Housing markets close to Boston received the biggest boost in home prices from the federal tax credits and low mortgage rates that buyers enjoyed in the first half of 2010.
A report released on Tuesday by The Warren Group of county-by-county median home prices for the first half of the year shows that Boston Suburbs generally saw the biggest increase in median prices from 2009.
With the exception of the tiny Dukes County market, which largely consists of second homes on Martha’s Vineyard, Norfolk County was the strongest market in Southeastern Massachusetts.
Norfolk County’s median price for a single-family home in the first six months of 2010 rose by 9.3 percent to $375,000. Meanwhile, the median price for single-family homes during the six-month period rose by 2.3 percent to $270,000 in Plymouth County and by 5.7 percent to $322,250 in Barnstable County, compared with the first half of 2009. Bristol County’s median price fell by 2.1 percent, to $235,000.
Suffolk County, which is mainly the city of Boston, enjoyed the second-best median price increase for single-family homes of any county: a 12.3 percent rise to $330,000. That contrasts to a statewide median price increase of 7 percent during the first half of 2010.
In general, strong single-family home sales continued through June, with home sales rising by more than 28 percent compared with June 2009. Home sales rose by a similar amount over the first six months of 2010.
Much of the sales activity could be attributed to the first-time home buyer tax credit of $8,000. Buyers needed to have a signed purchase-and-sale agreement by the end of April to take advantage of the federal credit. Most of those home sales closed by the end of June, and were reflected in June sales figures.
Early signals show that the market has softened somewhat since the April deadline, with sales agreements declining in May and June compared with the same months last year.
However, real estate agents said home values have stabilized. While they don’t expect the trend of 7 percent, year-over-year increases seen in the first half of 2010 to continue, agents said they don’t expect much of a decline, either.
That’s partly because interest rates are still near historic lowsnot seen in more than a generation: Many lenders are offering 30-year fixed mortgages with interest rates between 4.5 percent and 5 percent.
Right now the press is speaking to the slowdown in the economy that started in June. Greenspan mentions it in his video in one of my recent posts, Greenspan Talks The Economy And The Markets. Of course we will have to wait and see what shapes up for the second half of 2010 but the markets, both Stocks and Real Estate slow downevery summer. The second half of 2010 will have to do its own talking.
Written By RE/MAX Accredited Buyers Agent Jeff Persons – 617.512.3443
I love LINK Network graphs because they plainly displayhow Boston Homes have been a recession-proof investment this decade. Let me add the caveat that although Boston Real Estate has been an exceptional investment for the last ten years, a prolonged downturn will make everything cheaper sooner or later. I’m bullish to a fault sometimes and I have to remind myself to be rigorous. All we have is the past to use as a pointer to what might go on. I remember 1986 to 1996, a decade where no one I knew made any price appreciation on their homes. Not one penny. Then comes 1996 to 2006 and that decade everyone got a double, triple, and even a few quadruples to the fair market value of their properties. No one that I know of predicted either decade. It is a market after all, win or lose.
Boston Homes Citywide
CitywideBoston HomesTen Year Price Index (Appreciation Rate)
This isn’t much more than a graphic history lesson. It tells us that these neighborhoods have done really well for the last ten years. Will the trend continue or fall off? I absolutely do not know. I have some opinions but that’s what they are opinions and conjecture.
Written By RE/MAX Destiny Accredited Buyers Agent Jeff Persons – 617-512-3443
Working with FSBOs ( For Sale By Owner) may be OK in Phoenix or Arkansas or Atlanta but here in Boston you are really asking for trouble if you work with a FSBO.
Of course we can understand why someone would want to sell their own home. Sometimes it means the seller can walk out of the closing without owing any money. No seller wants to write a check to the bank at a closing. Although this is great for the seller, for us its buyer beware on steroids. There are things that can go wrong without a Sellers Agent and a Buyers Agent involved.
The first thing that comes to mind is that often a seller will go FSBO, not just to save money but also to HIDE shortcomings with the property that if he told the listing agent, the listing agent would have to tell everyone and the seller knows this. Full disclosure is practiced by all real estate agents who want to keep their license. The Sellers Agent has his license at risk. So right out of the gate in a cooperative fashion you are helping the seller save money but you are sacrificing one of your protections. Even if the seller tries to hide the defect, most Sellers Agents will figure it out and that’s just embarrassing! So if he changes his mind and wants a Sellers Agent that defect he was hoping you wouldn’t see is disclosed right up front.
The second point is that if the seller is too stingy to pay the 5 percent for a Sellers Agent, that leaves you unrepresented because 2.5 percent of that is supposed to pay for your Buyers Agent. So now you are thinking about how to eliminate the Buyers Agent and there is exponentially greater potential for serious problems.
For Sale By Owner is more feasible but NEVER advisable in other locations around the country because the properties themselves are simpler, newer and the money they can cost you in your first 5 years of ownership is less. Four out of five available properties in Boston are condos. These condos were carved out of 1880s brownstones and no two are alike. So the buildings are 130 to 160 years old in Back Bay, Beacon Hill, South End, The Fenway as well as Brookline MA. A lot can go wrong with these buildings, which creates more risk here in Boston. There are so many places to hide defects that no one will catch them all.
Years Ago, I bought a condo on Commonwealth Ave. Six months later I got a bill for $8,000 for a new roof in my mail box. Next they wanted $16,000 for new elevators, this all in my first 2 years of owning the home. I was in a different business then and I didn’t know anything about real estate. I worked directly with the listing agent and really shot myself in the foot with that place. If I had had a Buyers Agent, he would have investigated for me. I was so naive, not knowing how much money I could lose.
Your home inspector will find out what to him are obvious defects and that’s a great help. But even he can’t see through walls like Superman. Also you will want a good real estate lawyer experienced in inner city condos. She will read the 3 inch stack of condominium documents that have accumulated on the condo since as far back as 1958. Its great and absolutely necessary to have these professionals but they are not enough. Without representation by a Buyers Agent, no one is watching your back.
The FSBO Saves Money, You Get Screwed!
If you deal with a FSBO, you are expected to take what the seller tells you as bible. Now how rigorous is that supposed to be? And don’t let the FSBO seller tell you they will charge you less because they don’t have to pay the 5% because that’s just not true. Any money he saves will go directly into his pocket while he blows sunshine you know where. With a little fuzzy math he will try to convince you of the savings. The reality is you will pay the same money as everyone else, except everyone else will have representation!
Another Example
Once I agreed to show a FSBO because my buyer wanted to see it and after a phone call to the FSBO, found out that the seller would pay me the 2.5 percent fee for my Buyers Agency. The unit looked great and the numbers worked in terms of fair market value. I was a little curious about the real estate across the street as it seemed to have fallen into disuse. After a little digging I found out that they were talking about a new 6 story building there.
For My Buyer It Would Have Meant Two or Three years of Construction Going on Right Across The Street
Legally the FSBO didn’t have to tell usthat because the plans were not final yet and he didn’t tell us. We had to find out for ourselves. I saved my buyer from living at a construction site for years to come. What would have happened if my buyer hadn’t had me there? If the FSBO wised up and got a Sellers Agent, the Sellers Agent would be telling everyone about the proposed construction as they walked through the door and expressed any interest. The FSBO knew he would, that’s one more reason to not hire the Sellers Agent.
My advice is if you see a FSBO, cross to the other side of the street and walk the other way. He is out to save money at your expense and your anguish! There should be a Buyers Agent and a Sellers Agent involved in every real estate transaction.
Written by RE/MAX Destiny Accredited Buyers Agent Jeff Persons
Here comes my favorite money guy Alan Greenspan. For 18 years as Fed Chairman, Greenspan guided the economy in our country as well as guiding market participants to realize the emergence of the “World Economy”. I was trading stocks for many of those years and I watched as he made the right moves with the prime rate, deftly balancing growth against inflation. His intuition about the GDP, growth and interest rates was so keen that he could keep us in that sweet spot of inflation free growth. He was so good at playing the market like a musical instrument he earned the nickname Maestro.
I like what he says in this interview, not just because he agrees with me but he has a track record that is impeccable. Alan Greenspan is one of my heroes. He is also very modest, unassuming, brilliant man as well as a great American. He discusses many of the subjects that I discuss in this blog like “What is the Stock Market Telling Us About the Real Estate Market?” as well as many other articles about Boston real estate.
On CNBC the reporters run out of synonyms for an optimisticoutlook as you can imagine. So I get to use the word sanguine (cheerfully optimistic, hopeful, or confident: a sanguine disposition; sanguine expectations.) As in Alan Greenspan is definitely running his usual balance between being sanguine about the recovery and cautiously warning of excesses in the markets that could stall the recovery. Greenspan is humble enough to admit that he does not fully understand why we just went through the worst global financial crisis in history. The video is kind of long but if you listen carefully… well, lets just say I am more sanguine about the recovery myself after listening. Hey, I got to use sanguine thrice! I hope this doesn’t sound pretentious, I just love playing with words. And I self publish so I can say what I want. I love it!
Related Articles by RE/MAX Destiny Accredited Buyers Agent Jeff Persons:
I have been saying on this blog that we are at the end on a consumer led recession.
Here are 45 business people who agree with me enough to start a retail location in Bostons Back Bay.
On Thursday, July 8, Mayor Menino and BRA Director John Palmieri welcomed 45 new retail businesses to the Back Bay. Thirty of the new retailers have opened since last July when the Mayor hosted a walking tour of Back Bay retail opportunities. The other 15 retailers have signed leases or are currently under construction and will open soon. All together, it is estimated that the businesses have created more than 500 jobs. The majority of the companies are located on Newbury Street, with others located on Boylston Street, Dartmouth Street and Massachusetts Avenue.
Retailers that have opened since July of 2009
Boloco 1080 BoylstonBack Back Social Club 867 Boylston St. Iris Gallery 129 Newbury Street Jonathan Adler 129 Newbury Street Hotel Chocolat 141A Newbury Street Annabel Jones 144 Newbury Street Ben Sherman 154 Newbury Street S. Kuhlman 160 Newbury Street Joe’s American Bar & Grill 181 Newbury Street Ted Baker 201 Newbury Street L’Atitude Gallery 211 Newbury Street Warlox Wireless 217 Newbury Street Piattini Café 226 Newbury Street Mumbia Chopstix 254 Newbury Street Pazzo Restaurant 269 Newbury Street Sugar Heaven 669 Boylston Street Cotelac 168 Newbury Street Raven Bookstore 263 Newbury Street Second Time Around 324 Newbury Street All Saints 122 Newbury Street Brooklyn Industries 337 Newbury Street b. good 137 Mass Ave Basiques 172 Newbury Street Sweet 225 Newbury Street Pavement Café 1096 Boylston Street Rescue 244 Newbury Street G2O 276-278 Newbury Street KitchenWares 215 Newbury Street Victoria Munroe Fine Arts 161 Newbury Street Lisa’s Nails 170 Newbury Street Vizi 230 Newbury Street
Retailers who have signed a lease or are under construction since July 2009
Back Back Social Club 867 Boylston St. Converse 348 Newbury St Diane Von Furstenberg 73 Newbury St. Forever 21 341 Newbury Street Ibex 303 Newbury Levi’s 131 Newbury Street Max Brenner 745 Boylston St. Met Bar & Grill 277 Darmouth Street Towne Stove & Spirits 900 Boylston Street Vera Wang Bridal 253 Newbury St. Jack Wills 179 Newbury Street The Fish and Bone 217 Newbury Deux Avenue 61 Mass Ave Boloco 569 Boylston Street Audreys Supplies & Services 217 Newbury Street
