Q3 Dorchester Market Report

Hi Everyone,
The 3rd quarter market report for Dorchester is now available on our website. There are some really interesting statistics here. The market has seen overall improvement since Q1 of 2009. I won't be foolish enough to call it THE bottom, but it certainly is a bottom. I expect a leveling of things over the next few years barring any catastrophic event. Buyers are excited and investors are back in action scooping up multi-family properties. Only this time they are buying and holding vs. flipping. This takes cash and lots of it, and with cash comes stability.

Dorchester Market Snapshot

Here is a recent market snapshot from MLS for the Dorchester Market. Inventory is way down and the super deals of last year are fewer.

	9/24/2008			9/24/2009
Price Range	Number of	Avg. Days	vs. today	Number of	Avg. Days
	Listings	on Market		Listings	on Market
Under $50,000	4	114		-	-
$50,000 - $99,999	41	157		22	116
$100,000 - $149,999	49	159		20	115
$150,000 - $199,999	73	202		42	124
$200,000 - $249,999	80	119		41	124
$250,000 - $299,999	107	155		64	85
$300,000 - $349,999	83	117		34	155
$350,000 - $399,999	63	112		47	98
$400,000 - $449,999	30	134		16	135
$450,000 - $499,999	41	162		19	75
$500,000 - $599,999	19	159		17	158
$600,000 - $699,999	18	227		9	298
$700,000 - $799,999	1	559		1	146
$800,000 - $899,999	1	55		3	165
$900,000 - $999,999	2	167		-	-
$1,000,000 - $1,499,999	1	16		-	-
$1,500,000 - $1,999,999	1	302		-	-
Total Properties	614	Avg. 149		335	Avg. 120
Lowest Price:	$40,000		Lowest Price:	$55,000
Median Price:	$279,460.50		Median Price:	$285,000
Highest Price:	$1,650,000		Highest Price:	$895,000
Average Price:	$298,584		Average Price:	$308,565
Total Market Volume:	$183,330,852		Total Market Volume:	$103,369,408

 

More deals to come

In the past two weeks I have seen a dramatic uptick in the number of BPO orders. A BPO is a broker price opinion. A third party contracts them out to local agents on behalf of lenders that are negotiating a short sale or marketing a foreclosure.

There has been a severe drought of BPO requests over the previous 8 months. However, I have received more requests in the past 2 weeks than the rest of 2009. This is telling me that there are more foreclosures coming and possibly some good deals too.

Dorchester first and only neighborhood real estate report is here!

What’s the average price of a one-bedroom condo in the Back Bay and South Boston? 

More importantly... who cares?

Back Bay buyers usually don’t care about what’s going on in South Boston (and vice versa).The same is true in the many different and varied neighborhoods that comprise Dorchester. Buyers interested in the northeastern Savin Hill area usually don’t also look west in Dorchester’s Franklin Park area.

Dorchester is almost as big as the South End, Financial District, Back Bay, Beacon Hill, and South Boston combined, yet in the past its market has only been examined as a whole.

That’s why Just In Boston Properties created Dorchester’s first neighborhood market report.  With data parsed into four regions, a whole new picture of Dorchester real estate emerges.

Actually, four new pictures emerge. It’s a whole new way of looking at Dorchester.

Good news!

We put two properties under agreement with buyers that attended the first open house this month. One of the listings was only on the market for 3 days. And we have back-up buyers that are chomping at the property hoping it doesn't close so they can get in on it. Very rare and great news for the market. I hope all my other listings sell as quickly!

I truly think it is a great time to sell, the best in over a year. There are some great buyers out there and very few properties that are priced well. Right now, when you have great pricing, marketing and amenities, we are seeing strong offers and quick sales.

Looking up

A promising article from Business Week on the stabilization of home prices. The Boston area is number 8. Check out the article here.

FHA! FHA! FHA!

So finally, HUD has released their update for FHA financing and it is GREAT news! Condos in associations of 2 or more units will be eligible for FHA insured financing.

We will have to wait a few months for this to become active. It will cover all loans with case numbers assigned after October 1st, 2009. Stay tuned!

Happy Dorchester Day!

Very Exciting News!

Months of hard work are paying off. Our new website is almost ready for launch. It exceeds expectations!
One of the best new features is our search page with map-based searching and filtering for foreclosures and short sales.
Keep an eye out for it soon at www.justinboston.com.

Sunday, Sunday, Sundaaaayyyy!

If you are new to Dorchester, an important fact to know is that the first Sunday in June is Dorchester Day. There is a big parade that takes over Dot Ave, and everything pretty much grinds to a halt. For us in the real estate business, it is one of the few days that we can truly take off. There are no open houses and getting from point a to point b becomes a wild goose chase as you try to weave around Dorchester Ave running into road blocks and one-way streets.

So this year, we said why not join the parade too?

And we are. We will have an excellent display of orange. All week we have been gearing up for this and our new website. Add that on top of a busy market and it's been a bit crazy.

So look for us in the parade, you can't miss us, just look for all the orange and grab a limited edition JIB lollipop!

Can't beat 'em, join 'em!
Above is Justin modeling our new parade Ts.

FHA Changes

My last post was somewhat depressing if you are a condo buyer but on the bright side, I just met with Sarah Valentini, President of Radius Financial Group. During our meeting she did mention to me that HUD was reviewing their lending criteria and it is rumored that they will be doing away with their restrictions on condo associations with less than 4 units for FHA loans. Not sure when, but it appears to be coming down the pike.

A big Yay! for that.

Sigh.....

The proverbial other shoe has dropped on us in the condo market. Lenders in the past month have tightened up lending criteria again. This time, not on the borrower, but rather the property. We are hearing that low owner occupancy rates are requiring buyers to put 25% down. The same owner cannot own more than 10% of the units or in small developments more than 1 unit. And some other restrictions, making it pretty difficult for low-down-payment buyers to purchase a condo. This of course affects sellers too.

Typical sales that are adversely affected are:
Foreclosures where more than one unit is foreclosed/owned by same entity.
All low-down-payment buyers that want to buy into a new development.
New Developments
Developments that went rental that are still trying to sell some units.

I will have more news to about this to come...

Dorchester Ave Project

I had a chance to attend Mass Highway and Boston's Department of Neighborhood Development's(DND) meeting presenting the proposed plan to upgrade 15 intersections on Dorchester Ave. There was an overall consensus of support for the project and I am eager to see it implemented.

Some notes from the meeting:

• The project has been fast-tracked due to the money being sourced from the federal stimulus package. Project bidding will start this summer and will be abbreviated. The reason explained at the meeting is that the money will expire if not acted upon within a certain time frame.
• Mass Highway has become the administrators of the project because of the way the money must be directed, DND will still have major influence.
• They realize that the plan is not perfect, but they have made the best effort to compromise to make as many positive changes as possible.

I am particularly excited about the revamping of the Fields Corner (intersection of Adams and Dorchester Ave.) and Glover's corner (Freeport, Dorchester and Hancock St intersection) receiving some major overhauls.

Of course, this means traffic and construction but I am willing to live through that for the time being. I really think this will be a major catalyst for positive change along the avenue.

Check it out here.

Very busy

It has been a great spring. Lots of activity in both the rental market and sales. This past week my buyers were caught up in a bidding war! And it wasn't a foreclosure. Sales have certainly been brisk and as I have said before it is limited to certain price points and locations. We are seeing an uptick in foreclosures too, more are coming on the market after a government and self-imposed moratorium this past winter/spring.

We are also seeing occupied foreclosures. It seems that banks are not evicting tenants/squatters/former owners after foreclosure. I think banks have realized two things, it's far too expensive in Massachusetts to evict and a vacant home attracts trouble and vandalism. At least with a tenant the copper is not being stripped out and squatters/trouble makers are kept away.

This of course presents a problem for the foreclosure buyer as it becomes the buyers' tenant at closing. Usually, this tenant has not been paying rent to the bank and is reluctant to start, meaning the buyer will then have to evict. I haven't run into this while representing a buyer yet, but I will update you if I have to and how it goes.

Cheers!

Commercial News

Loopnet is a commercial real estate listing service similar to MLS. It picks up where MLS leaves off in the commercial realm as far as listing information collected. We currently use it to list our larger commercial properties. In addition to listings they have commercial real estate news and info.

Recently they ran a poll about the commercial real estate market for their users to complete. There are some interesting results. Most notably is that access to financing is still a huge problem for sales. Personally, I can echo that on our commercial listings. The price really is not the larger issue but rather finding a buyer with significant amounts of cash that can access the financing needed to make it work.

Here is a summary of the poll results.

When do you expect the number of completed commercial real estate transaction sales to begin to pick up vs. 2008?
Q1 2009 (already happening)	3%
Q2 2009	3%
Q3 2009	12%
Q4 2009	22%
2010	47%
2011 or later	12%
Total	100%
What do you view as the biggest obstacle to commercial real estate sale transactions getting completed?
Different price expectations between sellers and buyers	22%
Access to financing	59%
Uncertainty of economic forecasts	19%
Other	0%
Total	100%
How much further will prices need to fall vs. 2008 in order for transaction volume to increase?
0-5%	12%
5-10%	28%
10-20%	28%
20-30%	25%
More than 30%	6%
Total	100%

Dancing with the Stars

Dorchester has a great number of community groups that support residents and businesses. Recently, I have been approached to volunteer to be nominated and hopefully voted on to the board of directors of Fields Corner Main Street. I had the opportunity to sit in on a board meeting tonight and was impressed by the quality of this board and their mission. I have sat on other non-profit boards in the past and for such a small organization, they really have their act together. I look forward to being involved.

Fields Corner Main Streets (FCMS) is dedicated to the commercial interests of businesses and residents in the Fields Corner area and are frequently looked to for advice and support of various interests.

On June 18th FCMS will have their annual fund raiser "Dancing with the Stars" It looks to be a great event with local celebrities and politicians dancing and judging. I encourage you to check it out and buy a ticket. The proceeds go directly to FCMS and support their operations and programs. If you cannot attend think about becoming a member. Check it all out at www.fieldscorner.org.

Check your calendar!

If I didn't know any better I would think it was 2005-2006 in the condo market.  Condo units (in decent locations) priced $200k-$300k have been flying off the shelf. Below are the units that have gone under agreement in the past 30 days and have not closed yet as listed in MLS.

Some notables

Status	Address	Days on Market	List Price
UAG	54 Percival St U:2	9	$175,000
UAG	88 Walnut Street U:3	9	$299,900
UAG	465 Ashmont St U:3	10	$199,000
UAG	979 Dorchester Avenue U:3	16	$209,000
UAG	7 Bearse U:2	26	$249,900
UAG	78 Sawyer Ave U:2	28	$259,000
UAG	226 East Cottage St U:1	28	$269,900
UAG	55 King street U:#1	31	$269,900
UAG	2-4 Centre Ave U:4A	37	$199,000
UAG	3 King St U:2	42	$219,000
UAG	3 King St U:3	42	$239,000
UAG	126 Richmond Street U:1st Floor	61	$219,900
UAG	572 Freeport U:101	64	$299,000
UAG	365 Savin Hill Ave U:1	78	$169,000
UAG	365 Savin Hill Ave U:3	90	$249,900
UAG	53 Minot St U:3	147	$229,000
UAG	78 Train St U:3	348	$229,000

 

There are some properties that I know have accepted offers but haven't been updated in MLS yet as well. It has been a great spring for condo sellers. If I were a developer, this is the price range I would be targeting.

City of Boston Home Buyer Programs

The City of Boston is recipient of some of Obama's stimulus money and it looks like they are putting it to use. Last week I met with Tony from the Department of Neighborhood Development to learn a little bit more about two programs designed to help first-time buyers and low-down-payment buyers afford a home.

Each of these programs requires some education in the city's Homebuyer 101 class. I do recommend these classes but also warn buyers that the service providers also use these classes as business lead generators. For the most part they are good, but you must remember that you are getting one person's point of view and every agent, attorney, inspector and insurance agent brings their own experiences and that might be broad or limited depending on the topic.

The two programs that are of great interest are the Cash-to-Close programs providing down payment and/or closing cost assistance to eligible buyers. I have completed sales using this program and it has it's high points and low points (it is a government program so be prepared for lots of paperwork).

For more information on these and other programs visit the Boston Home Center's website at www.bostonhomecenter.com.

Congratulations to our team!

We just got some great news! Check out our current stats from MLS.

Recovery?

The raw data suggests that the market is normalizing. I wouldn't solely rely on the MLS numbers as it is more looking backwards rather than forwards. What we don't have clear access to is future REO sales, people in pre-foreclosure and REO owned property that is not on the market. There are reports from RealtyTrac.com that there is a shadow inventory of REO that has yet to hit the market. I know of a few properties that have foreclosed but have yet to reappear on the market. So I think there is some truth to that.

What I am seeing - properties in prime locations are selling well and quickly. There have been some multiple bids on properties. I won't say bidding wars, but what is happening is a property has had a few buyers circling, buyer 1 finally puts in an offer and then the seller lets everyone know they have an offer and then buyer 2 either walks away because they don't want to enter a bidding war, or they put in a very competitive offer. Now that offer may be for the same dollar amount or maybe even slightly less, but if one has 20% down and the other doesn't, the seller will invariably accept the larger down payment because that buyer is more likely to get financing. This puts low down payment buyers at a clear disadvantage when looking at prime locations.

I have also seen appraisal issues. Pricing by appraisers are experiencing downward pressure. They are deducting value from the comps based on time passed since sale date. So even if you see comparable properties selling in December, a deduction needs to be made from their sale price to get to where an appraiser is going to be. This is critically important for sellers trying to price their property based on comparable sales.

The good news is the number of condo listings is down significantly and the days on market are slightly down.

 

Price Range	Number of	Number of	Number of	Number of	Number of	Number of
	Listings	Listings	Listings	Listings	Listings	Listings
	4/11/2008	7/11/2008	10/11/2008	1/11/2009	3/11/2009	4/11/2009
Under $50,000	1	2	8	4	2	1
$50,000 - $99,999	13	33	32	25	15	22
$100,000 - $149,999	43	42	32	17	23	18
$150,000 - $199,999	83	68	37	25	31	32
$200,000 - $249,999	49	54	47	39	30	29
$250,000 - $299,999	76	54	59	36	29	41
$300,000 - $349,999	46	29	26	20	20	16
$350,000 - $399,999	21	14	14	16	18	14
$400,000 - $449,999	16	9	2	4	3	5
$450,000 - $499,999	2	2	4	-	2	3
$500,000 - $599,999	1	3	4	-	1	3
$600,000 - $699,999	7	2	3	-	2	2
Total Properties	358	312	268	186	176	186
Ave. Days on Market	130	141	128	136	147	121
Lowest Price:	$43,000	$45,000	$39,900	$31,000	$45,000	$49,900
Median Price:	$243,461	$219,461	$239,000	$237,000	$244,950	$249,000
Highest Price:	$699,000	$639,000	$679,000	$439,000	$614,900	$614,900
Average Price:	$250,817	$224,547	$228,750	$224,759	$237,532	$240,419
Total Market Volume:	$89,792,545	$70,058,679	$61,305,265	$41,805,320	$41,805,719	$44,717,944