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

Flying off the shelf

A welcome sign this spring is the rental market is picking up. Our rental business has been busier than ever. We are having a hard time having enough listings for everyone. Our Savin Hill listings have rented quickest followed by Fields Corner/Melville Park. We are about to list a bunch of new listings and they should go quickly as well.

While this is true for our prime locations. There are other areas that are still harder to rent. A good measure of rentability in Dorchester is distance from the Redline or Mattapan Trolley. The further away, the harder to rent.

Tenants: One thing to keep in mind when requesting a showing is to show up on time. At the very least, call to let us know you are running late. Usually if we don't hear from you after waiting 15 minutes, we move on to our next appointment. So please call and let us know what is going on. The other item is credit. Bad credit hurts your chance at the best apartments. Get a copy of your credit report and make sure it is accurate before you put in that application.

Landlords: Promised repairs mean nothing to renters. If your hallway, roof, back decks, etc... need repair, most renters are not going to wait or agree to live through a renovation. Don't be surprised if renters are turned off by unfinished work or needed repairs. Fix it first, then the renters will come. Also, right now most of our renters are looking for fully applianced units (fridge!), gas heat and laundry in the building.

It's Spring

The spring market has sprung! This week in 02124, 02122, and 02125 19 condos have gone under agreement. 5 of those have sold after less that 7 days on the market.

Some notables:
14 Wilbur St #2 UAG
60 Sagamore #1 UAG (only 1 day on market!)
312A Savin Hill Units 1&2 UAG
And it appears that the bidding war/multiple bid has not completely died, several of our buyers have had to play that game this week.

So, while this is great news for sellers, it comes with some pretty big caveats. The properties that sold quick were in A+ areas and were priced correctly. I see a pattern here, I think price may be important (see sarcasm).

New programs in the works

Today the state announced it is trying to stabilize the housing market by giving buyers $20,000 to $40,000 to renovate foreclosures. The program will be available to buyers through Mass Housing and is limited to communities hardest hit by the foreclosure crisis and buyers who will be owner-occupying. The full details are still coming out and we will try to update as we know more.

Time is running out

Did you know that boston residents that owner occupy their home can apply for a residential tax exemption? It is a huge savings but the window to apply is limited, ending March 31st. Visit this website to get the full details.

Help for Boston Residents

The city of Boston is offering an incentive for current residents to set down roots and buy a home in Boston. I have had one client utilize this program and the program covered all of their closing costs. As with many municipal/public programs, there are some hoops to jump though, but it can certainly be worth it covering up to 3% of the purchase price. Click here to visit the program's website.

No Time to Ski!

So traditionally, the winter is a slow time for real estate, but not this year. We have had a pretty busy winter so far. Just listed 14 Wilbur Street units 1,2 and 3 have flown off the shelf with only unit #2 left. What does this tell me? We've got serious buyers taking advantage of great interest rates and jumping on prime properties. Now, this by no means indicates a real estate recovery back to 2005, but it does say that people still want a place to live and are willing to jump on attractive, well-priced units. In fact, I have seen quite a few properties go under agreement and it looks like entry price point for condos is hovering around $200-$250k for market units (not foreclosures). A year ago there were 312 condos on the market in Dorchester, 6 months ago there were 272 and today there are 188. Clearly we are headed towards a more balanced market. The big factor affecting a recovery right now as I see it is employment. If people can keep their jobs and their homes, prices may actually level out. We'll see!

All in a night's work

Check out Justin going above and beyond by grinding off a frozen lockbox so we could get in an make sure all the smoke detectors were up and running in one of our client's listings. Does your agent do this for you? They should and it is just one example of how we do more.

Woohoo 100 posts!

I just noticed that we have completed 100 posts on our blog. Now that is over the course of a year and averages about 2 per week. Not too bad, I often see real estate blogs that got off to a great start and slow down and die. Its not for lack of something to say or that the person is lazy. Its just that as commissioned sales people, we tend to focus on the things that earn us money quickly. So far this blog has earned zero; at least from my perspective. No one has mentioned the blog when they call or email, so I can only go by what I know. But I enjoy having a voice here and hopefully spreading news that is relevant to our business makes your day more interesting.

So for post 101. You are not alone in this foreclosure/short sale mess. The Boston Globe is reporting that the John Hancock Tower is in default with two of it's lenders. Hold on kids, its going to be a wild ride. See the article here.

Keeping our contractors busy

It appears that the construction trades will have a new project to work on and the elderly will have some more housing options. The Boston Business Journal reports that the Nuestra Comunidad Development Corp. has just received $5.3M to develop a parcel on the corner of Blue Hill Ave and Quincy Street in to affordable housing units for the elderly. The project is still awaiting approval from the city and will consist of 40 units and 5,000 sq ft of commercial space.

WHAT IS HOPE FOR HOMEOWNERS? (from FHA’s Website)

When the subprime mortgage crisis reached its peak in the fall of 2008, the federal government took steps to help stabilize the American housing market. The Emergency Economic Stabilization Act of 2008 was signed into law on October 3, 2008. Part of that new law includes a requirement to help qualified homeowners avoid foreclosure through federal loan guarantees and credit enhancements.

The HOPE for Homeowners act is designed to prevent qualified home owners from defaulting on their loans, and avert foreclosure. This is done through refinancing into affordable, fixed-rate mortgages.

If you are in danger of defaulting on your home loan, it's very important to contact your lender immediately and request an evaluation of your situation. If you are able to qualify, your loan officer can help you begin the paperwork to prevent foreclosure. If you are already in discussions with the bank, your loan officer may suggest HOPE for Homeowners as a way to proceed.

AM I ELIGIBLE?
Homeowners may be eligible for HOPE for Homeowners program if they meet the following criteria as specified in the HOPE for Homeowners act 2008:

• The original mortgage is dated on or before January 1, 2008
  
• The homeowner did not default on the original loan intentionally
  
• The homeowner is not invested in multiple home loans
  
• All information on the original mortgage is true (including income sources and job details)
  
• The homeowner has not been convicted of fraud
  

HOPE for Homeowners is not a simple refinancing program. While it does allow qualified borrowers who are stuck in variable-rate mortgages to refinance into affordable, fixed-rate mortgages, there is a trade-off known as equity sharing.

WHAT IS EQUITY SHARING?
Those who apply and are accepted for the HOPE program must agree to an equity sharing program. Equity is the difference between the amount of your original loan and the actual value of the home; if you sell or refinance your home after entering the HOPE program, under the terms of HOPE you are required to share any equity with the FHA. How much the government receives depends on how long you wait to sell or refinance. If you sell in the first year of your participation in HOPE, the government receives 100% of the equity. There is a sliding scale after the first year;

• Year two—homeowners can keep 10% of the equity, FHA gets 90%
  
• Year three—homeowners keep 20%, FHA gets 80%
  
• Year four—homeowners keep 30%, FHA gets 70%
  
• Year five—homeowners keep 40%, FHA gets 60%
  

After year five, homeowners split the equity from sale or refinancing 50/50 with the Federal Housing Administration. If there is no equity or negative equity at the time of sale or refinancing, the FHA receives nothing.

WHAT ARE THE BENEFITS OF HOPE?
The benefits of participating in HOPE for Homeowners include;

• Keeping your home
  
• Getting a 30-year fixed-rate mortgage (extendable to 40 years in some cases)
  
• Lower monthly mortgage payments which do not change
  

The 30-year loan is extendable in some situations. Extending the terms to 40 years is helpful in cases where the homeowner has a large amount of debt; the 40-year term reduces mortgage payments further. There are requirements and restrictions on these extended loans. Check with your lender to see if you qualify for the 40-year loan terms under the HOPE program.

The HOPE for Homeowners program runs until September 20, 2011

Small tid-bit

Every day I receive a newsletter containing real estate industry news. In this morning's newsletter there was an article about foreclosures, how agents can help those being foreclosed on and some tips for those in foreclosure. Most of it was sales pitchy and same-old, same-old.

But I did learn something. Buried in the end of the article there was a mention that many foreclosures are happening illegally because mortgage documents often have errors or looked-over provisions that the lender missed. Especially if the loan has changed hands several times and the servicing company has not kept up on it. The article suggests that one should contact an attorney that specializes in consumer law (but not a real estate attorney). The attorney may be able to find something in the document that the lender overlooked. And that may give a homeowner some time to sort it out with the lender before losing their home.

Market Snapshot

Here is a quick peak at the market. This represents all Multi-family properties sold within the past 90 days in Dorchester.

Price Range	# ofListings	Avg. Days on Market	Avg. Sale Price	Avg. List Price	Sale:List Ratio	Avg. Orig Price	Sale:Orig Ratio
$0 - $49,999	0	0	$0	$0	0	$0	0
$50,000 - $99,999	3	46	$86,333	$105,900	96	$127,567	85
$100,000 - $149,999	6	277	$138,108	$157,008	89	$228,750	66
$150,000 - $199,999	17	165	$165,891	$173,847	96	$245,763	76
$200,000 - $249,999	15	72	$229,046	$235,033	99	$255,013	93
$250,000 - $299,999	16	95	$265,709	$275,119	98	$310,419	90
$300,000 - $349,999	15	121	$313,433	$336,613	94	$359,313	90
$350,000 - $399,999	1	163	$380,000	$399,900	95	$429,900	88
$400,000 - $449,999	1	35	$445,000	$449,000	99	$469,000	95
$450,000 - $499,999	0	0	$0	$0	0	$0	0
$500,000 - $599,999	1	38	$500,000	$525,000	95	$525,000	95
$600,000 - $699,999	0	0	$0	$0	0	$0	0
$700,000 - $799,999	0	0	$0	$0	0	$0	0
$800,000 - $899,999	0	0	$0	$0	0	$0	0
$900,000 - $999,999	0	0	$0	$0	0	$0	0
$1,000,000 - $1,499,999	0	0	$0	$0	0	$0	0
$1,500,000 - $1,999,999	0	0	$0	$0	0	$0	0
$2,000,000 - $2,499,999	0	0	$0	$0	0	$0	0
$2,500,000 - $2,999,999	0	0	$0	$0	0	$0	0
$3,000,000 - $3,999,999	0	0	$0	$0	0	$0	0
$4,000,000 - $4,999,999	0	0	$0	$0	0	$0	0
$5,000,000 - $9,999,999	0	0	$0	$0	0	$0	0
$10,000,000 - $99,999,999	0	0	$0	$0	0	$0	0
Total Properties	75	Avg. 123	$234,951	$247,542	96	$287,182	86
Lowest Price: $75,000
Highest Price: $500,000
Median Price: $245,000
Average Price: $234,951
Total Market Volume: $17,621,345