Month: November 2013

When Will Mortgage Rates Hit 5%?


Sotheby‘s Newton, MA.  Sotheby’s Boston

blue interest ratesThe big question for homebuyers is when interest rates will begin to rise to the 5% mark. The effect of a rise in mortgage rates could be a dramatic increase in the monthly mortgage payment when purchasing a home. In an article last week, HousingWire quoted two different sources regarding this issue.

Most experts are projecting that rates will rise when the Fed decides to taper the purchase of bonds which has acted as a stimulus to the housing market by keeping long term mortgage rates at historic lows.

In the article, Sterne Agee’s managing director and chief economist Lindsey Piegza pointed out:

“Federal Reserve officials said they might reduce their monthly bond buying program from $85 billion ‘in coming months’ as the economy continues to improve.”

The article also quotes Frank Nothaft, chief economist with Freddie Mac:

“By the end of 2014, rates will probably approach and perhaps touch 5%. A reason we see the uptick in rates is that I do think some point the Federal Reserve will start to taper and scale back its very active purchase on long-term Treasuries and mortgage-backed securities.”

Rates will hit 5% sometime in 2014. It might be better to buy sooner rather than later.

 

From White Picket to Upcycled Pallet Fences: Millennials and Housing


Newton, MA. Realtor, Newton, MA. home buying and selling, top Newton, MA. agent

I want to share this very interesting article.  I too am concerned that current 20 years olds will not have the financial ability to purchase a home while they are in their thirties.

 

BY JIM HANEY

Millennials Moving InCritiques and defenses about Millennials abound. However, I think an overlooked aspect of the kerfuffle over Generation Y is the question “Why?” Although it is great to spur the generation on to great heights, it is crucial we understand some of the hurdles they are facing, economically and socially in order to anticipate how the market will have to change and adjust to accommodate a new generation’s capabilities and values.

Educational Debt & Credit

No big newsflash here: millennials are facing unprecedented levels of debt, between the various recessions, housing bubbles, and explosion of educational debt. New legislation in the works is attempting to help set up a more stable higher education financing system as well as relieve the staggering debt loads. Although debt forgiveness is the big buzzword these days, most students will still face shouldering a majority of their debt. Fortunately for the economic outlook, the legislation focuses on creating more income-based repayment plans that won’t put millennials on the street. However, the big question that remains is how will this affect their credit?

Public vs. Private Sector

With the specter of the 2008 housing bubble burst looming over everyone’s head, the situation is no longer about whether or not millennials are willing to take on more debt or have the income to cover minimum payments, it is about if lenders are willing to take on the risk. President Obama has rolled out plans that Fannie Mae and Freddie Mac will be gradually diminished, leaving the private sector to provide the backbone of risk management. With first-time buyers being edged out of the market due to new credit requirements, we could see a short-term slowdown in home-buying.

Uncertainty

Surprisingly, the instability recently exhibited by the U.S. government shutdown and continued clamor over the debt ceiling may actually work in the market’s advantage. Millennials, wary of being overly reliant on vacillating government promises, might become increasingly inclined to use their savvy to explore home equity loans and carefully consider newly-revised reverse mortgages as part of their retirement plans. Having front-row seating for the recent economic meltdowns, the newest generation will be more inclined to do their research and not bite off more than they can chew, meaning they might, actually, leave a positive legacy for the housing industry.

American Dream

As the Keeping Current Matters crew mentioned, homeownership is still an important idea to many Americans.  If the government and the private sector work together to slowly adjust the system and increase stability, which is already the direction we are driving in, we can expect to see homeownership continue to increase with this generation.  However, we should expect to hold the memory of Desi and Lucy fondly in our hearts, and leave them there as the face of home buyers will be forever changed.

It is a pervasive misconception that millennials are thoroughly disenchanted with the concept of settling down. The revitalized home-making movement—as evidenced on social media platforms like Pinterest–within more progressive millennial circles would indicate that although it might take a bit longer for the birds to return from their explorations, they will inevitably nest.

Furthermore, the creativity and frugality of Generation Y will provide them fresh incentives to invest in housing as home ownership opens up new avenues hosting friends and international travelers. As this new group of home-buyers realizes that a mortgage doesn’t necessarily clip their wings, we should be able to anticipate a new, stronger, and invigorated market of responsible borrowers. These iPod-wearing, tweeting, bicycle-riding youngsters just might be the market we’ve been looking for.

 

 

Newton Real Estate Inventory Today and a Year Ago


Top Newton Broker  Sotheby’s Real Estate Newton

Here is a glimpse of the real estate market today vs. a year ago.  We have an extreme shortage of homes priced under 1.5 million.  The high-end (above 2.5) is still extremely slow.  Now is the time to sell.  The increase in Average sale price is being driven by homes priced under 1.5 million.  Remember this is a supply and demand business low inventory means higher prices, increasing inventory will lead to stable prices.

Report Run: 11/1/2013 10:13:45 AM
Property Type(s): SF, CC
Snapshot Date: 11/1/2012
Towns: Newton
 11/1/2012  11/1/2013
Price Range Number of
Listings
Avg. Days
on Market
vs. today Number of
Listings
Avg. Days
on Market
Under $50,000
$50,000 – $99,999
$100,000 – $149,999
$150,000 – $199,999
$200,000 – $249,999 3 267 3 133
$250,000 – $299,999 4 169 1 49
$300,000 – $349,999 3 47 3 25
$350,000 – $399,999 14 151 6 22
$400,000 – $449,999 12 71 3 23
$450,000 – $499,999 6 61 10 28
$500,000 – $599,999 13 72 14 30
$600,000 – $699,999 19 95 6 59
$700,000 – $799,999 17 92 5 56
$800,000 – $899,999 10 44 17 43
$900,000 – $999,999 17 82 7 46
$1,000,000 – $1,499,999 35 90 26 82
$1,500,000 – $1,999,999 21 126 27 159
$2,000,000 – $2,499,999 13 158 16 120
$2,500,000 – $2,999,999 5 323 8 91
$3,000,000 – $3,999,999 8 79 9 190
$4,000,000 – $4,999,999 1 892 5 85
$5,000,000 – $9,999,999 1 7
Over $10,000,000
Total Properties 201 Avg. 110 167 Avg. 86
Lowest Price: $215,000
Median Price: $899,000
Highest Price: $4,249,000
Average Price: $1,152,092
Total Market Volume: $231,570,605
Lowest Price: $229,000
Median Price: $1,250,000
Highest Price: $5,000,000
Average Price: $1,507,361
Total Market Volume: $251,729,313

Call Margaret Szerlip 617-921-6860  or e-mail margaretszerlip@gmail.com to find out what your property is worth today.