‘Housing Boom Now Just A Memory’ In Massachusetts
The Lowell Sun has this update from Massachusetts. “Local real-estate agents are altering their outlook, and tactics, as the Massachusetts housing market cools. ‘The key is to price the property correctly,’ said Dan Sullivan in Chelmsford. ‘The market isn’t catching up.’”
“For Coldwell Banker, the state’s largest real-estate company, this means that with the housing boom now just a memory, it’s time to drop listing prices. ‘It’s really basic Economics 101,’ said Angela Stamoulos, a Boston-based training manager for Coldwell Banker. ‘If homes have been sitting on the market for three months without selling, they’re probably overpriced.’”
“According to the Massachusetts Association of Realtors, 46,019 single-family homes were on the market in May, up 27 percent from 36,259 in May 2005; there were 22,555 condominiums up for sale, up 48 percent from May 2005.”
“Mark Callahan, broker/owner in Lowell, saw his own residence in Tyngsboro sit on the market for 118 days before it sold last month for $555,000. Callahan’s original asking price for the three-bedroom Colonial was $599,000. He said competition among sellers was fierce, about five homes in his subdivision were on the market simultaneously.”
“‘I wanted to sell my home, so I priced it aggressively,’ Callahan said. ‘Today’s buyers are cautious and expect a good price.’”
“Callahan said he does not recommend a dramatically low listing price right off the bat. ‘If you price your property at $200,000, people are going to offer $180,000,’ he said. ‘If you price your property at $180,000, they’re going to come in at $160,000.’”
“Immediately listing a property at a cut-rate price..’just gives (buyers) a bigger incentive to offer less money,’ (realtor) Brenda Beaudoin in Dracut said.”
“Stamoulos said Coldwell Banker’s strategy is fueled by a need to make a property stand out from an increasingly saturated field. ‘When there’s so much inventory, buyers become paralyzed and don’t get a perception of value,’ she said.”
“Sullivan agreed, saying that lowering prices is one of the few weapons at an agent’s disposal. ‘Location, condition and price are the main considerations,’ he said. ‘”You can’t change the location, but you can improve the conditions, and you can change the price.’”
The Boston Globe. “A buyer’s market is firmly in place in Massachusetts. The causes include: only so-so economic growth and a glut of supply, so those buyers who are in the market don’t feel the need to rush to get the last available property.”
“Like many potential home buyers, Chip Chaunamom has been watching and waiting. The Web designer has been looking for his first home in the Lowell area for more than a year. As the real estate market has cooled, he now is looking for a better deal in a single-family home. ‘There’s a lot more on the market and prices have dropped a lot,’ Chaunamom said. ‘I think I’m in a good position.’”
“Dorothy Murphy and her husband wanted to sell their home in Quincy as soon as possible. They put their three-bedroom starter home on the market at the end of March for about $310,000. By May, it was under agreement for $280,000.”
“Murphy said they could see the market shift even during the period their home was for sale, with many properties staying on the market longer. They felt lucky they were able to sell when they did. ‘By the time we got the offer, we were thinking, `Boy, we better take this,’ she said.”
“So what’s going on? David Wluka, president of MAR, said the market, and home sellers, are in the midst of a reckoning. Reality still hasn’t sunk in with sellers, Wluka said, and prices won’t drop further until many more would-be sellers realize they can’t command the elevated prices they once could. ‘The sellers are going through denial, basically,’ he said.”
‘Callahan said he does not recommend a dramatically low listing price right off the bat. ‘If you price your property at $200,000, people are going to offer $180,000′
As if reading about the ‘glut’ and the ’saturated market’ day after day isn’t enough of an incentive to lowball.
Here is a letter to the editor at the BG: ‘Homeowners like David Bookbinder (’Brokers helping to drive up Northeast housing prices,’ Globe North letter, July 16), who have had to carry two mortgages, know all too well that housing demand has slowed, but to point an accusatory finger at ‘overzealous’ brokers as the reason why home prices have risen so sharply in recent years is shortsighted and unfair’ ‘Admittedly, it’s the duty of a real estate professional to help sell the client’s home for top dollar..the bottom line is that homes sold with the assistance of a real estate agent sell for 16 percent more, on average, than homes sold by their owner.’
And as usual, the solution to RE woes is to zone every lot for housing development at beehive densities and build on everything that isn’t already paved over. Pretty much the story here in San Jose, never consider traffic or quality of life, just build and build. Oh yeah, another 100 plus day here today, joy !
Callahan bought the place in 1999 for 311,000.
Tyngsboro and Dracut are pretty remote for three bedroom to fetch north of 500,000. Lowell and Lawrence can not support these prices, the commute to Boston is dreadful, and the independantly wealthy yankees would never buy there.
I was pretty surprised to see those prices in Tyngsboro. The commute to Boston has greatly improved with the widening of Route 3 from four to 6 lanes. But I can’t see what the attraction is in Tyngsboro for that kind of money. If you go one city north, you’re in Nashua where you can get more than a 3 BR for that kind of money.
Of course Lowell and Lawrence can’t support those prices but Tyngsboro is reasonably far away from downtown Lowell.
Route 3 was widened from two to three lanes… I am not sure if you are speaking of another Route 3 in the area. The traffic is better then it was but getting worse as more people have moved north.
Route 3 had two lanes in each direction for four lanes. So the widening was from four lanes to six lanes. When talking about highways, the number of lanes usually refers to the total number.
Rte 3 was expanded recently from 2 lanes to 3 lanes, in each direction. Where there were 4 lanes of traffic before the expansion, there are now 6 lanes. Three lanes traveling north, three lanes traveling south.
Waitasecond - I want to be clear.
How many lanes are there on Route 3 now?
I’m not sure. Is it a prime number?
If you do a search of the enourmous amount of houses being built in Dracut, you will be amazed. I am not sure what is going to happen to those homes with a small yard that are part of the new golf course. Yes, small yard by the size of the homes being built. The development is not even done and we are in a down market now. Lots of new homes everywhere in Dracut. Many at $500K+, unreal.
‘There’s a lot more on the market and prices have dropped a lot,’ Chaunamom said. ‘I think I’m in a good position.’”
You are unless you actually buy a house and prices drop a lot more…
Note how the broker Callahan talks about selling his house, but not about buying a new one.
If prices have dropped, I’m not seeing it, aside the occasional seller who’s listing his place at $50k less than everybody else in hopes of getting a quick sale.
I’m not considering this a “buyer’s market” until I see price drops of around 40% and the monthly cost of owning a place on a fully-amortizing loan is more or less on par with the cost of renting it.
Inventory still low enough in San Jose area that prices are not falling and typical sales time is about two weeks. My crazy sister wants to sell her huge $700K townhouse she has had for a year and move to a smaller house in Willow Glen because she is convinced anything she buys there will be worth well over a million within 5 years.
I agree. I have an automated program that compiles statistics for San Jose from realtor.com every morning at 3:00 am. Inventory is way up (50-70%) and sales volume is way down (-25%), but asking prices are steady year/year.
I say we give it another six months…
Looks like brokers are finally coming to the reality, that prices have to come down to levels that people can actually afford. Everbody that could pay the high prices have already bought in. Now they have to tap into the buyers that exist at lower price levels.
Yeah, if a broker has to drop his price 10 percent, he’d better be telling his clients the same thing to move a place. And that’s at 118 days.
“For Coldwell Banker, the state’s largest real-estate company, this means that with the housing boom now just a memory, it’s time to drop listing prices. ‘It’s really basic Economics 101,’ said Angela Stamoulos, a Boston-based training manager for Coldwell Banker. ‘If homes have been sitting on the market for three months without selling, they’re probably overpriced.’”
It is great to hear quotes of Realtors (TM) which sound more and more like comments made on this blog. It really does themselves and their clientele a much better service if they honestly convince sellers that market prices are lower than they are asking, rather than following the Gary Watts forecasting model (real estate prices always go up).
realtors have to eat too,so you will see them push prices down for a long time to generate sales.all the way to the bottom.
Reality still hasn’t sunk in with sellers, Wluka said, and prices won’t drop further until many more would-be sellers realize they can’t command the elevated prices they once could. ‘The sellers are going through denial, basically,’ he said.”
This is absolutely an accurate state of the market today. From where I sit, I still see more denial than fear or acceptance.
Simmssays…How to Never Write Something You’ll Regret
http://www.americaninventorspot.com
Up here in NH things have really slowed down. Prices are dropping and unless the house is the “best buy” in its category I see it week after week on the MLS. I think we are going to see some big drops as people get sick of the 1 1/2 hr commutes. It was fine at first but people may want to spend time with their family and eat dinner before 7pm. Towns are also boosting taxes which are high in NH anyways… cost/benefit is going down the tube…
I don’t really know what you can do about the long commutes unless both work in Boston. I work with folks in Nashua and this comes up from time to time with one spouse in Nashua and the other somewhere in MA, typically 128 or Cambridge or North Andover.
Living in Nashua, one spouse gets the benefit o f not having to pay MA taxes and the benefits of lower housing prices.
I see inflation all over the place but in little pieces here and there. Basically the consumer is getting sliced and knicked to death by little stealth price increases (or price increase attempts).
Taxes are clearly an issue but there have been a few places with tax revolts. Taxes still go up but by smaller percentages with the tax revolts.
I still see the mall parking lots as being quite full so folks are still out there buying stuff. And Simon Property Group is going to put in a huge premium outlets mall on Exit 10 of the Turnpike.
I’d agree that things are markedly slowing in Southern New Hampshire as far as housing is going. I even think that the renters are getting anxious to rent their places before the school-year starts.
I still see the mall parking lots as being quite full so folks are still out there buying stuff.
Parking lot occupancy doesn’t necessarily translate into money bein’ spent.
The mall hordes are nothing more than bored to tears, fat-azzed window shoppers who no longer can tolerate the level of commercials on their fav cable station, and have nothin’ better to do, than finger Chinese made clothing and stuff their faces at the food courts.
We are Wal-Mart Nation.
My Mom and Dad are in S.NH and commented today that there are homes for sale everywhere.
I wondered if speculation had hit NH and now I believe it has.
I’m in Southern NH. I assure you that NH (especially the lakes region) has had a bit of speculation! Flippers are trying to dump lakeside camps for $600K+. Well that hasn’t worked out for them, so now they’re trying to rent the places out for $1800 / month and up. The lakes region is a great place to live but there aren’t enough good jobs in the area to support rents that high.
I would disagree that speculation has hit Southern NH (Nashua,
etc.). The folks that I know buy here to live here or raise families here. I don’t know anyone personally that’s tried to flip properties in this area. Lakes Region I can believe. Maybe the beach areas too (what little we have).
I see a lot of forsale signs around as well. And I think that landlords are getting nervous as I see a lot of activity on Craigslist. I was actually thinking of unsubbing as the amount of email from craigslist is filling up my inbox.
‘If you price your property at $200,000, people are going to offer $180,000,’ “Callahan said.
From what I’ve read about prices there, it should read:
‘If you price your property at $200,000, people are going to buy it.’
OT - Anyone see the RE booster lead article in the LA Times this morning? - “No panic attack” - about how the market is “normal” and everything is rosy? Amazing.
Diane.Wedner@latimes.com
I’m certain she would be interested in all of our comments.
That article is a classic. It’s a prime example of “journalism” as blatant shilling. It should be taught in journalism schools as such.
How brilliantly shameless to assume as “a given” that because right now, at this very instant, the L.A. market seems stable on price (never mind that sales volume has plummeted, despite L.A.’s inventory being 175% higher than last year’s), it will always be so. It is the new normal! Because we all know there are no such things as trends in markets. No need to look at any numbers and all those wacky things they might tell us. Just repeat the word “normal” like a mantra and all will be well.
the WAPO had nothing, just shopping music
BOSTON is down a solid 10% since may 05
shall we go for 20?
The market in MA is still at the very early stages of the correction. Properties are languishing for months, inventory stacking up to the moon, but I’m still hearing talk of a soft landing. It’s over, yet many people just can’t wrap their head around what’s coming next.
It’s going to be a street fight all the way down. There’s a front page article in The NYTimes about the latest refinancing tricks being employed by FB’s trying to stave off the inevitable, but it reeks of desperation.
Here’s a report from Reno:
http://news.rgj.com/apps/pbcs.dll/article?AID=/20060723/NEWS/607230378/1002
A sign of the times.
Too bad Mr. Grant didn’t try to sell last year, he could have sold that POS in two days.
I love his half-baked sidewalk leading nowhere.
Where are the gnomes?
Grant isn’t making the same mistakes many area sellers are by overvaluing his home. Grant is asking for $250,000 for his house, though Zillow.com, an online valuator of homes, estimates his house’s worth at $286,000.
Grant, Grant, Grant. If no one has purchased your home in over 4 months, then it is overvalued. Get it?
Great post! I particularly enjoyed the following two paragraphs:
“Still, many in the real estate business believe the market is in the midst of a correction, and will soon return to what is historically normal for Northern Nevada.
In fact, at the national level, Federal Reserve Chairman Ben Bernanke echoed that sentiment, saying the market is headed for a ’soft landing.’”
Oh…so now a return to historical real estate norms *is* a soft landing. Well, I guess that’s one way to resolve the disconnect–just change the meaning of the term.
That’s OK. I like that predicted outcome no matter what it’s called.
I love this: “They put their three-bedroom starter home on the market at the end of March for about $310,000.”
This is why my wife and I haven’t bought yet. You’d have to be either making very decent money, or be a fool to purchase a starter home for $310k. Even 280k is still on the high side.
Besides … who really wants to buy on a sliding market?
“Mark Callahan, broker/owner in Lowell, saw his own residence in Tyngsboro sit on the market for 118 days before it sold last month for $555,000. Callahan’s original asking price for the three-bedroom Colonial was $599,000. He said competition among sellers was fierce, about five homes in his subdivision were on the market simultaneously.”
Why is this guy selling? Doesn’t real estate ALWAYS go up? Why wasn’t there a bidding war on his place at $599,000? He lowered his price by $44,000 — didn’t his neighbors get upset at him for lowering the comps in his area?
I wonder if this guy was pumping up the market to his clients to “buy before being priced out forever” during the 118 days he had his own place up for sale.
Drove down to downtown Lowell yesterday. It’s had a facelift since I was there for a week about 10 years ago but I still had that unsafe feeling from back then while walking around yesterday. Nice to see the locks and waterways but just about all of the shops were closed.
There was a banner in what appeared to be an old mill building indicating that they would be turned into residences right downtown. Nice location I think but safety is a concern down there.
We moved to Amherst, MA from Las Vegas a year ago. Convinced that the RE market had peaked we sold our house in LV and rented here for the year. I have been waiting for a good value on a house, but we decided to rent another year across the border in NH (for tax purposes) instead. Our rent is $1100 a month for a nice three bedroom house on 3/4 acre. With the rent so low, I am willing to sit back and wait for a good value to come our way.
I don’t think real seller desperation has set in yet. Give it another year. As for brokers, what a sorry lot they have become. There is not a week that goes by that I don’t see some sorry sob relist a house on the MLS to get a “fresh” listing. With any kind of fair trade practices this would be illegal. Write your legislator and back the justice departments action against the NAR for non-competitive practices. In NH, the real estate board is being sued for not allowing internet sites without real estate licenses to list homes (although any newspaper can). Keep the pressure on.
Real estate will soon be added to The Table of Elements as a newly discovered but highly radioactive element, capable of killing Superman.
Yeah, and it will be called “Lereah”, with a half-life half as long as you’d expect (like the “Boom”).
MAZZ…Land of the Big Dig…which translates into inept, corrupt political leadership; a rotting public infrastructure; nightmarish traffic congestion; and a legacy of shoddy workmanship.
And this is just a microcosm of the whole.
Person’s gotta be on serious drugs to be buyin’ real estate in this place.