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...
Tuesday, May 26, 2009
Friday, May 22, 2009
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:
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.
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.
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!
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!
Thursday, May 7, 2009
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% |
Wednesday, May 6, 2009
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.
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.
Saturday, May 2, 2009
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.
Wednesday, April 22, 2009
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.
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.
Monday, April 13, 2009
Saturday, April 11, 2009
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 |
Tuesday, April 7, 2009
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.
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.
Monday, March 9, 2009
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).
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).
Friday, February 27, 2009
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.
Sunday, February 15, 2009
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.
Wednesday, February 11, 2009
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.
Monday, February 9, 2009
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.
Friday, January 23, 2009
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.
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.
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