CONTINUED HOT BOSTON CONDO MARKET

According to the Multiple Listing Service (MLS), Boston Condo sales continued at a record pace during the first half of the year, with several different neighborhoods taking the lead as sales prices increased. Brighton had the hottest sales in the $236K – $283K range with 44 sales, Jamaica Plain had 42 sales in the  $330K – $380K range, South Boston had 48 sales in the $493K – $580K range, and the South End had 69 sales in the  $740K – $1.125 range. Back Bay recorded 84 sales that exceeded $1.125M in price. fenway1

Many factors were considered however it appears that when buyers cannot find a home in a particular price range, it is not uncommon for the buyer to consider moving up and spending more, even if it’s in a different neighborhood.
Many Boston real estate professionals agree that most buyers will spend more if the buying opportunity is good, no matter what the neighborhood.

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Home Sales Jump to Highest Level Since 2009

Existing home sales rose in May to their highest levels since Nov. of 2009 according to ‘The National Association of Realtors.’ Home prices also continued to rise about 15.4% compared with May of 2012.NAR_logo

Some real estate professionals as well as many economists caution that prices may be rising too fast and only new home construction  will moderate future price growth. Overall, “the housing numbers are overwhelmingly positive,” said Lawrence Yun, NAR’s chief economist.

Home Sales Jump to Highest Level Since 2009

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Financing is on an Upswing

mort1Good news in the real estate market. The Mortgage Bankers Association said Wednesday that the number of mortgage apps that were filed in the United States shot up 14.8% for the week ending March 1, 2013.

The turnaround arrived after three straight weeks of declines. The Apps rose alongside the refinance index, which grew to 15%, and the purchase index which also shot up 15%, showing a strong market demand for all of the refinances  and the home and condo purchases.

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Existing Home Sales continue to Surge

Sales of existing homes continued to rise in November, hitting their highest level in over 3 years. According to NAR (National Association of Realtors) that figure is up 14.5% over same period last year. And this certainly will hold true in the Boston Real Estate market.

Sales were up almost 6% from the previous month of October. The national median home price also jumped up about 10% over last year. Building permits were up almost 27% over the same time last year. Single family home permits rose 25.3% and multi family permits rose over 30% over same period last year.

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Bloomberg News: Housing issues to watch in 2013

Factors:

  • The Shadow Inventory is dwindling. Banks could increase foreclosed property sales where there are big backlogs
  • The Rising Prices could boost demand due to buyers now having a sense of urgency, which has been missing the last few years. Rising rents and rising home prices are beginning to change some attitudes about home purchase.
  • The overall housing inventory will probably hit a bottom. Builders and developers are ramping up new construction and with the prices beginning to rise in some areas, would be sellers are anxious to test the markets waters.
  • Loan underwriting along with credit standards are going to remain tight and the new regulations will help make underwriters more jittery    *Other Factors that can affect the market: Slow job growth, tight credit, elevated foreclosures and the high numbers of underwater homeowners have to be thrown into this mix.
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Area’s Home Prices Rise, Foreclosures Fall


Values in metropolitan Boston advance a fifth consecutive month

The latest measures of the state housing market’s recovery pointed in the right direction Tuesday, with foreclosures declining and home prices rising.

Single-family home values in the Boston area were up 0.7 percent in August, compared with July, marking the fifth consecutive month of increases, according to the S&P/Case-Shiller Home Price Indices. It monitors repeat home sales and is considered by many in the industry to be the best indicator of the nation’s real estate market.

The price improvement locally is in keeping with national numbers reflecting a healthier housing market. Over the last year, Boston-area home prices rose by an average of 1.7 percent, Case-Shiller said. Values increased 2 percent during the same period in the 20 US metro areas the index measures.

David M. Blitzer, chairman of the index committee at S&P Dow Jones Indices, said the strong numbers reflect numerous housing indicators that have all turned positive, including an increase in the number of new single-family houses being built, more home sales, and a drop in mortgage default rates.

“The sustained good news in home prices over the past five months makes us optimistic for continued recovery in the housing market,” Blitzer said, “Foreclosures are returning to what one specialist calls a natural level”.

Foreclosure numbers released Tuesday also provided a boost for the Massachusetts real estate market. Foreclosure petitions, the first step in the home-seizure process, dropped to 973 statewide in September, a 16.4 percent fall from September 2011. It was the first month this year that the number fell below 1,000, according to Warren Group, a Boston company that tracks real estate.

Petitions are still up for the year, however, with 13,429 filed between January and September, an increase of 42.6 percent, compared with 2011.

But fewer people are losing their homes in Boston Massachusetts, Warren Group reported. Foreclosure deeds fell to 510 in September, a 32 percent drop from the same time last year. It was the fourth month in a row of declining deeds, year over year. Between January and September, there were 6,486 foreclosure deeds filed statewide, a 3.5 percent increased compared with the first three quarters of 2011,

Warren Group said.Timothy M. Warren Jr., chief executive of Warren Group, attributed the slowdown in foreclosure activity to a housing market on the rebound and government efforts to help home¬owners.

Warren said past reports have been skewed by the fact that lenders slowed foreclosure activity amid scrutiny of their practices and later increased the rate of seizures to deal with the backlog. But the latest numbers, he said, show genuine improvement.

“Foreclosures are beginning to return to what I would call the natural level,” Warren said, “and the good news is that the numbers are starting to drop.”

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Is Multi-Family Rental Units a Good Investment

Just when it looked like the real estate market was starting to bud out again, it reversed itself and is again struggling to keep it’s head above water.  Widespread foreclosures and continuing unemployment is certainly not helping any. It appears that more and more people are renting which brings up the question: Is multi-family rental units a good investment, especially with the record low interest rates that are available.

The experts are emphasizing some caution if considering rental property investment.
Consider:

  •  Know the area well including the crime stats and other competitive developments that might lure renters. Talk to a Boston Luxe Realtor and do a complete investment analysis before making any commitment to purchase.
  •  Consider multi unit rentals rather than a single family home for rental investments. More than one rent check coming in each month  is better than just a single check because if that one renter is late or the unit is vacant you could be in trouble.
  • Make sure that your rental income is higher that your mortgage payments and other expenses on the property, and try to add a buffer of 15-20% to take care of repairs, vacancies etc.
  • Make sure you have sufficient insurance coverage for tenant damage, repairs, fires, etc. Do not try to get away with no coverage..this is a major mistake many landlords try to get away with.
  • Make sure your rentals are in compliance with local and state laws before renting any units out. Talk to your local Realtor for help with this. (IE: is there lead paint on the walls, any asbestos, or mold?)
  •  Use a lease or rental agreement that is compliant with your state laws. Talk to a Realtor on this, they can be very helpful and they know the real estate laws involving sales and rentals.
  • Get a professional manager or management company to handle the day to day operations of your rentals so you aren’t called in the middle of the night to fix a leaky pipe or toilet or?
  • If possible, join a professional apartment association. There is much support resources available and plenty of advice from local Realtors and builders who also own apartments and other rentals.

Yes owning rentals can be a good thing if you can find the right ones at the right price and then rent the units to the right people.

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Property Sales Up in Massachusetts

July home sales are the best since 2005, up about 27%, according to the Warren Group, publisher of Banker and Tradesman. The Massachusetts Association of Realtors reports similar results.

The increases were similar for the nations real estate sales. The 20 cities tracked by the Case-Shiller index also saw price gains in June over May, with Boston real estate sales posting a 2.5% increase.

Experts cautioned however, that there are enough reasons to be cautious. Fears of a double dip recession haunts some, and the slowness of economic growth bothers other real estate analysts. Nearly 5000 homes changed hands in Massachusetts in July, a far cry from the 6672 homes that sold in July of 2005. The economic situation remains unsettled and could unravel in a matter of months, due to the debt crisis in Europe or a possible global meltdown like that which took place in 2008. There are a series of huge federal budget cuts set to take place next year unless the new president and congress take some action soon. Most experts now think there is a 50%-50% possibility of that happening, which could say bye-bye to a continuing real estate recovery.

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More Evidence of Recovery

According to Barry Bluestone, Director of the Dukakas Center for Urban and Regional Policy at Northeastern University, “We are seeing the real signs of a recovery in the housing market.” He went on to say “the feeling out there is prices are not going to soften anymore.”

Condo values in Boston reached a record high during the second quarter of this year with buyers driving up values while taking advantage of the low mortgage interest rates. The median price in a dozen of the downtown neighborhoods climbed to $515,000 during the three months that ended June 30th. That means that half sold for more than that price and half sold for less.

The previous peak was $498,500 and that was in 2008. The neighborhoods included Beacon Hill, Fenway, North End and South Boston. Acceptance of and the new popularity of urban living coupled with a limited inventory helped contribute to the sales surge.

Many experts contribute the increase in sales to the area and location, with many of the neighborhood locations ideally close to public transportation, the arts and new restaurants.

There is no doubt that many of the condo buyers are younger and more open to being able to walk downtown, to the store, restaurants, and entertainment and still be close to the trains.

Now many buyers are complaining that the inventory just isn’t there and many real estate agents and Realtors are loosing sales because they don’t have what the buyer is looking for.

It looks like the real estate market in Boston is still in for some “trying times” in the near future.

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Home Mortgage Applications Show Increase

A very important gage of home sales across the nation showed an increase in Mortgage Loan Applications. Loan requests for home purchases increased 3.3% in the last week according to the Mortgage Bankers Association. At the same time loan applications for refinance loans were down. The refinance loan applications were down 3.4% for the week ending July 6th.

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