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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.

Real Estate Negotiating Tips


Newton Mass Homes for Sale

1. Go first. Many people hate to be first to toss out a figure because they think they might miss out on an opportunity. (”If I offer $10k and he would have been happy with $5k I’ll spend a lot more than I have to.”) Occasionally that might happen, but it makes more sense to go into a negotiation assuming the other party is smart and has a reasonable sense of the value of whatever they want to buy or sell. Making the first offer lets you set the “anchor” for negotiations to follow. Studies like this one show that when a seller makes the first offer the final price is typically higher than if the buyer made the first offer. Why? The buyer’s first offer will always be low, which sets a lower anchor. In negotiations, anchors matter.

2. Be quiet. When we’re nervous we tend to talk a lot and therefore miss a lot. Let silence be your friend. If you make an offer and the seller says, “No way,” don’t respond immediately. To fill the silence the seller will give reasons why your offer is too low… and in the process may give you information you wouldn’t have received otherwise. Stay relatively quiet, listen, and when you do speak, ask open-ended questions. You can’t meet in the middle (or, hopefully well to your side of the middle) unless you know what the other party really needs. Give them time to tell you.

3. Know what you want. You should always know what you need — and what you’re willing to spend or pay. If you don’t have a clue about the cost of a particular service, don’t expect the other party to educate you; that puts even the most ethical person in an awkward position. At the least have a sense of the market price for the product or service you want to purchase. Then you can adjust your offer based on the quality and quantity you will actually receive.

4. Assume the best case. High expectations typically lead to high outcomes. Ask for what you want, and go into the negotiation assuming you’ll get it. Why not? You can’t receive if you don’t ask. My wife is the eternal negotiation optimist; she always assumes she can make a deal on her terms. And she almost always does — because she confidently asks for what she wants.

5. Avoid setting ranges. Service buyers often ask for estimates in ranges: “I know you don’t have all the information you need, but based on what I’ve told you, what’s a ballpark figure?” Ranges create anchors too. If you don’t have enough information to provide a solid estimate, don’t. And never say, “Well, somewhere between $10k and $20k…” because the buyer will naturally want the final cost to be as close to $10k as possible, even if what you’re asked to provide should cost well over $20k.

6. Only make concessions for a reason. Say a buyer asks you to cut your price, saying, “All I can afford is $500.” Make sure you get something in return. Say, “For $500 I can do X and Y,” and take Z off the table. Every concession should involve a trade-off of some kind; otherwise your price was simply too high to begin with. Use the same logic if you’re buying; the classic home negotiation move is to ask for, say, all the appliances and fixtures when you counter at a higher number. Always ask for something in return, and don’t be afraid to ask for things you don’t really want early on so you have items you’ll be happy to take back off the table later.

7. Never be Harry Truman. Truman kept a sign that said “The buck stops here” on his desk to remind him that his was usually the final decision. In negotiations it’s tempting to say you have the final word and ultimate authority (especially if that’s true.) Don’t. To avoid getting cornered or pressured, always have a reason to step away and get the okay from another person, even if that other person is you.

8. Make time your friend. Never, ever rush. Never see a negotiation as something to wrap up as soon as possible. A negotiation is an investment in time, and most people don’t want to lose their investments, so the more time the other person has in a deal the more they’ll want to close the deal — and the more they will voluntarily give up in order to get you to say yes.

9. Ignore face value. Negotiating is a little like being on Survivor; in the spirit of the “game,” many people feel it’s okay to be less than forthcoming or honest. Don’t assume everything you hear is true. Statements like, “I can’t go a penny lower,” are more likely to be negotiating tactics than truths. Listen, but toss a few grains of salt onto what you hear. Look closely for what lies under the posturing and positioning.

10. Give the other person room. People get defensive or attack when they feel trapped, and neither helps a negotiation move forward. Push too hard and take away every option and the other party may have no choice but to walk away. You don’t want that, because you should…

11. Forget about winning and losing. Negotiating can feel like a game but it’s not. No one should win or lose. The best negotiations leave both parties feeling they received something of value. That’s how you want a negotiation to end up, because a negotiation should…

12. Create a relationship. Take, but don’t take too much. Give. but don’t give too much. Establishing a long-term business relationship should always be your goal.

And when you’ve finalized the deal, say thanks — and mean it.