Pending Home Sales Continue Positive Trend
July 1, 2009 | Filed Under Real Estate News, Real Estate Trends and Statistics | Leave a Comment
The Pending Home Sales Index — a forward-looking indicator based on contracts signed — rose 0.1 percent in May from April, and it was 6.7 percent higher than May 2008, NAR announced this morning. It is the fourth consecutive month that the pending home sales index posted a monthly gain, which NAR attributes to the wide availability of affordable housing and the positive impact of the first-time homebuyer tax credit.
Regionally, the index showed a monthly gain of 3.1 percent in the Northeast and 2.2 percent in the West, but declined 1.3 percent in the Midwest and 1.7 percent in the South. Totals in all four regions topped year-ago numbers. The index increased 6.8 percent in the Northeast, 11.4 percent in the Midwest, 7.9 percent in the South and 0.7 percent in the West.
The Housing Affordability Index (HAI) fell slightly in May from April, when it reached the highest level on record dating back to 1970, but it remains near historic highs, NAR reports. The HAI is a broad measure used to illustrate the relationship between home prices, mortgage interest rates and family income. A family earning the median income of $60,800 could afford a home priced at $296,700 in May with a 20 percent down payment, assuming 25 percent of gross income is devoted to mortgage principal and interest, the study finds.
Pace of Home Price Decline Slows
July 1, 2009 | Filed Under Real Estate Trends and Statistics | Leave a Comment
The pace of decline in U.S. home prices was not as severe in April as it was in March, according to the latest S&P/Case-Shiller Home Price Index, which was released this morning. The index’s 10-city and 20-city composites declined 18.0 percent and 18.1 percent, respectively, in April compared to April 2008. Both indices had reported annual declines of 18.7 percent in March. The pace of declines has been improving since the indices hit record lows in January of 19.4 percent for the 10-city composite and 19.0 percent for the 20-city composite.
Of the 20 cities tracked by the index, 13 posted improvement on their annual return in April compared to March. “While one month’s data cannot determine if a turnaround has begun, it seems that some stabilization may be appearing in some of the regions,” says David M. Blitzer, chairman of the index committee at Standard & Poor’s. “We are entering the seasonally strong period in the housing market, so it will take some time to determine if a recovery is really here.”
The three best-performing metro areas in terms of year-over-year returns were Denver, Dallas and Boston, which posted annual declines of 4.9 percent, 5.0 percent and 7.7 percent, respectively. The worst-performing cities were Phoenix, down 35.3 percent, Las Vegas, down 32.2 percent and San Francisco, down 28.0 percent.
Mass Mortgage Rates Still Highest In Nation
June 30, 2009 | Filed Under Mortgage and Finance | Leave a Comment
Even though the average 30-year mortgage rate in Massachusetts fell to 5.57 percent last week from 5.68 percent the week prior, rates in the Bay State are still the highest in the country, tied with Illinois, according to online mortgage tracker Zillow.
Nationwide, the average 30-year mortgage rate last week was 5.48 percent, down from 5.58 percent the week before.
Georgia had the lowest average rates in the country last week, at 5.42 percent.
Falling Home Prices Hit Wealthy Neighborhoods
June 29, 2009 | Filed Under Boston Real Estate, Real Estate Trends and Statistics | Leave a Comment
Up until recently, home prices in many wealthier neighborhoods continued to hold their own while prices in other locations around the country slumped. But that’s beginning to change. In 2009, home prices in such tony zip codes as Chicago’s Lincoln Park and New York City’s Greenwich Village are on track to fall 15 percent to 25 percent, according to a recent report by Forbes.com.
The lag in falling home prices is due to the relatively low unemployment in these areas, which results in fewer foreclosures that tend to hasten an area’s price declines. But the supply of overpriced, unsold homes in these markets continues to grow, which will accelerate home price declines as homes languish on the market, Forbes concludes.
The Boston Luxury Real Estate market is still very strong, we don’t see price reductions as much as more days on market.
New-home Sales Remain Flat in May
June 29, 2009 | Filed Under Real Estate Trends and Statistics | Leave a Comment
New-home sales remained essentially flat in May at a seasonally adjusted annual rate of 342,000, which is just 0.6 percent below a revised April rate of 344,000, the U.S. Commerce Department reported this morning. But that’s still 32.8 percent below the May 2008 estimate of 509,000.
The median sale price of new homes sold in May was $221,600, a 3.4 percent decline from the estimate of $229,300 reported in the same month last year. An estimated 292,000 new homes were for sale at the end of May, which represents a 10.2-month supply at the current sales rate.
Regionally, the Northeast and Midwest posted strong month-over-month sales gains in May of 28.6 percent and 18.6 percent, respectively. May sales rose 1.3 percent in the West and fell 8.5 percent in the South. But all four regions posted significant year-over-year sales declines: 12.9 percent in the Northeast; 31.0 percent in the West; 32.0 percent in the Midwest; and 35.9 percent in the South
Report: Where Will Housing Be in 2012?
June 29, 2009 | Filed Under Real Estate News, Real Estate Trends and Statistics | Leave a Comment
According to a special housing report in Business Week, home prices will continue to fall this year, and then they will stabilize before rebounding in 2012 as the nation’s economy recovers. The report, Where Will Housing Be in 2012?, also highlights seven local markets: Boston, Mass; Omaha, Neb.; Seattle; Nashville, Tenn., Saratoga, N.Y.; Salt Lake City; Austin, Texas; and Merced, Calif.
1850 Auction sells all 35 units
June 29, 2009 | Filed Under Boston Lofts, Foreclosure, Real Estate News, Uncategorized | Leave a Comment
The auction was lots of fun to watch and i wasn’t surprised to see all 35 units sell. I suspected to see the units sell for about 75% of asking and i was almost right. The average went from 61% all the way up to almost 80% of asking with the majority of units selling for around 74% of asking price. Many of the smaller sized units around 700sqft had the lowest priced bids starting at $175k and they went for the closest to asking.
What surprised me the most was the sale of unit 508, my personal favorite, at only $361k. This unit was a corner with city and highway views it had a large brick area for a bedroom and another nook for a second bedroom. The unit had 1,058 sqft with an origional listing priace at $585k, that means it sold for 61% of the asking price. It was good to see over 300 people came out for the auction and there was alot of competition between bidders. 35 lucky buyers along with their friends and family went home happy that night and a lot more went home disappointed. Don’t worry though there are more deals to come this year and next. If anybody wants a complete list of all the sales prices please let me know.
Boston made it to Forbes Magazine’s top 10 cites
June 26, 2009 | Filed Under Boston Real Estate | Leave a Comment
Where are the best cities to live in the United States if you want to work hard and get ahead?
Forbes magazine examined the nation’s 40 largest metropolitan statistical areas and based on the number of Forbes’ 400 best big companies and 200 best small companies that are headquartered in each, it identified what it considered places with the most opportunity.
The magazine says it took this route because the best big companies provide opportunities for those who seek to be employees, and the rate of success of small businesses indicates how the area treats entrepreneurs.
Here are the top 10:
1. Houston
2. Dallas
3. Minneapolis
4. Pittsburgh
5. Boston
6. Washington, D.C.
7. Austin
8. St. Louis
9. Kansas City, Mo.
10. New York
Breaking News: Home Buyer Tax Credit Could Expand
June 26, 2009 | Filed Under Real Estate News | 1 Comment
A first-time home buyer tax credit of up to $8,000 has helped to move housing inventory during an otherwise sluggish real estate cycle. Now both legislators and the business community are hoping to build on the incentive’s success by expanding it.
A number of bills have been introduced in the House and the Senate that lobby for an expansion of the measure. Among the proposed changes:
- Setting a new cap of $15,000.
- Extending the tax break into mid-2010.
- Making the benefit available to all home buyers, not just first-timers.
- Offering a separate tax credit to $3,000 for borrowers who refinance.
FHA and the Sub-Prime Monster
June 26, 2009 | Filed Under Foreclosure, Mortgage and Finance, Real Estate Investment, Real Estate News, Real Estate Trends and Statistics | Leave a Comment
Many people agree that the problems we are seeing in the real estate market today were mostly caused by overly aggressive sub-prime lending. The banks and private sector lenders have been given a “get out of jail free” card thanks to President Obama’s huge bailout packages. The banks, people say, are simply “too big to fail.” Well, shouldn’t we consider the government “too big to fail?” Shouldn”t we do our very best to protect taxpayers’ money by not investing in something so close to sub-prime mortgages it’s scary? By not investing heavily in something the private sector wouldn’t touch with a ten-foot pole? For those of you who don’t know, it’s called FHA loans and we may be getting in way over our heads.
Federal Housing Administration mortgages, also known as FHA Loans, are flooding the marketplace. The FHA lost significant ground during the past several years when private sector sub-prime mortgages became popular and dangerously unregulated. In fact, FHA-insured mortgages had an 11 percent share of the American home market as recently as 1995, but that number plunged to 4.3 percent in 2003, and 3.3 percent in 2004. The main reason was that the booming sub-prime market targeted FHA’s traditional core of customers – first-time home buyers with minimal down-payment and unimpressive credit-scores. The sub-prime market also offered fewer hassles and faster approval than FHA. Sub-prime lenders accounted for one-fourth of the mortgage market in 2004.
Compare that to Freddic Mac’s estimates that FHA loans accounted for 19.5 percent of the market in 2008, and projects an increase to 28.2 percent in 2009. The government seems to be taking a lot of risk with what the free market considers “under qualified” buyers. The private sector has learned its lesson….will our government?
That said, FHA loans are different than many of the sub-prime projects sold to buyers over the past few years. FHA offers “Hybrid” five-year adjustable rate programs with 2 percent annual rate-increase limits and 6 percent live-of-the-loan limits. So, a borrower’s rate will not skyrocket from 4 percent to 12 percent in one year, which was one of the practical death sentences issued by many sub-prime loans. Also, FHA has no pre-payment fees, and borrowers who fall behind on their loan have the piece of mind that FHA-approved mortgage lenders will bend over backward to help them stay in their home….including modifying the basic terms of the loan.
It is scary to think that by 2009, almost 30 percent of home buyers will still be purchasing homes with less than 5 percent down and with flimsy credit scores. If they can’t pay their loans back, it will very quickly become a national crisis.
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