance from Spain’s central government.  Combined with a glut of generally gloomy news overnight, 10yr Treasury yields hit new record lows before domestic trading commenced.  The balance of the day has simply seen rates move in narrow, sideways patterns near these extreme levels.

 

Even though Friday had been fairly brisk in terms of the pace of improvement for mortgage rates, today was brisker in most cases.   Best-Execution rates for 30yr Fixed, Conventional loans are a foregone conclusion at 3.5% and there’s an even stronger case for 3.375% at some lenders.  That said, 3.5% continues to be a more efficient combination of rate and fee at most lenders.

(Read More:What is A Best-Execution Mortgage Rate?)

Long Term Guidance: We’d continue to advocate against trying to “get ahead” of current market movements due to the high degree of uncertainty.  In the past, we would have interpreted that advice as a suggestion to lock, but in the recently “low and sideways” environment, it’s probably better-read as a suggestion to go with the flow of gradually lower rates until we see the pattern definitively break.  It’s a reasonably safe assumption that European concerns will generally continue to apply downward pressure on rates although there are no guarantees that the right piece of news or economic event couldn’t mark “the turning point” at which rates bottom out.  On any given day, rates have been at or near all-time lows and in the grand scheme of things, unable to move lower as quickly as Treasuries for example.  So although there is potential gain from floating, it’s still a historically excellent time to lock if you’d prefer to take the risk off the table.

Loan Originator Perspectives

Ira Selwin, Vice President Of Secondary Marketing, US Mortgage Corporation

I have officially changed my thoughts from “Lock” to “Float”. I feel that right now is the time to float, but always have your Loan Officer ready to lock your loan at a moments notice in case things turn the wrong way.

Victor Burek at Benchmark Mortgage

If you have been following my advice(i said Friday don’t lock anything), it is the same today as it has been. Float until you are within 15 days of closing, then lock. Yes, rates might edge a little lower during that 15 days, but at some point you must lock. Don’t make the mistake of trying to time the bottom as the only way to know rates are at rock bottom is once they have passed, but then it is too late.

Julian Hebron, Loan Agent, Branch Manager, RPM Mortgage

Sticking to the plan I laid out last with all clients. It’s the safest way to manage a declining but unpredictable rate environment. Here it is: Locking purchases as they ratify to capture current lows for clients whose purchase contracts dictate a specific timeline. Decisions to lock refis are specific to each client. If they’ve recently closed a purchase or previous refi (thus rate is only slightly higher than current market), it’s either a float or a no-cost refi depending on breakeven math for closing fees spent previously. If they haven’t refinanced in awhile (thus rate is much higher than current market), it’s a lock—whether those locks are cost or no-cost also depends on math best suited to client profile and expected time horizon in the loan and/or home.

Today’s BEST-EXECUTION Rates 

• 30YR FIXED –  3.5%, Some Approaching 3.375%
• FHA/VA - 3.25-3.5% (varies more between lenders than conventional 30yr Fixed)
• 15 YEAR FIXED –  2.75 – 2.875%
• 5 YEAR ARMS -  2.625-3. 25% depending on the lender

Ongoing Lock/Float Considerations 

• Rates and costs continue to operate near all time best levels
• Current levels have experienced increasing resistance in improving much from here
• Rates could easily move higher or lower, but given the nearness to all time lows, there’s generally more risk than reward regarding floating
• But that will always be the case when rates operate near all-time levels, and as 2011 showed us, it doesn’t always mean they’re done improving.
• (As always, please keep in mind that our talk of Best-Execution always pertains to a completely ideal scenario.  There can be all sorts of reasons that your quoted rate would not be the same as our average rates, and in those cases, assuming you’re following along on a day to day basis, simply use the Best-Ex levels we quote as a baseline to track potential movement in your quoted rate).

 

 

 

 

The Difference Between a Short Sale and a Foreclosure

newtonmasshomesforsale.com

 

This week, we are looking at the advantages of a short sale over a foreclosure from five different perspectives: the Sellers’, the Neighborhoods’, the Banks’, Prices and the Children. – The KCM Crew

Real estate professionals are handling an increasing number of distressed properties. Which is a better alternative for the seller – short sale or foreclosure? Here are the advantages of doing a short sale:

It allows a more dignified exit from the home.

In a foreclosure, an official eventually comes to the home and tells the occupants to leave – immediately. In a short sale, the seller knows the closing date and can prepare in advance for the move. In many cases, their neighbors, friends and family needn’t even know of their financial difficulties.

The seller could possibly avoid a deficiency judgment.

In almost all distressed sales, the bank can legally go after the seller for the difference between the loan amount and the selling price (known as a deficiency judgment). Most banks will release the seller from this obligation in a short sale process.

A short sale has less of a negative impact on their credit report.

Once a short sale is completed, the sellers begin to clean-up their credit report. The timeline can be much longer as a foreclosure proceeds through the process.

(For more on this go to: Short Sale vs. Foreclosure: A Short Sale Always Wins)

The seller can return to homeownership more quickly.

If a family allows the house to go to foreclosure, it may take 5-7 years to again qualify for a mortgage. In the case of a short sale, the timetable can be 2-4 years.

There is a ticking clock on tax relief.

There is currently legislation, the Mortgage Forgiveness Relief Act of 2007, ensuring that homeowners who received principal reductions or other forms of debt forgiveness on their primary residences do not have to pay taxes on the amount forgiven. This legislation is set to expire at the end of the year.

 

Stunned Buyers are Finding Bidding Wars Are Back!

 

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WSJ

A new development is catching home buyers off guard as the spring sales season gets under way: Bidding wars are back.

From California to Florida, many buyers are increasingly competing for the same house. Unlike the bidding wars that typified the go-go years and largely reflected surging sales, today’s are a result of supply shortages.

Peter Earl McCollough for The Wall Street JournalDebbie and Bill Wetherell received multiple offers for their home.

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Is it time to buy your first home?

“It’s a little surprising because we thought bidding wars were done with,” said Andy Aley, who is looking to buy his first home in Seattle’s Beacon Hill neighborhood. The 31-year-old attorney was outbid this year when he offered up to $23,000 above the $357,000 listing price and agreed to waive inspections and other closing conditions.

Competitive bidding in the current environment isn’t producing huge price increases or leaving sellers with hefty profits, as occurred during the housing boom. Still, the bidding wars caused by tight inventory provide the latest evidence that housing demand is starting to pick up after a six-year-long slump.

An index that measures the number of contracts signed to purchase previously owned homes rose in March to its highest level in nearly two years, up 12.8% from a year ago and 4.1% from February, the National Association of Realtors reported on Thursday.

“We very much believe we’ve hit bottom,” said Ivy Zelman, chief executive of a research firm, who was among the first to warn of a downturn seven years ago. Earlier this week, she raised her home-price forecast for the year, calling for a 1% annual gain, up from a 1% decline.

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The Wall Street Journal’s quarterly survey found that the inventory of homes listed for sale declined sharply in all 28 markets tracked. Real-estate agents consider a market balanced when there is a six-month supply of homes for sale. At the height of the housing crisis, in 2008, there was an 11.1-months’ supply. In March, there was a 6.3-months’ supply.

Inventory levels in many markets were at the lowest level in years. At the current pace of sales, it would take just 1.5 months to sell all the homes listed in Sacramento, Calif., and 2.4 months to sell all the homes listed in Phoenix. San Francisco and Washington, D.C., each have 3.4 months of supply, while Miami has 4.1 months of supply.

Other markets have plenty of homes. Chicago, for example, has 9.4 months of supply, while New York’s Long Island has 16.1 months of supply. Even in those markets, the number of houses for sale is edging down.

Increased competition is frustrating buyers and their agents. “We’re writing a record number of offers, but we’re not seeing a record number of closings and that’s because it’s so competitive,” said Glenn Kelman, chief executive of real-estate brokerage Redfin Corp. in Seattle with offices in 14 states.

Nearly 83% of offers that Redfin agents have made on behalf of clients in the San Francisco Bay area this year and 71% in Southern California have had competing bids. Redfin represented a buyer that made the winning bid on a Gaithersburg, Md., home earlier this month after agreeing to adopt the dog of the seller, who was relocating and looking to find a new home for “Buddy,” a white toy poodle.

Inventories are declining for a number of reasons. Some sellers, unwilling to accept prices that are still down from their peak by one-third, are taking their homes off the market in anticipation of higher prices down the road. Meanwhile, investors have been outmaneuvering consumers for the best properties, often making cash offers that are quickly accepted by sellers.

In addition, some economists say that inventory levels are being held artificially low because Fannie Mae, Freddie Mac and the nation’s biggest banks have been slow to list for sale hundreds of thousands of foreclosed homes they currently own. The lenders slowed down foreclosure sales and repossessions after record-keeping abuses surfaced 18 months ago.

Banks and other mortgage investors owned nearly 450,000 foreclosed properties at the end of March, and another two million mortgages were in some stage of foreclosure.

Inventories could rise, putting more pressure on prices, if the banks and other lenders step up their efforts to sell their properties. Real-estate agents say they aren’t concerned. “There’s an enormous appetite for foreclosures. Release the inventory. It will sell,” said Richard Smith, chief executive of Realogy Corp., which owns the Coldwell Banker and Century 21 real-estate brands.

The declining inventory of older homes is spurring sales of new homes. New home sales are up 16% so far this year, compared with a year ago, while inventories of new homes fell in March to their lowest level since record keeping began in 1963.

Meritage Homes Corp., a builder based in Scottsdale, Ariz., reported Thursday a 36% increase in orders for the quarter ending in March versus the previous-year period.

Even though bidding wars are pushing prices higher, many homes are still selling for prices far lower than a few years ago. Increased demand is “entirely affordability driven, which tells me there will be strong resistance to price increases” by buyers, says Jeffrey Otteau, president of Otteau Valuation Group, an East Brunswick, N.J., appraisal firm.

Rents are rising at a time when mortgage rates have fallen to very low levels. The result is that the monthly mortgage payment on a median-priced home is lower than any time since the 1990s. Freddie Mac reported on Thursday that mortgage rates fell to 3.88% for the average 30-year fixed rate mortgage, near its lowest recorded level.

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Rates are “so low that we can afford a house that was out of our price range before,” said Aarthi Srinivasan, who is looking with her husband for a home around Palo Alto, Calif., one of the country’s hottest real-estate markets.

Ms. Srinivasan says she fears that prices are being bid up too quickly. She says she had her “aha moment” earlier this year while touring a 50-year-old house that needed extensive remodeling. The home, listed at $1.1 million, received nearly 10 offers and eventually went under contract for more than $1.3 million to a buyer who hadn’t even viewed the property.

“There are only so many buyers who are going to be in such a hurry, so we’re hoping it’ll top off soon,” she says. On Monday, they offered to pay more than the $1.2 million list price for a four-bedroom, bank-owned foreclosure. They haven’t found out if they made the top bid.

On the other side of those transactions are sellers like Debbie and Bill Wetherell, who had 17 offers in four days for their four-bedroom home in Danville, Calif. “I was floored. It was so fast, it was surreal,” says Ms. Wetherell. The home sold on Wednesday for $796,000, more than $50,000 above the asking price.

Still, the sale is for nearly $180,000 less than what they paid for the house in 2005. Ms. Wetherell’s husband has commuted to Reno, Nev., for five years and they have decided to relocate.

Housing markets face other headwinds. More than 11 million homeowners owe more than their home is worth. It is a big reason that the “trade-up” market has been stalled. These homeowners can’t sell their current homes, let alone come up with the down payment for their next home.

Mortgage-lending standards remain tough. Real-estate agents say an unusually high share of deals are falling apart because homes won’t appraise at the price that buyers have agreed to pay sellers.

Still, borrowers with stable jobs are looking to make deals. Kelly Pajela-Fu and her husband offered to pay the asking price of $600,000 for a four-bedroom home in Marblehead, Mass., within a day of the property hitting the market.

“We just knew this house would go quickly,” says Ms. Pajela-Fu, a 31-year-old doctor who had lost out on an earlier offer. Their strategy to avoid a bidding war paid off: The sellers accepted their offer before having an open house.

 

 

 

Newton Real Estate Market’s Biggest Problem—Lack of Inventory!

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Summer 2012 Real Estate Trends

You may have already heard these from many sources,Case Schiller Index, WSJ, but here is another article highlighting the 5 Real Estate trends (some good, some bad) to look out for this summer:

Newton has only 130 single families listed for sale and 166 are under agreement.  A steady market is  between 200 and 215 active listings, this is a supply and demand business.  When Under Agreements outpace current inventory we are in an accelerating market.  There are MANY buyers out there.  I put a Brookline condo on the market last week and more than 6o people came to the open house…we had 4 offers by Monday and it is under agreement.  Houses in good, crisp condition sell for a premium and houses with deferred maintenance  sell at a discount.  If electric, boiler, roof, and plumbing need updating buyers will discount for that.  If you can afford to fix the infrastructure of the house–by all means do it!

5 Housing Trends in Summer 2012

• Inventory-continues to be an issue in certain markets, like ours!
• Steady Home Prices-most experts predict 3% in home prices over next 18 months
• Interest Rates-will continue to hover around 4%
• HARP-is helping borrowers qualify
• Appraisals-issues will continue throughout summer

What does this mean?  Now is the right time to sell-and to buy-there is no guarantee how long these circumstances will last, don’t waste time at the beach-get in the house hunt!(If you have not reviewed your mortgage rate in the past few months it may make sense to look again, fixed rates are well under 4% for most situations, be sure to tell your friends too) -

*Summer 2012 should be very busy with little vacation time for those of us in the industry!

 

Positive Thinking: 7 Easy Ways to Improve a Bad Day

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I needed to hear this today…….

Don’t let a bad morning ruin your entire day. Use these mental tricks to change your momentum.

 

Had a lousy morning? Things looking grim?

Not to worry. The rest of your day need not be a disaster. It can in fact become one of your best, providing you take these simple steps:

1. Remember that the past does not equal the future.

There is no such thing as a “run of bad luck.” The reason people believe such nonsense is that the human brain creates patterns out of random events and remembers the events that fit the pattern.

2. Refuse to make self-fulfilling prophesies. 

If you believe the rest of your day will be as challenging as what’s already happened, then rest assured: You’ll end up doing something (or saying) something that will make sure that your prediction comes true.

3. Get a sense of proportion.

Think about the big picture: Unless something life-changing has happened (like the death of a loved one), chances are that in two weeks, you’ll have forgotten completely about whatever it was that has your shorts in a twist today.

4. Change your threshold for “good” and “bad.”

Decide that a good day is any day that you’re above ground. Similarly, decide that a bad day is when somebody steals your car and drives it into the ocean. Those types of definitions make it easy to be happy–and difficult to be sad.

5. Improve your body chemistry.

Your body and brain are in a feedback loop: A bad mood makes you tired, which makes your mood worse, and so forth. Interrupt the pattern by getting up and moving around.  Take a walk or eat something healthy.

6. Focus on what’s going well.

The primary reason you’re convinced it’s a bad day is that you’re focusing on whatever went wrong. However, for everything going badly, there are probably dozens of things going well.  Make list, and post it where it’s visible.

7. Expect something wondrous.

Just as an attitude of doom and gloom makes you see more problems, facing the future with a sense of wonder makes you alive to all sorts of wonderful things that are going on, right now, everywhere around you.

 

Home Sales Reach Two-Year High as U.S. Rates Fall

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Reported by BLOOMBERG TODAY JUNE,25, 2010

Demand for new U.S. homes rose more than forecast in May as mortgage rates dropped, bolstering the residential real-estate market while other parts of the world’s largest economy cool.

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June 25 (Bloomberg) — Demand for new U.S. homes rose more than forecast in May as mortgage rates dropped, bolstering the residential real-estate market while other parts of the world’s largest economy cool. Erik Schatzker reports on Bloomberg Television’s “Market Makers.” (Source: Bloomberg)

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The deck of a Toll Brothers Inc. model home stands in Randolph, New Jersey. Falling borrowing costs and more affordable properties may keep luring buyers, even as a cooling job market and limited access to credit restrain the recovery. Photographer: Emile Wamsteker/Bloomberg

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Purchases climbed to a 369,000 annual rate, the most since April 2010 and up 7.6 percent from the prior month, the Commerce Department reported today in Washington. The median estimate in a Bloomberg News survey of 67 economists was 347,000. The number of houses on the market held near a record low.

Falling borrowing costs may keep luring buyers to builders like Toll Brothers Inc. (TOL), even as a cooling job market and limited access to credit restrain the recovery. The Federal Reserve last week extended a program to keep long-term interest rates low in a bid to reduce unemployment, sustain housing and prevent a global slowdown from stalling the expansion.

“It’s another sign of life in the housing sector,” said Brian Jones, a senior U.S. economist for Societe Generale SA in New York, who forecast a gain to 362,000. “It’s consistent with a gradual improvement in activity, but we’ve got miles to go before we get back to normal.”

Stocks dropped amid concern that a meeting of European leaders later this week will fail to help contain the region’s debt crisis. The Standard & Poor’s 500 Index dropped 1.6 percent to 1,313.72 at the 4 p.m. close in New York. The yield on the benchmark 10-year Treasury note fell to 1.60 percent from 1.68 percent late on June 22.

BIS Report

Elsewhere, the Basel, Switzerland-based Bank for International Settlements said in its annual report published yesterday that central banks in developed nations are confronting the limits of their ability to aid economic recovery as government efforts to strengthen finances fall short.

Bloomberg survey estimates for U.S. new-home sales, which are counted when contracts are signed, ranged from 327,000 to 375,000. The April reading was unrevised at the previously estimated 343,000, while March and February were revised up.

The median sales price increased 5.6 percent from the same month last year, to $234,500, today’s report showed. Prices have climbed on a 12-month basis since February, the best performance in five years.

Purchases rose in two of four U.S. regions last month, led by a 37 percent jump in the Northeast, while the South climbed 13 percent. Demand dropped 11 percent in the Midwest and 3.5 percent in the West.

Lean Supply

The number of newly constructed houses on the market was at 145,000 compared with the record low of 144,000 reached in April and March. The record high of 572,000 was reached in July 2006. The supply of new houses on the market at the current sales pace dropped to 4.7 months, the lowest since October 2005, from 5 months in April.

In response to improving demand, builders broke ground on 516,000 single-family houses last month at an annual pace, up 3.2 percent from April and the most this year, the Commerce Department reported last week.

The Washington-based National Association of Home Builders/Wells Fargo sentiment index rose by 1 point this month to 29, the highest since May 2007, another report last week showed.

Horsham, Pennsylvania-based Toll Brothers, the largest U.S. luxury-home builder, on May 23 reported second-quarter profit that beat estimates as orders jumped.

Suppliers Benefit

United Technologies Corp. (UTX) and Lennox International Inc. (LII), makers of heating and air conditioning units, are among companies benefitting from developers’ positive outlook. Lennox, based in Richardson, Texas, had a 40 percent increase in sales to new-home builders in the first quarter. United Technologies, in Hartford, Connecticut, forecasts about 700,000 housing starts this year, Chief Financial Officer Gregory Hayes said.

“The expectation is we’re not going to see a huge recovery in the U.S. residential marketplace, but we should see a steady recovery,” Hayes said at a June 14 conference. “Residential is coming back, but it’s very, very slow.”

The stabilization in housing has boosted builder shares this year. The Standard & Poor’s Supercomposite Homebuilder Index has climbed 33 percent this year through June 22, compared with a 6.2 percent gain for the broader S&P 500.

Residential construction hasn’t contributed to economic growth over the course of an entire year since 2005, when it accounted for 0.4 percentage point of the 3.1 percent increase in gross domestic product. From 2006 through 2009, the homebuilding slump subtracted 0.8 percent point from growth on average. The declines diminished over the past two years.

Shrinking Share

Newly constructed houses made up 6.7 percent of the residential market last year, down from a high of 15 percent during the boom of the past decade.

Sales of existing homes declined in May as fewer distressed properties reached the market, the National Association of Realtors reported last week. The decline in transactions involving foreclosures and short sales, where a lender agrees to accept less than the balance of the mortgage, helped push the median price of a previously owned house up 7.9 percent from the same time last year, the biggest 12-month gain since February 2006.

Less competition from existing houses and even lower mortgage rates may keep spurring the market. The average rate on a 30-year fixed loan dropped to 3.66 percent last week, the lowest in data going back to 1972, according to Freddie Mac.

The central bank last week aimed to keep borrowing costs low. Policy makers announced they will expand the Operation Twist program to extend the maturities of assets on its balance sheet. They said they stood ready to take further action to put unemployed Americans back to work. Fed officials also lowered their outlook for growth and employment.

To contact the reporter on this story: Lorraine Woellert in Washington at lwoellert@bloomberg.net

 

Mortgage News: Taking Advantage of Low Rates

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Mortgage News 

Taking Advantage of Low Rates

By VICKIE ELMER of The NYT – 6/14/12

The mortgage market seems to have been dancing its own version of the limbo, as interest rates headed lower and lower for six consecutive weeks.

 

Although they inched up this past week, home buyers and refinancers may be wondering how low rates can go — and how they can capture the best rates now.

“Mortgage rates tend to fall when there are concerns about the economy,” said Jed Kolko, the chief economist for Trulia, the housing information Web site.

Lately, those concerns have centered on the economic and fiscal woes in Europe, especially in Greece and Spain — along with slow job growth and weaker-than-usual corporate profits in this country, as noted in a recent Freddie Mac market survey.

Many economists are forecasting that mortgage rates will rise again later this year as the American economy gradually improves and as more global investors turn to the United States as a safe haven for their money.

“It’s really tough for rates to go much lower,” said Cristian de Ritis, the director of Moody’s Analytics. “It’s almost unbelievable that you can get a 30-year mortgage at that rate.”

The average rate on a 30-year fixed-rate mortgage fell to a record 3.67 percent nationwide in Freddie Mac’s June 7 survey, though it rose to an average 3.71 percent on Thursday. The rate had averaged 3.9 percent just three months earlier and 4.5 percent a year earlier.

Mr. Kolko said the uptick was not entirely unexpected. “We’re in the midst of so much short-term uncertainty,” he said, adding that “no single week-over-week change can be taken as the start of a long-term trend.”

Mr. de Ritis said that rates could possibly fall further, perhaps as much as a quarter of a percentage point, but he added that it was more likely that they would start “a slow drift” upward. In six months, the rate on the 30-year fixed-rate mortgage could be at 3.8 to 3.9 percent, he predicted, and a year from now, 4.1 to 4.2 percent.

“If the economy does recover more aggressively than what we think, or what investors think,” he said, “then the Fed will likely raise rates.” The next two Federal Reserve Open Market meetings, which determine credit policy, are scheduled for June 19 and 20 and July 31 and Aug. 1.

Those planning to refinance or buy a home in the next two or three months, meanwhile, might want to consider locking in their mortgage rate now.

Borrowers with rate lock-ins, with a built-in deadline, often receive priority treatment from lenders, according to Russell Tucker, a senior vice president of Investor Home Mortgage in Short Hills, N.J. By having a lock-in, he said, a borrower is telling the lender that he or she is serious about closing soon. “If you’re not willing to lock in the interest rates,” Mr. Tucker said, “you’re not doing the push-ups.”

Lock-in costs and policies vary widely, and are based partly on the time frame you want covered.

Most people will need a 60- to 90-day lock. In New York State, especially, refinancing can take longer if the borrower is transferring the balance on a loan to a new lender to avoid paying a second mortgage transfer tax, a process known as “mortgage assignment.”

If interest rates continue to fall during the lock period, borrowers can ask their lenders to rewrite the rate lock, at an additional cost, or they can obtain a “float-down” provision in the original agreement, industry experts say. A lock with a float-down agreement allows the borrower to change the rate, often only once, before closing on the mortgage. This option is generally more expensive than a standard lock.

Although mortgage rates are at historic lows, borrowers need to understand that the advertised rates are generally for those with the best credit. “If your credit is in the mid-600s instead of the mid-700s, that could be as much as an extra percentage point on your mortgage rate,” Mr. Kolko said, referring to the widely used FICO credit score.

And if you’re in the New York area and borrowing more than $625,500 — the maximum allowed for loans resold to Fannie Mae or Freddie Mac — you will be obtaining a “jumbo” loan, which tends to carry higher rates.

 

Harvard Study : 2012 Marks The Start Of “True Housing Market Recovery”

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Mortgage Rates are at historic All-Time Lows today!

Housing Market Showing Positive Signs

Harvard University’s Joint Center for Housing Studies says stabilizing home prices will boost single-family home construction throughout 2012.

The State of the Nation’s Housing 2012 report highlights several areas which suggest that U.S. housing markets are in recovery.

• Sales of homes were up 5.2% in Q1 2012 as compared to Q1 2011
• Sales of new construction homes were up 16.7% in Q1 2012 as compared to Q1 2011
• Housing starts were up 16.6% in Q1 2012 as compared to Q1 2011.

The report also found that building permits for single-family homes were up by 16.9% between Q1 2011 and Q1 2012. Building permits can be a strong indicator of home construction levels.

Echo-Boom Generation Driving Future Sales

It’s not just raw housing data that’s improving. Buyer demographics look favorable for long-term housing trends, too.

An estimated 84.7 million young adults in the “Echo Boomer” generation, the oldest of whom turned 25 in 2010, are expected to enter the housing market within the next 20 years. The Harvard study states that, as housing markets improve, more “fence-sitting” young adults will convert from renters into first-time home buyers.

Obstacles remain for the housing market overall, including a backlog of foreclosed homes. However, the report’s conclusion that concludes that “2012 will mark the beginning of a true housing market recovery” is not at all far-fetched.

Today’s home buyers face a shrinking home supply but, with mortgage rates low and lots of low down payment options available, timing could be right to buy a home. If the Harvard study is right, by next year, home values — and mortgage rates — will be higher.

 

 

 

Americans See Biggest Home Equity Jump in 60 Years: Mortgages

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By Kathleen M. Howley – Jun 14, 2012 12:00 AM ET

 

Americans are digging themselves out of mortgage debt.

Home equity in the first quarter rose to the highest level since 2008 as homeowners taking advantage of record-low borrowing costs to refinance their loans brought cash to the table to pay down principal. The gain in percentage terms was the biggest jump in more than 60 years, according to an analysis by Bloomberg of Federal Reserve data.

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Residential mortgage debt peaked in 2007 at $10.6 trillion, doubling in six years, according to Fed data. Since then, it has fallen 7 percent as the value all residential property has dropped 23 percent. Photographer: Daniel Acker/Bloomberg

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It’s the strongest sign yet that Americans’ home-loan debt burden is beginning to ease after the record borrowing that created, and ultimately popped, the housing bubble, leaving almost a quarter of homeowners with mortgages owing more than their properties were worth, said Richard DeKaser, deputy chief economist at Parthenon Group LLC in Boston. Half the mortgages refinanced in the fourth quarter reduced loan size, a record, according to Freddie Mac, the government-owned mortgage buyer.

“The willingness of homeowners to carry housing debt has been radically altered,” said DeKaser, chairman of the American Bankers Association’s Economic Advisory Council. “When the market was booming, a mortgage was used as a leveraging tool, and now it’s seen as a risk.”

Measured as a share, rather than in dollars, homeowner equity was 41 percent of U.S. residential property value in the first quarter, including homeowners who don’t have mortgages, according to the Fed study released last week. The last time the share was that high was in the third quarter of 2008.

‘Bubble Burst’

“People got too overleveraged in the boom years, and that left them with too much debt when the bubble burst,” said Paul Miller, a managing director with FBR Capital Markets in Arlington, Virginia. “Now, they’re trying to put themselves back on solid ground.”

Residential mortgage debt peaked in 2007 at $10.6 trillion, doubling in six years, according to Fed data. Since then, it has fallen 7 percent as the value of all residential property has dropped 23 percent.

Americans aren’t just bringing money to the table when they refinance their mortgages. Many also are choosing to shorten the term of their loans, which increases monthly payments. The average mortgage term fell to 27 years in March and April from 29 years February. Almost all U.S. mortgages have either 30-year or 15-year terms. When the average falls, it shows more people are choosing the shorter period.

The average U.S. rate for a 30-year fixed mortgage has tumbled since early 2011 to last week’s record 3.67 percent and refinancing applications are at a three-year high. The average 15-year rate declined to 2.94 percent.

Lackluster Recovery

DeKaser of Parthenon attributes the reduction in mortgage debt to a “fear factor.” A lackluster recovery that still has one of every 15 people unemployed has persuaded some borrowers of the wisdom of thriftiness, he said.

“People are worried about falling home prices and they’re worried about the economy,” said DeKaser. “If they can afford it, they’re paying down their mortgages instead of buying things because it makes them feel like they’ll sleep better at night.”

Home prices tumbled for six straight months through March to the lowest level in a decade, 35 percent below the peak prices of the housing boom, according to the S&P/Case-Shiller price index of 20 U.S. metropolitan areas. A 3.4 percent increase in home sales last month may signal prices are beginning to stabilize, according to Eric Belsky, managing director of Harvard University’s Joint Center for Housing Studies, in its “State of the Nation’s Housing” report issued today.

Economic Growth

The U.S. economy probably will grow at a 2.2 percent pace in 2012, the third year after the end of the recession, according to the median forecast of 93 economists surveyed by Bloomberg. That compares with a 3.9 percent average expansion rate in the third-year period following the 1982, 1994, and 2001 recessions. In 2013, the growth rate probably will be 2.4 percent, according to the economists’ average estimate.

Homeowners who are able to shorten the terms of their loans or reduce their balances when they refinance are the lucky ones, said Chris Christopher, a senior economist at IHS Global Insight in Lexington, Massachusetts.

“Homeowners who are paying down mortgage debt are the survivors,” said Christopher. “They probably didn’t lose their jobs, so they’re in a better position to do that.”

About 23 percent of mortgage holders are underwater on their loans, meaning they owe more than their homes are worth, according to CoreLogic Inc., a mortgage data and software firm in Santa Ana, California. About 2.1 million properties were in foreclosure in April, according to Lender Processing Services, a mortgage data firm in Jacksonville, Florida.

‘Bubble Days’

“Consumers’ view of the housing market clearly has been radically changed since the bubble days,” said Dean Maki, chief U.S. economist at Barclays Plc in New York. “We saw what happened to people who were way overleveraged.”

“Paying down mortgage debt is bad for economic growth — putting your money into your house usually means you’re spending less,” said FBR’s Miller. “It’s good for our economic health in the long run, though, because it improves household balance sheets.”

Retail sales in the U.S. fell in May for a second month, prompting economists to cut forecasts for economic growth as limited job growth and income gains hold back consumers. The 0.2 percent decrease matched April’s drop that was previously reported as a gain, Commerce Department figures showed yesterday in Washington.

National Income

Annual increases in national income slowed to $581 billion in 2011 from $693 billion in the prior year, according to the Bureau of Economic Analysis. The first quarter’s $127.7 billion gain puts 2012 on course for a $510.8 billion increase, the lowest since income dropped in 2009.

“People are looking around them and seeing people they know getting their salaries cut or losing their jobs,” said Miller, a former examiner with the Federal Reserve Bank of Philadelphia. “If you want security, you can put your money in a savings bank for half a percentage point, or you can pay down your mortgage.”

FBR’s Miller said when he refinanced his home loan last year, he “brought a big check to the table” to reduce his mortgage balance. The reason?

“So my wife would leave me alone,” said Miller. “Just like a lot of people, she wants to have no mortgage debt.”

To contact the reporter on this column: Kathleen M. Howley in Boston at kmhowley@bloomberg.net.

 

SOLD 18 Temple Street, West Newton, MA. $3,999,000

Amazing West Newton Hill Shingle Style

 

Sold for full asking!

Stunning 7 bedroom, 6 1/2 bath Shingle Style on a level 1/2 acre lot on West Newton Hill.  Architect, Kent Duckham, and builder, Peter Fallon, have collaborated to present an impeccable home with museum quality finishes.

Please call or e-mail Margaret Szerlip to tour this wonderful home

margaretszerlip@gmail.com  617-921-6860

 

Yet Another Housing Bear Turns Bull

NewtonMASShomesforsale.com

 

Yet Another Housing Bear Turns Bull

Every day there seems to be more positive news about the real estate recovery. We attempt to give you two things in this blog:

1. The actual data that indicates where the housing market is headed
2. Quotes from analysts who have scrutinized this data

Today, we want to give you a quote by Ivy Zelman which appeared last week in a Wall Street Journal article Stunned Home Buyers Find the Bidding Wars Are Back.

“We very much believe we’ve hit bottom.”

Why is the quote from Zelman important? She is an industry expert consistently recognized by Institutional Investor, Greenwich Associates, StarMine and The Wall Street Journal as an industry-leading analyst. She has been nicknamed ‘Poison Ivy’ for her harsh positions on housing over the last several years. Now, Zelman is calling a bottom and projecting prices to moderately increase in the next twelve months.

Again, another expert on housing is calling a bottom; another bear turns bull.

by The KCM Crew on May 1, 2012 ·

 

How to Recognize a House with Good Bones

Newton, MA.  Realtor

Please take the time to read this article that Paul Morse from Morse Construction shared with me….an excellent read!

 

How to Recognize a House with Good Bones
By Paul Morse
Owner, Morse Constructions Inc.

 
In a buyer’s market, it is particularly difficult to sell a home when its charm is disguised by outdated décor or some ill-considered updates. If you have a house that just hasn’t shown well, it may be because buyers have trouble recognizing the home’s potential. All they see is the less-than-ideal  surface without considering the strength of what lies beneath.
How can real estate agents recognize a house with “good bones” and help clients envision the possibilities of these hidden gems? When I tour properties with clients who are considering buying and remodeling a new home, we look for the following:
Quality construction – A house with good bones is well-built.  I “walk” a building looking for fundamental structural problems. How does it feel? Does it bounce or list, or does it “feel” solid? I look for cracks above doorways or in stairways.  Are things tight? When I go to the basement, I look along the bottoms of the floor joists. Do they seem to be in a flat plane or do they sag in the middle of their span? Are the joists notched into the sill or resting on their full depth? Can you see cracks between the ends and the sill or are they still tight? When looking down along the foundation wall, does it look plumb or is it listing outward? When outside the building and stepping back looking at it, do the walls have bows or are they straight? Does the house lean to one side or the other? Does the roof of the front porch sag? Are there sways to the roof or is it in one plane?
Solid infrastructure – It’s relatively simple to replace aging roofing shingles or update plumbing fixtures, but it is far more complicated if the basic infrastructure of the home is lacking. If the foundation, roof, heating, plumbing and electrical systems are in good shape, renovations become much easier.
Good floor plan – Is there good flow between frequently used rooms? Are rooms arranged logically?  Look at how traffic travels through the house as a whole. You can renovate to make particular rooms more livable, but it is far more costly and complex to make fundamental changes because the entire home’s floor plan just does not work.
If you are trying to sell a home with a floor plan that feels awkward, try to envision the space with walls moved or taken down entirely. I recently worked on a center entrance colonial in which the small dining room and kitchen made the entire first floor feel disjointed and tiny. By removing the walls between the dining room and kitchen, and the dining room and hallway, we created a sense of spaciousness without changing the footprint of the house. You may be able to get clients excited about a hard-to-sell home by helping them envision the house’s potential with a few, relatively straightforward changes.
Well-proportioned rooms – Are the home’s rooms a useful size and shape, or can they be easily changed? Many older homes have small rooms that are unsuited to modern lifestyles. It is often possible, however, to move walls and open up spaces relatively easily. Removing walls, adding a beam and creating an open a floor plan can make a separate kitchen, dining room and living room a great entertainment area or family space. On the other hand, sometimes there are fundamental problems that are not easy to correct. When I recently toured a newly renovated condo, I was surprised that I had to duck at the last step when entering the third floor master suite. The walls sloped so steeply that the “walk in closet” had almost no useable space. The room’s underlying structure was so limiting that it would have been very expensive to create space that worked well for the homeowners.
Character — Look for unique architectural details that set the home apart. Today’s homeowners are moving away from the cookie-cutter feeling of McMansions in favor of spaces that feel handcrafted and authentic. Look for special architectural touches that may currently be hidden, but could serve as a focal point with a little attention.  In one Cambridge home, we took a steep attic stairway and added a skylight and delightful handrailing to create an eye-catching, artistic feature that doubled as a  welcoming entrance to a nanny’s bedroom and owner’s office.
Natural light – A sunny, airy home feels more spacious and inviting, but don’t automatically give up on a house because it is dark. Help your client consider small changes that could bring in more light. We’ve added skylights, transom windows and even cut openings in wall and floors to help light spread throughout a home.
When our Realtor friends are having trouble selling a particular home, we suggest walking through the property without clients and studying the features and traffic flow. Analyze whether the home is a treasure with good bones that are being overlooked, or just a tough sell. If the bones are good and the price is right, a well-timed suggestion about ways to renovate the home or highlight architectural features may be just what is needed to spark renewed interest from your client.

Paul Morse is owner of Morse Constructions Inc., a Boston-area design/build firm that has been crafting distinctive home renovations and additions for more than 35 years. 617.666.4460 morseconstructions.com

 

Buying a Home? The COST Is More Important Than the PRICE

Newton, MA.  homes for sale Best Realtor, Newton, MA. We have often advised buyers to look at the COST of purchasing a house more than the PRICE of the home. Obviously, price is part of the cost equation. The other piece, assuming you are not an all cash buyer, is the mortgage rate. The mortgage rate to finance a purchase can have a dramatic impact on the overall cost. Recently, there are more people talking about the possibility that mortgage rates could begin to increase. HSH.com studies trends in mortgage rates. They explain: “A better economic climate almost always brings higher rates, and a lessening of the troubles in Europe from massive central bank assistance adds to the movement of money from safe havens to more risky assets, driving rates upward.” Dan Green of The Daily Market Reports recently stated: “The Fed sees growth coming faster than originally expected. There’s suddenly less chance that the Federal Reserve will intervene to help keep mortgage rates low. Absent Fed intervention, mortgage rates are apt to rise and Wall Street is now betting that the Fed has bowed out. With no stimulus, mortgage rates rise.” Lawrence Yun, chief economist for the National Assoc of Realtors, recently wrote: “Mortgage rates will be starting to rise. From the 3.9 to 4.0 percent average rate in the past five months on a 30-year fixed mortgage, the new rates will soon be in the range of 4.3 to 4.6 percent.” Yun explains his logic here. We do not attempt to predict future interest rates. We leave that up to the experts in the field. However, we want our readers to understand the potential impact on the cost of purchasing a home if they do rise. Here is a simple table that shows, even if the PRICE of a home softens, the COST of a home could increase. Bottom Line Many purchasers think they should wait until they are sure that prices have hit bottom. Deciding whether or not to wait should be determined by where the COST of a home is headed.

 

Newton, MA. Home Sellers…Please List Your House!

Newton, MA. homes for sale  Realtor — Real Estate, Newton, MA.

Home Sellers…there is a complete shortage of inventory!  If you were thinking about listing, now is the time!!

617-921-6860

 

 

5 Real Estate Trends to Look For in 2012 and How they Pertain to Newton, MA.

Newton, MA. Realtor

5 Real Estate Trends to Look For in 2012

by THE KCM CREW on JANUARY 3, 2012

Predicting trends during the most volatile housing market in American real estate history is no easy task. We strongly believe these are the five real estate items we should keep an eye on in 2012:

1. Buyers Will Return

In 2011, a lack of consumer confidence in the overall economy dramatically impacted the housing market. Buyers were afraid to make a purchasing decision on any big ticket item. By the end of 2011, consumer confidence began to return and sales increased. Economic conditions will continue to improve throughout 2012 and consumer sentiment will solidify. Once that happens, home buyers will realize that now is the time to buy.

Yes, buyers are returning in droves, but only for property that has a real perception of value.

2. Foreclosures Will Increase

The ‘shadow inventory’ of foreclosures which has been growing since the robo-signing challenges of late 2010 will finally be introduced to the market. Distressed properties sell at discounted prices. They will impact the housing values of the non-distressed homes in the area.

There were more foreclosures in Newton during 2011, however there are not enough of them to have a significant impact here in Newton

3. Prices Will Soften

As more and more foreclosures come to market, there will be greater downward pressure on the values of houses in the region. Foreclosures impact values of non-distressed properties in two ways:

• They will eat up some of the buyer demand in the market.
• They will impact the appraisal on ALL transactions in the area.

An increase in foreclosures will have a negative impact on values. This will cause more homes to be underwater.

Again, Newton has been spared the foreclosure debacle for the most part. Appraisals continue to be stressful, greater responsibility is required from the Agents to come armed with comps. Many appraisers have never stepped foot in Newton before.

4. Short Sales Will Increase

As mentioned above, we strongly believe that home prices will soften through at least the first half of 2012. Falling prices will force more homeowners into a position of negative equity. Negative equity is one of the triggers that cause people to strategically default on their mortgage obligations. If this happens, there could be an increase in the number of foreclosures. However, we predict that banks will take preventative measures which will help many of these homes avoid foreclosure by easing the requirements in the short sale process for both homeowners and real estate professionals.

Yes, there has been a noticeable increase in short sales. I believe this could impact the number of sales because these buyers for the most part are not moving up to larger homes. On the other hand, this is a supply and demand business, so less inventory usually means higher prices.

5. Great Agents Will Be VERY Successful

Real Estate professionals who have invested the money, time and energy to truly understand what is happening and why it is happening will separate themselves from their competition and do very well this year.

Those who take that next step of learning how to simply and effectively communicate the market to their clients will be seen as industry leaders. These experts will dominate their markets.

Yes, this is already happening. The old way of doing business doesn’t cut it anymore. You need an agent who is:

1.tech savvy

2. hard-working

3. knowledgeable

4.well-respected by the rest of the real estate community

5. strong negotiation skills with the ability to communicate effectively….sometimes that means speaking to your clients and not just e-mailing or texting.

 

The Effect of Proper Pricing

Newton, MA.  homes for sale…Newton, MA. Realtors

Yesterday my colleague Sally Bortz and I conducted an open house in the heart of Newton Centre.  The house is a solid brick colonial with 3 bedrooms on the second floor plus one on the 3rd floor.  The kitchen is small and probably last renovated in the 60′s.  The baths all need updating along with the removal of some old knob and tube wiring.  So what was so special about this house that we had over 150 groups of people many who had to wait in line to get in the house?   The price—it wasn’t priced as a give away it was priced correctly.  The house is in a neighborhood that is highly desirable and the price point created a perception of value.  The word is buyers are looking to steal houses when in reality they are truly looking for value.

As of 9AM this morning there were 11 offers that will be reviewed with the seller in an hour or so.  Her decision will be based upon price and terms, not just price.  Price is an important part of every transaction, would you choose a buyer with 10% down or  40% down?  Are you going to have faith in the buyer looking at every fault the house has or the buyer who sees the fault and says I can update them?

View our website http://newtonmasshomesforsale.com/ and call Sally Bortz and Margaret Szerlip to represent you in your next real estate transaction.

 

 

Happy Holidays Newton, MA., from Ted Kolko, Chief Economist at Trulia

Newton, MASS Homes for Sale, Newton, MA.  Realtors This confirms what I have been preaching all along, Newton, Brookline, Cambridge have not suffered severely during the housing debacle because we have a more educated and diversified population. Trulia’s Chief Economist, Jed Kolko: “Smart cities are hot.”   Here are 5 real estate markets that Jed says you should definitely keep your eye on in 2012. “In 2012, the local housing markets that will enjoy rising prices, new construction or both, are those that start the year with stronger job growth and fewer empty homes holding back the market. Based on these factors, along with other leading indicators, here are my top five cities to watch: 1. and 2. Austin, TX, and Houston, TX. The bloom’s not off the yellow rose of Texas. Steady job growth and a construction revival make Austin and Houston two of my five cities to watch. Texas isn’t hung over from the housing boom like the other big states of the South and West, so there’s little to hold back growth. Honorable mention to Fort Worth and San Antonio. 3.  San Jose, CA. Wasn’t California at the center of the foreclosure crisis? Didn’t prices there fall more than everywhere else in the country? Yup. But there’s no such thing as the California housing market: California is almost as diverse as the U.S. Even though prices plummeted and foreclosures skyrocketed in inland California, the coast is another world. San Jose’s perennially tight housing market makes it faster to bounce back. The San Jose market –which includes most of Silicon Valley – has rapid job growth and the lowest vacancy rate in the country. 4.  Suburbs of Boston, MA. This Cambridge-Newton-Framingham market just west of Boston has a strong jobs engine and, like most of New England, missed the worst of the housing bubble. Honorable mention goes to Worcester, one step further west, and Boston’s northern suburbs around Peabody. These areas all benefit from offering more bang for the buck than crowded, expensive Boston: this is because most people looking to move are searching in more suburban or smaller areas than where they live now. 5.  Rochester, NY. That’s my hometown, and knowing what’s happened to Kodak and other pillars of the local economy, I was surprised when Rochester scored on the top 5 list. (I applied the same formula to all cities and did not have my thumb on the scale.) Prices – which fell little during the boom – are stable, and the economy has weathered blow after blow and is expanding. What do these markets have in common? Three – Austin, San Jose, and the area west of Boston – are technology centers. In those three metros, as well as in Rochester, a center of high-skill manufacturing industries, education levels are well above the national average. As the recovery proceeds, smart cities are leading the way. During the housing boom, the go-go cities tended to be lower-skill, lower-education metros. But in 2012, smart is hot: it’ll be the revenge of the nerds.” Believe it or not, Jed was just getting started! He’s also compiled a list of 2012 Real Estate Market predictions that goes way beyond which markets are hot, which you can read in full, here.

 

The Wealthy Are Also Defaulting on Their Mortgages

Real Estate, Newton, MA.

 

There are many who believe that mortgage delinquencies in their region are concentrated in the middle-to-lower income neighborhoods. Actually, the research shows the number of delinquencies in the higher priced sections are currently exceeding the percentages in less affluent areas.

The most recent Mortgage Monitor issued byLPS reports that the largest increase in both delinquencies and foreclosures, as compared to 2008 levels, are in ‘jumbo’ mortgages. A jumbo mortgage, according to Wikipedia, is:

“a mortgage loan in an amount above conventional conforming loan limits…the limit is $417,000 for most of the US.”

In some parts of the country, that limit can be over $625,000. This type of loan finances the higher priced properties in a marketplace.

According to LPS, the percentage increase in jumbo mortgages is as follows:

• Delinquencies: increased 281%
• Foreclosures: increased 589%

Again, these numbers are greater than any other type of loan including Option ARMs and Sub-prime loans.

Strategic Defaults

That doesn’t necessarily mean that the more affluent don’t have the money to meet their mortgage obligations. In some cases, they see their home as a depreciating asset and determine that continuing to put money into it makes little sense. The Washington Post recently reported on this. In the article, they explained:

“The ratings agency Moody’s said that based on its analysis of mortgage-backed bond portfolios, homeowners with jumbos now constitute “greater strategic default risk” than any other type of borrowers, including subprime. That’s because an exceptionally high number of jumbo owners — many in high-cost markets hit by real estate deflation over the past several years — are stuck with persistent negative equity.”

Bottom Line

We often explain that the number of distressed properties in a neighborhood adversely impacts values of other homes in that area. It now appears that even the most affluent areas will be dealing with a supply of discounted properties entering the market as foreclosures.  This would have an extreme impact on the Newton and all west suburban Boston markets.  I have not seen any evidence of this so far, but I will let you know if I do!

The Crew at KCM

 

 

How Much Should I Put Down

Realtor, Newton, MA.  homes for sale

Another great article from the KCM Crew—–

Like most questions, the answer is “it depends”. Today, I thought I’d give you some things to consider.

Let’s begin the discussion with loans that don’t require Mortgage Insurance. The suggestion is to borrow as much as you can afford. As an example, borrowing $310,000, as opposed to $300,000, will increase your mortgage payment by about $51 at 4.5%. Recognize that by doing so, you will have $10,000 in the bank. It is my experience that it is easier to find $50 more every month than it is to save $10,000. Even if you had the discipline to set aside the $50 monthly, it would take you 200 months to re-accumulate the $10,000 in principal (longer with lost interest).

Understand too, that the interest paid on the extra money borrowed is tax-deductible. In a 25% tax bracket the $51 additional has a real cost of about $38!

 

Having the $10,000 liquid has other potential advantages as well:

1. If rates go up in the future, you could potentially make more interest than you are spending.
2. If you can avoid using credit cards for furniture, home improvements, etc., you can save a bundle on those non-tax deductible interest rate costs.
3. In a world where home values have declined, the more you borrow, the less you have at risk. You transfer the risk of the future value of the home to the lender.

Now, many borrowers today will need some sort of Mortgage Insurance, whether it’s a Conventional Loan with less than 20% down or an FHA Mortgage. These borrowers should sit with their loan officer and run the numbers because the cost of the Mortgage Insurance can vary based on loan-to-value and other factors. Examine the costs and the relative benefits.

 

House Rrices: Where Will They Be in the Spring?

Newton, MA.

Reprinted from The KCM Crew

This post refers to the national real estate market, I believe the market here in Newton, Weston, Wellesley, MA. will remain relatively unchanged thru the spring.  If anything I see a slight dip in the 1st Q of 2012

Many sellers want to wait until the spring before putting their home on the market. This might be for any of several reasons:

1. They don’t want to be inconvenienced during the holiday season.
2. They believe that they will see more potential buyers and as a result will get a higher price.
3. In the northern part of the country, they might not want people walking through the snow and then into their house.
4. All of the above

In a normal real estate market, this may make sense. However, this market has been anything but normal. This spring will also see some abnormalities. The biggest difference will be the direction prices will take.

In years past, the spring market would favor the seller because increased demand would outpace any increase in supply: the number of houses coming onto the market would not be as great as the number of buyers newly entering the market. In most situations, when demand is greater than supply, prices increase.

The reason this spring will be different is that the supply of homes coming to the market will be dramatically impacted by foreclosure properties being released by the banks. Many believe this increase in inventory will far outweigh buyer demand. In situations where supply is greater than demand, prices decrease.

Will This Actually Happen?

RealtyTrac, in their latest foreclosure report, explained:

“U.S. foreclosure activity has been mired down  since October of last year, when the robo-signing controversy sparked a flurry  of investigations into lender foreclosure procedures and paperwork. While foreclosure activity in  September and the third quarter continued to register well below levels from a  year ago, there is evidence that this temporary downward trend is about to  change direction, with foreclosure activity slowly beginning to ramp back up.

This will impact prices.

What Do Experts Believe the Impact Will Be?

Here are the pricing projections by several major entities:

• Zillow believes we will not see a bottom in prices until the first quarter of 2012.
• Standard & Poors thinks prices will drop %5 in the next few months.
• JP Morgan Chase believes prices will depreciate 6 to 7% over the next six months.
•  Barclays says prices will fall 7% by the end of the first quarter of 2012.

Bottom Line

You may pay a hefty price for the convenience of not having your property on the market right now.

 

The Real Estate Ship Appears to be Turning!

Newton, MA.  newtonmasshomesforsale.com

The Ship Appears to be Turning

Ken H. Johnson, Ph.D. — Florida International University (FIU) and Editor of the Journal of Housing Research. To view other research from FIU, visit http://realestate.fiu.edu/. D

On October 31, CNN Money reported: “Home prices headed for triple dip”.  Reporting on information provided by Fiserv (a financial analytics company), a 3.6% fall in prices on a national basis is expected by next summer.  This will result in the Case-Shiller Home Price Index falling to 35% below its peak in 2006 and marking a triple dip in U.S. housing markets.[1]

Say it ain’t so!  Is housing set for a third dip in five years?  This depends on factors being in place to lessen the impact from market anxiety brought on by worries over a pending wave of foreclosures and the U.S. debt crisis, which we will start to hear more about shortly.

So, what are these factors and what do they tell us?  These factors are really fundamental drivers that encourage individuals to buy versus rent their personal residences.  They are sometimes referred to as housing affordability measures.  The price to income, mortgage payment to income, and a buy versus rent analysis for various markets provide strong evidence that factors are in place to encourage home ownership or favor renting depending on the resulting measurements.  In ongoing research being performed by Beracha and Johnson, these measures are at record levels in favor of buying.[2]  In fact, the price to income ratios in 23 of the 50 states are at 30-year record lows.  The payment to income ratios are at 30-year record low in all 50 states.  A buy versus rent analysis performed in 23 of the nation’s largest metropolitan areas also indicates that hurdle rates (the rates at which potential buyers are indifferent between buying and renting) in all 23 cities are below 25-year average appreciation rates.  All of these results strongly favor purchasing.

What about per capita income and present day prices (relative to past prices)?  Presently, U.S. per capita income is on the rise again and has regained to the level of 2007 (roughly $40,000 per person), while prices of homes on the other hand rest at 2002 levels according to the Case-Shiller Home Price Index.  What about mortgages rates?  Presently, 30-year fixed rates are at near record low levels.

So, let’s put this all together.  Housing is presently more affordable than at any time in the last 30 years.  While income is only at 2007 levels, home prices are even lower coming in at 2002 levels.  All of these factors set the stage for many individuals to favor purchasing over renting.  Thus, while there are grave concerns over the overall health of the economy, fundamental drivers now appear in place to staunch any further significant plunges in home prices.

The ship appears to be turning.[3]

 

Boston is 4th Worst City to Rent in the Country

Best And Worst Cities For Renters

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Worst Cities, No. 4: Boston, Mass.

Average Monthly Rent: $1,625
Change in Rent year-over-year: 3.6% increase
First Quarter Vacancy Rate: 4.6%
Mortgage Payment v. Rent Payment: $598 cheaper to rent

 

6 Extreme Personality Types You’ll See At Open Houses

Newton, Mass Homes for Sale

Mood of the Market

BY TARA-NICHOLLE NELSON, MONDAY, OCTOBER 24, 2011.

Inman News™

<img title="Vaclav Volrab/Shutterstock" src="http://www.inman.com/files/imagecache/article-photo/files/imagefield/shutterstock_55065373.jpg&quot; alt="Vaclav Volrab/Shutterstock” />Vaclav Volrab/Shutterstock

From the profane, underhanded real estate agents of “Glengarry Glen Ross” (intensely depicted by an ensemble cast including Jack Lemmon, Al Pacino, Kevin Spacey, Alan Arkin and Alec Baldwin), to the affirmation-chanting agent portrayed by Annette Bening in “American Beauty” and Rodney Dangerfield‘s embezzling mortgage broker in the Richard Pryor film “Moving” — fiction has long seemed engrossed with extreme exaggerations of real estate pro stereotypes.

What these writers don’t seem to recognize is that there are “types” of real estate consumers, too; and nothing brings the most extreme consumer types out of the woodwork than a good old-fashioned open house. Here are a few you might see, if you decide to venture out this weekend:

1. The Voyeur. The Voyeur is the neighbor, from next door or around the corner, who has come by for strictly lookie-loo purposes. Once upon a time, Voyeurs primarily stopped at open houses to check out the neighbor’s decor or landscaping — or to snoop in their drawers. Given the turn the market has taken, though, many Voyeurs hope to keep track of how property values in the area are trending, in part, through their open-house visits — it’s the best way to track what kind of property sells for what kind of price.

2. The Poser. The Poser is the seller who lets the agent in, bids the agent adieu, and then comes back an hour later with a backpack and baseball cap on, posing as a visitor — almost always to the agent’s total and complete horror and surprise. Posers thinks that no one can show their house like they can show their house, so they walk around chatting other, real prospective buyers up, casually commenting on the amazing drapery (“wow — that looks custom!”) or the wide variety of fruit trees in the backyard (“plums, peaches and lemons — it’d be like having your own private orchard — and what a great price”).

3. The Lure. I once went to a public open house (i.e., not a broker’s open house) in a decidedly non-luxe home, where the postage stamp-sized urban backyard had been turned into a scene from the South of France, complete with an entire crew of individuals who qualified as Lures — including waitstaff members busily passing heavy hors d’oeuvres and espresso-pulling baristas. Word on the street is that Thai-massage practitioners and Botox doctors are among the next-gen open house Lures now being used to attract agents who represent prospective buyers into open houses.

4. The Crack Negotiator. The crack negotiator is usually a relatively serious buyer who thinks, bizarrely, that they’re going to go the process 100 percent DIY (do-it-yourself) and that they have the skills to cut a crazy good deal by making an insanely lowball offer — during the actual open house. Not deterred in the least by the facts that the seller is not there, that the listing agent’s junior assistant is actually holding the place open or that they should actually be making this offer via a proposed contract, Crack Negotiators think if they make enough 40 percent-off offers by scrawling a number on a napkin at the kitchen table, someone is bound to take it in this market.

5. The Amateur Inspector. By contrast with the Crack Negotiators, most of whom lose their screwball tactics after a couple of dozen rejections and then move on to successfully purchase a home, the Amateur Inspector is typically a lookie-loo type or real estate hobbyist posing as a serious buyer. Amateur Inspectors think they’ll impress someone with the extent of their knowledge (acquired almost entirely by watching Bob Vila on vintage “This Old House” episodes), and aim to win admirers by mildly stalking true prospective buyers and agent attendees around, pointing out every wall crack, faucet drip and floor slope in the place.

6. The Besotted Buyer. Besotted Buyers saw the listing come online, have driven by 12 or 13 times in advance of the open house, and have bitten their fingernails the whole four days between the time the listing was published and the first open house. They come, they see and they just know — this house is “The One.” But sometimes, in their possessiveness about the property, they begin to act out, coming back to the open house over and over, even trying to nonchalantly discourage other attendees about the property, suggesting it is overpriced and making a big to-do of the few flaws they can find.

The economy has created some extremes in the housing market, and open houses seem to bring out those with extreme personalities who love to look at and shop for real estate. The upside? These folks transform open-house hunting into a spectator sport — not just for home viewing, but for people-watching as well. Have fun!

 

For Sale 240 Otis St, West Newton, MA $3,795,000

Newton, MA.  real estate  Top Agent Newton, MA

 

Simply amazing!  Beautifully renovated Georgian Colonial on West Newton Hill.  Outstanding yard with a restored carriage house.

By Appointment only 617-921-6860

 

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For Sale 44 Buswell Park, Newton, MA

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