Holiday Shopping: Boston Real Estate

November 13, 2012 By Leave a Comment

One of the best examples of a self-fulfilling prophecy is in the seasonality of the Boston real estate market. Every year, as Thanksgiving approaches, home sellers ask me, “Does it make sense to put the home on market now? There are no buyers looking.”

From potential home buyers I hear, “ Should we wait until Spring to buy? There are no homes on the market now.”

Yet, despite the expectations for a quiet holiday season, almost every year I am on the phone putting together a deal while checking-up on my stuffed Tofurky. This year the real estate market seasonality will be less pronounced than ever.

Both buyers and sellers will find advantages of pursuing their real estate goals during the holiday season.

Home Seller Advantages to Holiday Home Selling

Low Competition: Inventory shortage is what characterized our Boston real estate market the past few months. Newton, Brookline, Cambridge, Arlington and Brighton have all had too few homes for sale to satisfy demand, leaving many buyers still looking.

My friend Marilyn Messenger wrote a great article, The 5 Reasons the Sell Your House Now! She outlines the benefits of selling your home during the holiday season. One of the top reasons is the lower competition as many home sellers decide to wait or take their home off market for the holidays.

Serious Buyers: Marilyn also reminds us the buyers coming through a home between Thanksgiving and New Years’ are serious. These are determined buyers, who are not going out in harsh weather during overscheduled holidays to look at a home for kicks.

This year, home sellers can expect buyers who are eager, ready to buy after losing out on multiple offer situations in September and October.

Holiday Home Buyer Advantages

Fewer Buyers Looking: The worry of fewer homes on market is balanced by many buyers exiting the market and new ones waiting until 2013. Fewer buyers translate into fewer multiple-offer situations, and home sellers who are more likely to entertain your offer and work with you.

Shorter Mortgage Queue: Underwriting mortgages is taking weeks if you get stuck with the wrong bank, and closing delays are common. Much of the refinancing business will waiting until January, leaving your attorney with more time to work for you.

Homes are Ready to Sell: There will be two types of properties on the market. First, the “leftovers” from the busy fall market. These homes haven’t sold because of poor marketing or they were overpriced at critical moments. Neither of these reasons reflects poorly on the houses, but gives you an opportunity to negotiate.

There will also be new listings. Savvy home sellers want to take advantage of the low inventory and serious buyers. It’s a perfect time to match home buyers and home sellers who are ready to move on.

My advice to my clients has been and always will be to first work around your own schedule. You never know if your ideal home buyer / home seller has plans matching yours. Real estate surprises us regularly, as not everyone conforms to the same self-fulfilling prophecy, and not everyone celebrates the same holiday season.

(Coming in July 2013, an article entitled, “Boston Realtors Gone to Cape. Please Resume Your Real Estate Activity After Labor Day.”)

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Newton Houses in High Demand, But Are You Positioning Your Home Correctly?

November 8, 2012 By Leave a Comment

Newton real estate is in high demand and in analyzing the market for Newton houses; you find almost across the board, the market is favoring sellers. Inventory of houses on market in Newton is just meeting demand or falling shy of it in some price ranges.

The price range with most pressure is the $800,000-$899,999 price range in Newton, with only one month of inventory. Houses in this price range are sitting the least time on the market at only 51 days.

Alternatively, luxury Newton homes priced $3,000,000-$3,999,999 have 16 months of supply. This means the sellers can expect their house to sell in 16 months, even if their home is the best of the lot.

What does this mean to you if you are selling your house in Newton?

First, you can use this information to set expectations on roughly how long it will take to sell your home. The months of supply tell you if you have a lot or little competition in relation to the demand in recent months. Many people thing the average days on market is the best indication for how long it will take for a home to sell. But average days on market don’t always go hand in hand with months of supply.

Second, if you plan to price your home near the top or bottom of a price range, it may make sense to price higher or lower just a bit. For example, if you plan to price your Newton home just over $900,000, it may be worth to price your home at $899,999 where you’ll have less competition and more buyers.

No matter where your home is priced, and regardless of competition, there is a guaranteed way to a quicker and easier home sale. To beat the competition you must offer the best value in the price range. This doesn’t mean you should have the biggest, newest, prettiest house, but the one offering the most solutions for buyers for every dollar they spend.

Next, the house needs to be marketed correctly, online exposure being the single most important element of property marketing. Regardless of the low inventory and high demand, to attract a better buyer faster who’d pay top dollar for your home, your house must stand out in the crowd of 152 Newton houses.

A home priced correctly and marketed properly, should be the first one sold in the price range, within the period of months of supply. Newton houses may be a hot commodity in most price ranges, but there are still houses lingering on market for months without an offer. Don’t be the home seller of such a house.

Search Newton Houses

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Brighton Condo: New Listing at 137 Englewood Ave

September 30, 2012 By Leave a Comment

Pre-war architecture associated with ornamental details, high ceilings and thick walls. Cleveland Circle is known for pre-war low rise brick buildings, built in the 1920-1930′s. And even though the buildings always catered to modest (1-2 bedroom) households, you can still find period charm in these solid homes.

Now available is 137 Englewood Ave, Unit 25. Enter into a spacious foyer where you will immediately see the condo’s high ceilings and arabesque passages. The one bedroom home has a large living room and a eat-in-kitchen. The hardwood floors are in wonderful condition. Overlooking the landscaped courtyard, you’ll love peaceful atmosphere just a couple minutes walk walk from the B, C, D lines.

Englewood Heights is a complex of three buildings in the heart of Cleveland Circle. It has the characteristics you would expect from a high owner occupancy building: tidy hallways and excellent condition. With an elevator and laundry, this is one of the most sought after buildings in Clevleand Circle.

This condo is now available, debuting on MLS on Thursday 10/4. First open house will be Sunday, 10/7. But you can schedule your showing before the big rush. Price is $229,900. Visit the property website at http://137englewoodave25.canbyours.com/

Schedule a Showing for a Listing

Beat the crowd of home buyers by scheduling your showing now. *YOUR INFORMATION IS CONFIDENTIAL AND WILL NOT BE SHARED WITH OR SOLD TO ANYONE, EVER!*
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West Roxbury Homes Selling Fast

August 1, 2012 By Leave a Comment

After a bit of a sleepy tour of some Brookline condos on Sunday afternoon, I headed to West Roxbury, where every house I visited was jam-packed. It was a frenzy, with multiple offers on several properties. Buyers grabbed homes on first open houses, as the number of colonials on pretty streets is too few to satisfy the market.

Expect a lively Fall market as West Roxbury homes for sale are in high demand. Between the proximity to the City, the peace and quiet, and the aesthetics of the neighborhood, I’m not surprised.

Last year, between May - July, average market time was 80 days, down to 68 Spring of 2012. The average price is about the same as last year. What I find interesting is how many fewer price reductions we have. May - July of 2011 had 68 listings reduce their price by at least once. In the same period this year we saw 54 listings reducing price, and those reductions where smaller. That’s a 20% drop in the number of listings reducing their prices. Either the sellers are pricing their homes better, or the buyers are negotiating less. Perhaps a combination of both.

In the chart below you’ll see the number of sold and pending sales for the past 26 months in West Roxbury. Notice the huge jump in pending transactions. These will close in the coming weeks. This jump in transactions is a testament to the importance to anecdotal evidence from your well informed agent. Pending sales do not show up in the sales statistics, but they are the best gauge of current marketing conditions.

Search West Roxbury Homes for Sale

 

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Boston Next Real Estate Bubble? More Fluff from the Globe

July 16, 2012 By Leave a Comment

Last week the Boston Globe’s real estate blog called Boston Real Estate Now published a post called, “The Next Housing Bubble?” This small piece is jam-packed full of nonsense, misleading information and irresponsible journalism.

The first problem with this post is the title, “The Next Housing Bubble?” Bubbles are a conclusion made in hindsight, and make no sense in predictions as we crawl our way out of a slump. This whole post was based on JP Morgan’s prediction of a 12% jump in home prices over the next four years as reported in Housing Wire. A 12% increase in home prices over four years hardly makes for a bubble. So why call it that?

Next, the article continues to claim the Boston area as a “one of the most bubble prone metro markets in the country.” Although I agree with the assertion of lack of inventory and new construction, lack of housing is not what creates real estate bubbles. Shortages and scarcity lead to organic price increases, not bubbles. Bubbles are full of air – not continuous real demand!

Of course the demand for housing has its ebbs and flows. Prices went down in Boston but most of our neighborhoods did not suffer the economic blow of Cities where housing and new construction is abundant, like Miami and Phoenix. Those cities had new construction condo buildings with less than 30% occupancy and price falling 50-60%.

Another quote that is the mark of irresponsible journalism, “Of course, a 12 percent jump nationally translates into a 20 percent jump in Greater Boston.” If this is true, please provide historical evidence of Boston’s real estate outpacing national real estate markets. It didn’t outpace the last “bubble” (if you believe we had one).

My next bone to pick is with the value of data the Globe uses. The Globe’s purpose, I thought, is to inform the local readers. There is no way national real estate headlines inform the local buyer or seller or provides a basis for decision making. Furthermore, the Globe’s stretching this national prediction to apply to Boston’s market adds to confusion and nonsense.

National real estate numbers, regardless of integrity of source, are totally and completely meaningless to you, dear friend. Real estate only matters on the local levels – your street, your neighborhood, maybe your town. If you want to learn about your local Boston area market, Boston Real Estate Now is proving to be an unreliable source.

Lastly, the author discounts the only piece of valuable information. “The bank (JP Morgan) predicts 2.5 million problem loans will get bailed out this year through foreclosure rescue programs - sounds like wishful Wall Street thinking to me.”

The big bank is in a pretty good position to report accurately if they believe it is likely they are to have a deal coming together with the government. This is the only interesting information I find in the report. The Globe calling it wishful thinking shows a lack of thoughtfulness going into the post.

Do you like keeping up with your local real estate market? I’ve got the perfect thing for you! Learn about my Local Housing Data Newsletter. It’s reliable, timely, and free. Now you can be the expert…click here.

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The #1 Deal Killer for Newton and Brookline Houses

July 2, 2012 By Leave a Comment

Last Spring market, which ended roughly a week ago, looked something like this: buyers want to buy, sellers unsure they want to sell, plenty multiple-offer situations and many deals falling apart mid-way to closing. This is the nature of a market with rising prices.

Homeowners, believing prices will rise, stay on the sidelines and don’t feel a need to sell their homes. On the flip side, there are not enough homes on the market to satisfy all the buyers, who are bidding up the prices of homes.

But many of the home sale transactions don’t make it to closing, or at least not without some disappointments and fighting. The dreaded appraisal is the culprit!

The appraisal is a third party evaluation of the home which the bank requires for a mortgage approval. An appraiser comes to the home and compares it to recent sales. In our market, the appraiser has a difficult job because there may not be enough recent sales of similar properties, and the price buyers are willing to pay is higher than it was just a few months ago.

Because of the formulas, regulations and rules the appraisers must follow; their evaluation is often coming short of the offer price, which the buyer and seller already agreed upon. What does this mean? Here’s an example:

Four offers are submitted on a house in Newton, and the best offer was accepted at $800,000. The buyer agrees to pay a 30% down payment, $240,000 and submits a mortgage application for a 70% loan, $560,000.

The appraiser uses the limited recent sales data for similar houses nearby, and comes up with an appraised value of $750,000. The mortgage company will still fund 70% of the appraised value, but now this number dropped to $525,000.

Once of several things may happen next:

  • The buyer may demand the price reduced to the appraised value. Why should he pay more than that?
  • The buyer can make up the difference in cash.
  • The buyer and seller can negotiate a price between the $800,000 and $750,000. The buyer will pay cash for anything over $750,000.
  • The buyer and seller may terminate the agreement, (if there is an appraisal contingency in the agreement, which I’ll discuss in another posting).

Whatever the decision, it is never a romantic time during a real estate transaction process. Both parties are usually upset – buyer fearing he is over paying and dreading the added cash expenditure and seller annoyed she is making less than expected. This is especially disappointing when there were several offers, four buyers is willing to pay more than the appraised value!

Five years ago appraisals were rarely a problem. But are and will continue to be an issue everywhere prices are going up, inventories are low, and buyers are ready, willing and able to buy.

Buyers and sellers must prepare themselves for the appraisal. I’ll discuss that in upcoming posts.

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Brookline Real Estate Update

June 28, 2012 By Leave a Comment

There has been a lot of talk about the shrinking supply of homes in the market. The shift in this critical market condition is nicely shown in the months of supply of Brookline’s single family houses chart. In May 2o11 there was over 10 months of supply - meaning, it would take 10 months to sell all the homes if no new ones came on market. Last May, this number was under 8 months.

Although average house prices in Brookline were down over 9%, the shrinking inventory is a sign of a healthier market. Months of supply tells us how many homes are on market and the level of demand. Lower months of supply is great news if you are planning to sell your home soon. More interested parties, less competition, maybe (MAYBE) higher asking price.

But this information means something else if your house is already on market. If you are currently trying to sell your house in Brookline, the good news is you have less competition and more potential buyers. The bad news is that while all the other homes are selling, yours is still on market. If you home has been on market much more than four months (average market time), it may be time to discuss alternative marketing options or a price adjustment with your listing agent.

 

 

 

 

 

 

 

Brookline single family homes have an average price of $1.3 million. Lower price ranges have sharper drops and much lower inventories. Brookline condos are down to 3.2 months of supply last month. More on that next week.

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Condo or Single Family?

June 17, 2012 By Leave a Comment

Buyers sometimes shun the idea of a condo when they can find a single family in their price range. I can understand that. There are so many advantages to a single family! Privacy, control over the house, your own yard and driveway, etc.

Boston real estate prices are comparatively high. Thus I suggest, for those buyers who are searching in the lower end of the single family housing market, to also look at similarly priced condos.

Here are two West Roxbury homes for sale. Both are great option for anyone looking for a home priced in the $400,000′s. First, it’s the two level condo at 75 Russett Road and the second is a ranch at 8 Cricket Lane. Both are superb locations, have two full baths, and both homes are easy to love. The condo, priced 439K needs no work and has extensive well maintained beautiful wood details. The house, priced 449K is a single level and will need a facelift, especially kitchen and bath.

It’s your choice.

0 Matching Properties

 

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Monthly National Association of Realtors Pending Home Sales Update

June 7, 2012 By Leave a Comment

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Real Estate Decisions: Use Your Head or Your Heart?

May 16, 2012 By Leave a Comment

Last week I had a difficult decision to make. My emotional side had to duke it out with my logical reasoning. I work through head versus heart wars with clients all the time, so this week was an opportunity to observe the decision making process and find ways to optimize difficult choices.

Residential real estate is a fertile ground for difficult decisions that employ both the logical and emotional. So how do we make the best choices when buying a home and who to trust, the head or the heart? The answer is that you’ll have to bring the two to a compromise for the optimal decision.

A purely logical decision

Three years ago I had a house on the market in Newton priced around $780,000. A family came to see this house three times, and obviously loved it. When they were ready to make an offer, the conversation was something like this. “We’ve done the analysis of all the sales in the past six months in the radius of .33 miles. Using a formula taking into account square footage, age of house, etc etc…the house is worth $632,392. Our offer is for $632,500.”

A purely analytical offer misses the variables that are not easily measured, or altogether intangible. This family would have enjoyed this house, it was perfect for them in many ways, and they missed it. The house was sold for $750,000 to another family.

A purely emotional decision

In the height of our condo market, around 2006, I worked with a buyer for only a couple of weeks before she was ready to make an offer on a very pretty one-bedroom in Brookline. “I love it, I love it, I love it.” When buyers don’t take longer to choose a home my reaction is usually, “Are you sure, are you sure, are you SURE?”

My buyer did not want to negotiate; she put in a generous offer, higher than what I had suggested. All my explaining and advising was ignored, and my job was to represent her wishes. Everything went pretty well up until the appraisal. The bank’s appraisal was lower than the price my buyer was willing to pay. This means the bank is not willing to finance the purchase at this price – a big problem.

Did I mention this is the height of the condo market? I wasn’t new to the business but it was the first time I heard of a bank appraisal resulting in a lower price, (a commonplace these days). She was overpaying even in a hot market.

Finding the balance

I believe we naturally find a balance and use both our rational and emotional sides. A good real estate agent ensures this, and will hopefully balance your dominant decision making side. The pros, the cons, the what-if’s, and the numbers. It is a peace process between our heads and hearts because a home is all encompassing.

A house is both a financial investment and a home. You must enjoy the house, find it comfortable, and be happy to enter it after your day at work. But you can’t ignore that it will likely be your largest financial outlay ever.

 

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