Happy New Year!

Whew! 2008 was quite a year here are some of my predictions for 2009.

• Historically low mortgage rates will be available for certain borrowers in Q1
• Mortgage rates will increase as the year progresses getting close to 7%
• Foreclosure inventory will dwindle
• Prices will start to bottom out but certainly not increase.
• The rift between prices of REO and non-REO condos will continue. SF and MF prices will have less disparity between REO and non-REO.
• Location and condition will become more and more important factors in price.
• Rents will decline/remain flat as more rental units come into the market as foreclosed properties are renovated and condo owners decide to rent vs sell.
• Renters will dictate the fee structure and will demand a no-fee rental inventory.
• Foreclosures will continue but will slow down, not because of lack of properties but rather legal wranglings and procedures, bank mergers and forced borrower work-outs that will ultimately fail but in the meantime delay the inevitable.
• Short sales will become easier as lenders focus on this low-cost alternative to foreclosure.
• Local lenders will become the power players in the mortgage market, mortgage brokers will have a tough time competing against direct lenders.

Some of these are no-brainers some are certainly a hunch. Let's see in 2010 how we did.

Our Big Data Project

I have mentioned here and there that I am working on a huge data analysis for Dorchester property sales through MLS. I finished the condo segment and am moving on to multi-families. I decided to do something really cool with the condo data and import it into mapping software. This is just a jpeg of the overall map, but in the software I can zoom in and see the address, sale date and sale price. Wicked cool if I do say so myself. It's interesting to see where the bulk of the condo sales are. Maybe in a next post I will break it down by year and give a snapshot for each year. Stay tuned.

Nice Touch

I had a closing yesterday and it was fairly routine (except the fact that it was a foreclosure and took a month longer than it should've). But the closing attorney was great. Aside from being a great attorney, he spoke Spanish and Portuguese. This enabled him to go over very important documents in my client's native tongue. Really a life saver because unless you are familiar with these documents it can sometimes be tough for a family member or friend to translate. All in all it was an excellent transaction and the family is very happy, thanks to some special people that made it happen and helped with the translations. I would have been lost without Ted Silva (the attorney who spoke Portuguese) and the daughter-in-law of the buyer. Thanks guys!

A nice touch from the attorney, he took a picture of everyone at the closing. I will definitely start doing that at my closings. For many it is a very special occasion and I think it will be nice to have a photo of it.

Cheers!

Some notes about the news.

There are quite a few people out there following the market and relying on the Case-Schiller Home Price Index, as reported by every major news outlet. What we need to be mindful of is that it only tracks single-family homes. So it is a poor reflection of many urban areas where the bulk of the properties and transactions are condos, such as the South End.
We are currently working on getting the year end sales stats so I should have some good data soon.

Let me know what neighborhoods you would like some sales stats on and I'll get on it.

Schools

We have had several inquiries lately into what public schools apply to which properties. In most suburbs, this is an easy task. But in Boston there is a whole process and no child is guaranteed a particular school, but rather they are guaranteed a seat within their school zone. For the definitive answer to schools, visit the Boston Public Schools Student Assignment Policy by clicking here.

Rainbows over Savin Hill Ave

I hope the pot'o gold is nearby....

Beware on Craigslist

It appears that the Craiglist scammers have choosen one of our properties to use in their plot to extort money from unsuspecting renters. Please note that all of our rentals require a RHA Rental Application along with a form permitting us to check your credit, employement and landlord history. Without those items being complete, returned to us and presented to a landlord, we will not execute a lease. Anyone on Craigslist promising to rent out an apartment without having you fill out those forms is not acting on our behalf. If you have any questions about any of our rentals, please call us at 617-265-3500. Also, please call us and let us know what listings are being misrepresented so we can have them removed and reported to Craigslist's management.
Thanks!

Looking forward to the winter

I am sure that most of you have been reading the headlines and seeing that foreclosures are up and prices are down. I am asked quite frequently if that is hurting business. And it is definitely slowing down the arms-legnth transaction of undistressed sales. But, we are busier than we were last year with most of our transactions being foreclosures or short sales. We are receiving quite a bit of interest in multi-families under $200k. Condos are selling under $100k in some areas and every now and then a great single family comes up.

There is some discussion about whether or not it is a good time to buy. Only you can make that decision for yourself. Right now quite a few investors are contacting us and looking to purchase a deal. Rents are inline with prices, it's just gotten to the point where the rents will actually cover the expenses.

I think prices may still decrease in some areas and it will be impossible to call the bottom until we are on the way back up. As always hindsight is 20/20. Do what is right for your individual situation, speak with an agent who is intimate with the market you want to be in and make sure your financial house is in order.

I think there are some great deals out there and several of us in the office have personally purchased property this past year. There are some buyers however, that should not buy right now, as the market is not very forgiving at this point.

And I guess that is the difference between now and a few years ago. There are bad deals now and there were bad deals then, but the difference is how forgiving or not the market is.

Pricing it right

Right now we can find many examples of why pricing it right from the get-go is ever more important in today's market. With prices falling rapidly and lending getting tighter, the need to price it well and move it quickly is paramount.

Someone I know priced their unit too high about 6 months ago. I offered some advice and they decided that they would "try it out" at the higher price and they could lower it if after some time it did not sell.

Here's the problem. It was priced too high and no one was interested. Let's say it was $275k. At the time they listed it, they could have sold it for $225k according to local comps. But now, after the market has fallen apart and the listing has become stale I would guess it would fetch $190k. They are chasing the market down with no end in sight and potentially lost roughly $35k due to not pricing it right.

My advice to them now is to take it off the market and if they can and are willing, re-list it in the spring at an appropriate price.

Fraud of another kind

One of my clients has given me license to use a term I haven't heard in a while. "Carpetbagger." Having been born in the south and grown up with many southernisms, I should explain that this is one that is akin to a swear word. Used for the foulest of opportunists that don't care who they hurt. And they have started to rear their ugly head in Dorchester. Who are they?

They are agents from afar places such as Worcester, the 495 belt, the south shore, the north shore, etc... that are representing foreclosures and are pricing property at way below market value, not providing access to cooperating brokers and not presenting offers to the sellers in an effort to keep the deal all to themselves and/or turn these properties quickly. They do not normally work in this market and have only showed up when the easy money came. They have no clue what neighborhoods command value and which ones don't. Yet, they are determining the value of your neighbors' house.

It is truly the wild west and these carpetbaggers are decimating values and ruining other property owners chances of refinancing or selling at market value. Preventing an open bidding process to buyers other than their own. Or outright fraudulently withholding offers from their sellers who are 2000 miles away and their only contact is through a web-based management system.

The sellers(banks) of these properties are losing money and with lower property values the neighborhood is losing equity and the city is losing tax revenue.

Don't call your agent...but these may be great deals for some

The city of Boston has a first-time home buyer program that has some nice, new-construction homes. They have been advertising on Craigslist, but you won't see them on any of the MLS feed sites (such as Boston.com, Realtor.com or Ziprealty.com) as they are not looking to work with real estate agents, even those that have buyers that might be a good fit. In fact, when you call, that is the first thing out of their mouth. I am a little stunned at the City's unwillingness to work with a larger pool of buyers, but I understand. Their margins are tight and the city is laying out cash for downpayment assistance in an already tight budget.

The units are typically in slower to sell areas and are new construction with generic but decent amenities and fixtures. If you are interested check out the website.

50,000 foot view

The TARP (Troubled Asset Relief Program) launched by the government last week has come out with it's game plan and update. It is a large scale view (what the corporate world calls the 50,000 ft view) It is a broad and general overview and update of the plan.
I think everyone should read these updates and know what is happening with our $700B.

Signs of trouble...?

There is some thought that some of the higher-end markets are weathering our real estate downturn better than others. And for the most part I agree. But something came across my email tonight that caused me to perk up my ears a bit. I received a request for a BPO (broker price opinion) for a distressed condo in the South End. It hasn't foreclosed yet according to masslandrecords.com, so I am assuming that it has not been recorded yet or it is being sold in a short sale or bankruptcy. This condo was purchased in 2006 for $1.26 Million with 80/15/5eq. mortgage. Meaning the seller only had 5% down.

It could be for many reasons that it is distressed; loss of job, heathcare costs, or any other unfortunate event. But in a stable or increasing market, one should have been able to sell the unit and at least break even. We can't pretend to know all of the circumstances to this particular distressed property, so I'll try not to make too many assumptions.

This is not a sign that the end is near, or even that the South End market is in trouble. But, it does cause me to look a little more closely.

The clock is ticking...

This doesn't affect too many of the buyers here in Dorchester but it does affect our clients looking in higher priced areas.

The temporary increase in conforming loan limits is set to expire on Dec 31st. Check out HUD's website to see what the conforming loan limit is in your area.

New Stuff

Just In Boston is pleased to announce that we are implementing a new web based transaction center. With this new application buyers or sellers can login and see what needs to be done, what has been completed and have access to all of the documents relating to the sale. We will be working on giving that access to all members of the buying team, attorneys, lenders etc...The system uses SSL encryption to protect sensitive data too.

It really is just so cool... We have been working on it and rolling it out to some of our clients to test drive and so far so good.

The Summer of Dead Offers...

It's a real estate agents version of a horror movie or what I experienced this summer. As we close out the summer and move on to our fall market, I'll recap, very breifly, what happened.
I wrote lots of offers, and worked with lots of buyers. The problem seemed to be two-fold and on opposite sides of the coin.

I had buyers that were writing offers and were out bid by other buyers. The properties were priced competitively in great locations and it just didn't happen for them. Many of them were foreclosures.

Other buyers were writing good offers on overpriced properties and the sellers refused to budge.

This seems to be the M.O. of the market and it can be particularly frustrating.

My hope is that this fall sellers and buyers realize that they both need to meet at a price that works.

Mortgage Fraud

If you have been looking for condo's in Dorchester, there is an illegal activity that you are or will become very familiar with; Mortgage Fraud. It starts numerous ways, but always ends bad.

You might see condos for under $100k and think that might be a great deal. And it might be for someone. But usually, condos in that price range are priced that low because they cannot be financed because there is no association. One thing to remember to consider when purchasing a condo is the health of the association. Who cares if the price is $89,000 when you are the sole owner-occupant and paying all of the common expenses and repairs?

There are certainly some buyers that these deals were made for. What you need to do as a buyer is figure out what is important to you and speak with someone familiar with the process.

For more information on mortgage fraud, visit the FBI's website on mortgage fraud.

Freddie Mac Economic and Housing Market Outlook

For all those number junkies out there. I would take this with a grain of salt, knowing that they missed the boat entirely on insuring mortgage-backed securites, but there are some interesting speculations. What catches my eye is the prediction of 30 year fixed rates hitting 7% in Q4 of 2009.

See the full pdf chart here.

New place to eat - Dot2Dot Cafe

It's not really so new, but they opened earlier this year in the spring and I have just made it around to visiting a few times for breakfast. I have become a big fan of theirs, you can too by visiting them on Dorchester Ave in the St. Marks's area.

They have a great quality menu with breakfast basics made with love! I am a big fan of the breakfast sandwich on homemade foccacia bread. The best part of the sandwich is the yolk is still sort of runny. MMMM... The home brewed iced tea is delicious too!

There are so many great places to eat in Dorchester that I have found that I rarely leave town. It's starting to become a running joke with friends and co-workers that I need to spread my horizons a bit. But great food in walking distance? I say pishah!

Visit them in person or on the web at www.dot2dotcafe.com.

OK, OK, I know it's been a while

This summer has been very busy for me and I know that shouldn't be an excuse, but it is. And I have back burnered the blog for long enough.

So, July has been relatively quiet on the buyer side of things as many have been on vacation. We have been super busy with rentals we have listed some more properties including a new development in Harrison Point. A beautiful, newly-constructed development with a pool!

I'll blog about that in a few days. But first, I need to comment on the status of the Dorchester condo market. In my personal opinion, it stinks!

There still are quite a few units on the market, but there is very little to get excited about. Then there are the dogs: Units that aren't bad and in decent areas, but the owners just can't seem to get the price right and the foreclosures/short sales that nobody wants.

This bodes well for sellers of decent units that have the ability to price it right to start.

Here are some stats that I find very interesting:
On May 3rd there were 349 units on the market with a average market time of 130 days.
Today, August 3rd there are only 283 units with an average market time of 120 days.
I think sellers that can are holdin'em. The Kenny Rogers song definitely applies in this market.

From quickly looking, this is the lowest inventory we've had in the past year, couple that with buyers are back from vacation, it is making it a bit more competitive in making/accepting offers end of things. On the flip side, once the offer is in and accepted, financing it is becoming an exercise in futility. It is getting harder and harder to close deals because of financing.

My best advice is to work with a mortgage professional and real estate agent who know the right questions to ask, before you get in too deep in a sale and find out you can't close.