It’s Like ‘Night And Day’ In Massachusetts
A housing report from the Boston Herald. “More than a year after home prices peaked, the Bay State housing sector is entering what experts predict will be its second straight soft autumn market. Buyer’s broker Gary Dwyer recently took a house hunter out to look at Allston condos and lined up some 20 units to show her, five times what he would have found just two autumns ago.”
“‘It really is like night and day,’ said Dwyer. ‘A couple of years ago, a buyer with a similar price point might have only had three or four good prospects to look at.’”
“Experts expect tough going for sellers this autumn. ‘I don’t think we’re at the end of the correction yet,’ said David Wluka, president of the Massachusetts Association of Realtors. Of course, bad times for sellers mean good times for buyers. Wluka said first-time purchasers and others who don’t have to sell before buying ‘are the most-powerful consumers out there. People in that position can drive very hard bargains.’”
“Both the volume of homes available for purchase and the time they sit on the market are up sharply since the last strong autumn in 2004. MLS Property Information Network currently lists some 47,600 Bay State houses and condos for sale, nearly double the 24,200 available in September 2004.”
“Dwyer estimates that of the nearly two-dozen Allston condos he and his client checked out, ‘probably 18 were overpriced or in very poor condition given their price point.’ One exception: Unit 10, which lists for $189,000, down from an original $199,000.”
“Dwyer also favors Unit E309 at a loft complex that opened last year. Listed at $419,000 (down from an original $459,000). He added that a savvy buyer can probably haggle the price down a bit more.”
“South Shore buyer’s agent Georgia Taft Pye likes Unit 3 at Ocean Woods Drive in Duxbury (that) has been on the market for more than five months and currently lists for $479,900, down from an original $529,900.”
“Buyers agent Ronn Huth of Hamilton likes homes that list for less than their tax-assessment value, something that never happened in the boom years. ‘For years, we were accustomed to seeing properties sell for a good $100,000 above the tax-assessed value - but not now,’ he said.”
“Huth favors Wenham’s 32 Mayflower Drive listed at $549,900, $13,500 under its tax assessment. The home has been on the market for more than eight months, and the owner has knocked the price down by nearly $70,000. Huth also favors Beverly’s 35 Taft Ave., which lists at $419,000, down $80,000 from the price it originally hit the market at a year ago.”
“Newton buyer’s agent Barry Nystedt likes homes where sellers have cut asking prices 10 percent or more and properties have sat unsold for at least 100 days. One such house in popular Newtonville currently lists for $579,000, down from an original $639,000.”
“Nystedt likes the five-bedroom house in Auburndale because of its big price cut ($849,000 today from the original $1.2 million) and long time on the market (more than six months).”
‘Last year, Money magazine listed its top 100 Best Places to Live in the US, and Westborough was proud to say ‘We’re Number 36!’ Last month, the list was updated for 2006. Not only did Westborough fall from thirty-sixth, we’re not even in the top 100 anymore!’
‘Massachusetts had four towns in the top 100 last year. This year, we were down to one, with Newton landing at number 22. Although Money indicated that they eliminated areas with ‘absurdly high housing costs,’ Newton still qualified, despite its median home price of $645,000. I think most Americans would view that as ‘absurdly high.’
If you’re spending all of your money on housing, you’re not living too well.
San Diego was the best city over 1 MM people. I’m glad to hear that SD’s housing prices are not ‘absurdly high.’
But there’s cheap liquor and whores just across the border so it all evens out.
I think GS is glad of that also………hehehe
I grew up in Newton and it is a nice city to raise kids in. But prices are absurd. I lived in Westborough for many years two decades ago. It was nice and quiet when we moved there. Then the strip malls moved in with traffic lights added along Route 9. And it became a less desireable place to live.
buyer’s broker
got internet ?
I always bought condos direct- you just walk ,talk and hand out flyers= easy
- “Dwyer estimates that of the nearly two-dozen Allston condos he and his client checked out, ‘probably 18 were overpriced or in very poor condition given their price point.’
Sadly, about 75% of the sellers are still disconnected from the real market place. However, very SOON the scales will be PULLED from their eyes.
The FB’s are the ones who purchased within the last few years, not just at the peak. So if the seller lowers the price from some price they imagined their home to be worth at the peak, to a price that still gives them more than (or even close to) what they paid, there’s no “bargain” there; the buyer just becomes the new FB, and the seller can say “Whew, I dodged that one.”
With all the inertia in prices, a smart seller could get out and come out as good as others who saw this coming and sold just a little before the peak. When all the sellers realize this at the same time, however, I don’t see how prices can keep from spiraling down fast.
It’s just funny to listen to all these brokers talking about what a great “deal” buyers can get now.
I’ll bet the “buyers agents” aren’t buying anything and haven’t for 2 years
unless they’re DEet da DEE
I’m getting really tired of hearing this BS. A home is overpriced by 50% or more. The seller lowers the price a few thousand and it’s suddenly a buyers’ market? What a load of crap. Overpriced is overpriced.
Yes, my sentiments exactly. All of these so called investors(flippers) are now whining that the market is bad and want to know when it will come back. Nothing has even happened yet as far as prices going down. The way I see it the pain has not started yet. The last 5 years were a “foolish abberation”, not the way things are supposed to be. Why do people in places like LA and Vegas think it is reasonable for a home to double in price in 2 years when none of the underlying fundamentals have really changed at all, where does this come from?
“Why do people in places like LA and Vegas think it is reasonable for a home to double in price in 2 years…where does this come from?”
Because it reinforces the “fact” that their place is special. By supposing that prices doubling in only a few years are supported by fundamentals, it makes them look like geniuses for having bought before the run-up. It also makes them feel that they are the “landed gentry”, and that only “rich people” will be able to buy in their area forever more.
It’s the same everywhere…even in the smaller, equity locust spillover markets. Prices go up (fast), the word on the street is that the area has been “discovered” (finally), and *now* only rich people will be able to buy there. Yeah, right. *Everyplace* got discovered, and *everyplace* is going to be only for rich people, or the next Santa Barbara/Malibu/Manhattan, or be *the* destination for all of the rich retiring baby boomers, or the rich foreigners, or…
Just like with the stock bubble, some tech and inernet companies *did* become “the next microsoft” (or at least something big). But there was no fundamental reason why they *all* would.
Where are all of these rich retiring baby boomers that we keep hearing about? They sure aren’t in the circles I travel in. Most BBs I know plan to keep on working — out of necessity.
THE total bashing of Vegas might be a little premature.The unemployment rate for August, 2006 in Nevada is 4.2%, with 1,232,565 employed persons. Five years ago, in 2001 the unemployment rate was 5.5% with 1,104,996 employment. I know Vegas is overbuilt, I know prices are out of affordability range, and I believe the real estate market is ahead of itself BUT, if the unemployment figures stay below national average (4.7%) and the Census Bureau estimates Nevada to be the #1 growth for population by 2030, and Vegas is rated #5 for emplyment growth in the next 2 years…premature. Give me a big loss in jobs in Vegas, and I’m all over the market crash there, but let’s ad some substance to this discussion as the market turns
Adding thousands (or millions for that matter) of new jobs paying below the income necessary to afford a median priced home does little *when credit tightens*. Yes, those laborers making $25k/year can buy $400k places right now. When the secondary market for subprime prices in the risk, the Vegas market will sink. Unemployment can go to 0.0000% and the prices will drop.
Even though pay is good in LV (thankyou unions) for even the lowest jobs, LV will be hit first in a consumer recession. Casinos are easy to cut out of your spending when you have to cut back.
Exactly, I feel the same way. 400000 lowered to 385000 is crap and is not a true correction. Today’s MSN article on realestate is stating the same crap on metro areas with charts showing a tiny dip and then resuming run up. Of course the charts don’t go back to the early 1990’s when you couldn’t sell you home if your life depended on it. Let’s wait until spring to get a true feel on housing.
Wait ’til they see the difference between night, day, and nuclear winter.
‘“Experts expect tough going for sellers this autumn. ‘I don’t think we’re at the end of the correction yet,’ said David Wluka, president of the Massachusetts Association of Realtors. Of course, bad times for sellers mean good times for buyers.’
WRONG, WRONG, WRONG!!! Bad times for sellers mean good times for buyers to *wait* until
(1) successive waves of ARM resets hit the unqualified current owners,
(2) negative cash flow sinks the stuck investers,
(3) new homes already under construction are added to the existing inventory mountain,
(4) the broken home equity ATM machine strangles the retail sector, and
(5) loss of construction, finance and home sales jobs returns the housing sector to a normal, non-accelerated share of the macroeconomy.
And then we need Congress and the Senate to hold public hearings on what went wrong and how to fix the problems, and newspapers to report after the fact on this slow-motion train wreck. Finally we need “everyone” to recognize what a dumb idea it was to treat individual investing in real estate as the road to riches. Only at that point would it be wise for prospective buyers to sift through the housing bubble rubble and see whether the real home price (in terms of either the price/rent ratio or the price/income ratio for the area where they are looking) makes homes finally pencil out as an investment (one of our regular posters suggests a ratio between 100-120 of home price to rent as a good rule of thumb).
Rant over
P.S. At what point did the nation’s press corps decide it was their rightful duty to provide free advertising for real estate in the guise of regular reporting? Or has it always been this way, and I am just finally getting old and cynical enough to notice?
Well said as usual Get Stucco . Your not ranting , your just telling the truth . This run up in real estate prices was so absurb that it has to be exposed for what it was/is .
Finally we need “everyone” to recognize what a dumb idea it was to treat individual investing in real estate as the road to riches.
GS-That isn’t happening yet.
Local newspapers for the last couple weeks have been runnin’ full page ads from the “foreclosure advice” scam artists who tout, “That the BOOM is just beginning”.
This is in addition to the No money down-don’t use your Credit “course for $99.00 clowns.
PT Barnum’s adage that “there’s a sucker born every minute” is truer now than ever before. You’d think in the ‘informational age people would have smartened up by now.
First rule of investing: if “everyone” is doing it - you don’t want to.
Look no further than these these dumbazzes for the bait on foreclosure-boom investing ($5K minimum investment is required — sounds like another great Ponzi scheme in the making):
http://www.pinnacledevpartners.com/home.html
Oy, all these asking price figures are giving me a headache, they are so ridiculous and unreal, and therefore meaningless. Who gives a frig about ASSessed value these days? Local governments hand out re-zonings and permits to developers like candy. Investors pump and dump. Then the regular folk struggle to hold on despite skyrocketing tax assessments not based on any real value. It is getting very, very ugly.
‘I don’t think we’re at the end of the correction yet,’ said David Wluka, president of the Massachusetts
You Don’t? Get a clue fellow, we are at the begining… Dumb azz.
We’re still in the ‘top of the first’ with no outs. The RE whores are amazing. Thank God for the internet and blogs like this!
“Buyers agent Ronn Huth of Hamilton likes homes that list for less than their tax-assessment value, something that never happened in the boom years. ‘For years, we were accustomed to seeing properties sell for a good $100,000 above the tax-assessed value - but not now,’ he said.”
For some strange reason, the vision of a steeply-climbing airplane going into a stall spontaneously popped into my imagination as I read that line…
Once behind the power curve, the only way to avoid a stall is to drop the nose of the aircraft. For sellers in this market that of course means lowering your price to a level below its current market value and dump it. Otherwise, well it amounts to a crash and burn. Unfortunately many sellers out there are going to be like the pilot who runs out of airspeed, altitude, and ideas at the same time.
“For some strange reason, the vision of a steeply-climbing airplane going into a stall spontaneously popped into my imagination as I read that line… ”
Good analogy.
To continue the analogy, now come the spin. Will the FB pilot know to quickly apply opposite rudder (lower his price sufficiently) so he can pull out before the crash and burn?
Unfortunately, many FBs simply don’t have enough altitude to recover.
“For some strange reason, the vision of a steeply-climbing airplane going into a stall spontaneously popped into my imagination as I read that line… ”
But what was the end of the vision? Glide to a smooth landing? Bumpy, gut-jarring slam into a farmer’s field? Flaming, nose dive into a suburban backyard?
I would love for homes around here to list somewhere CLOSE to assessed value. Just looked at three condos this a.m., all in same development. Example 1: assessed value, somewhere in the mid-80s. Asking price: $195,000
When I asked the realtor for HOA docs, she copped attitude and said that I’d get to see them after the condo goes under contract and then I’d have 5 days to review to see if the conditions were amenable. Otherwise, I’d have to pay $125.00 for a set of HOA docs prior to going under contract.
Hmmm…
I told realtor that I used to produce those docs for new communities, and that even the ones that ran 100+ pages never cost more than $40…spiral bound, acetate cover, and hard back.
So then she said, these condo places get you coming and going.
“Well, they try, anyway”, I replied.
These people are making me tired.
When I asked the realtor for HOA docs, she copped attitude and said that I’d get to see them after the condo goes under contract and then I’d have 5 days to review to see if the conditions were amenable. Otherwise, I’d have to pay $125.00 for a set of HOA docs prior to going under contract.
LMAO…Great broker!
Man, if a POS Realtor copped an attitude with me like that, I’d be calling the seller and tellin’ him or her exactly what transpired.
They’ll ream her azz and report her to the standards board.
Make sure they also give you copies of any newsletters or other docs distributed to home owners in the last 6 months (put that in contract).
Also, don’t buy yet - you’ll only feel bad later.
I know I should wait a little longer but my trigger finger is getting itchy.
Plus I’m paying cash so everybody tells me I have great bargaining power.
Any thoughts out there?
I sent a mail one of the local Realtors after seeing them peddle Gary”inthe bag” watts’ prediction. I sw them on realtytimes and sent them a mail and told them that being “experts” they simply should not peddle when the prediction is nolonger valid. Here is email back from the husband and wife team
from wife:
Thanks for your input. The only constant in life is change so perhaps if you wait to buy, the market conditions will be more favorable in the future. My husband and I actually managed to flip a house this year and make a $90,000 profit as a result of the seasonal price fluctuations. Our “Flip That House” show is going to be aired on television this Saturday, September 23rd at 2:30 p.m. on TLC if you want to check it out. We took a big risk, but it paid off for us. I do admit that the carrying costs would have eaten us up if it didn’t sell right away. We opted for a 5 year interest only loan just in case we were forced to hold onto it. We closed escrow in early February, put it back on the market in mid March and it closed escrow again on April 20, 2006. In our opinion, the best time of year to buy property is January 1st-10th because it seems to be the time that sellers are the most motivated. We did have a lot of people (including agents) who thought we were crazy to try pulling this off in the current market conditions.
From husband
Thank you very much for your opinion on the Conejo Valley housing market. As you can see in my report, this forecast was provided by Gary Watts who has forecasted the market for 12 years with great accuracy. I don’t think his forecast is totally wrong. However, inventory has risen at a steady rate but prices have not declined to match the growing inventory. It definitely is a buyer’s market. In addition, the market slows down every year for Thanksgiving and Christmas and usually picks back up around the middle of February. I don’t know if this will happen again due to the fact that the interest rates have increased and, as you correctly observed, to the fact that there are many “toxic” loans out there that may force people to sell their homes or go into foreclosure. Having said all that, there are opportunities to buy. My wife and I bought a house in February, fixed it up and flipped it within six weeks (You can watch us on the show “Flip that house” on TLC or read the article in the Ventura County Star on flipping homes in the Thousand Oaks area and surroundings
http://www1.venturacountystar.com/vcs/business/article/0,1375,VCS_128_4993630,00.html).
either they are in denial or smart and want to take their clients to the cleaners.
I think I saw that flip ,( a realtor couple in Orange County ). They were taking a big risk and they sold just before the market went into the dead zone . They were realtors ,so they could save some money on marketing costs .They paid over a million for the flip .Some people would think that its pretty crazy to go into debt for over a million ,spend another 70K or so on upgrades to make 90k in a slowing market . Just a few months later I don’t think they would of made the money because thats how quickly the tides turned . Flip That House shows make it look easy and those shows have caused many people to buy houses only to be stuck with them or not having enough money to fix the houses proper .I would check and see how long the owner has owned the house and I would stay away from paying for flippers doing fix ups . I don’t even trust flippers to do right by the house .
HW this one is different! well they are from ventura county.
It comes on tomorrow afternoon
Oh I guess I got the wrong one . Maybe the flip was in Ventura County rather than Orange County . It sounds like the one that I watched . Anyway , it was a big risk flip IMHO ,yet alot of jerks will watch the show and think they can do the same .
‘They were realtors ,so they could save some money on marketing costs’
Their ‘profit’ (if the amount was accurate) was only slightly higher than the typical realtors commision on the sale, which of course they now call profit. Without this, the flip is flat or underwater. Breathe deep the gathering gloom.
I would be interested in buying that unit (E.309) which dropped from $459,000 to $419,000. I’m willing to put in an offer. How about $220,000 and the owner pays my moving costs from Los Angeles…..
This is a condo in ALLSTON. There is a railway yard, a few noodle restaurants, lots of public housing and the poorest subgroup of college students in the region, piling 6 or more into two bed apartments.
Try $150,000. 1997 price, when rents were _higher_ than they are now (adjusted for inflation), would have been $130,000.
Do you know what the rents are for some of these areas?
$8-900’s for 1 bed, $1200-$1400 for 2/3 bed, mostly student, boston university and others. definitely a student slum. we bought units under $70K in early 90’s, rents have not increased that much in 10 years, just more students per bedroom.
I can tell you I pay about 1500 for a two bedroom apt in one of the nicer parts of Newton, heat and hot water included. A condo a little bigger and a little nicer than than the apartment sold last year for about 408K.
For two beds - one bath the rents go from 1100 up 2150, the high end being condos in the nicest building in the neighborhood (Union Square). 3 beds run from 1300 to 2500. I was in the rental market in 1997, and this sounds like the exact range of prices I remember from then. Rents trended upward for a few years, then dropped around 2001 when several large dormitories were opened at BU and Northeastern. This was a big deal, because the mayor of Boston had put a lot of pressure on the big universities to house more of their students on campus in order to restore sanity to the rental market. It worked.
If you bought the place before 2000 you can break even on it. If you were buying with an eye to make enough ROI to be worth the trouble, you needed to buy before 1997.
If anyone cares to click on a link, there are some listing here:
http://www.phoenixrealty.org/search.asp
The house buyers network, a company that helps individuals sell a property fast, has identified some counties that have begun a housing bust and some that are “emerging bust markets.”
http://www.housebuyernetwork.com/PR/20060919.htm
hey,
did anybody get a chance to see the blog, iaminforeclosure.com yesterday. i was bending over laughing the whole time, especially the comments from txchick. unfortunately, it’s gone, per the suggestions of those that read it, funny.
It’s still there as of 8 MST this morning. And yes, it’s alternately funny and pathetic (assuming it’s not all fiction).
It’s still there. It’s iamFACINGforeclosure.com
Wow - he’s a 24 year old “real estate investor” in Sacramento. How many things are wrong with that statement? Who would have believed that that things would go wrong for him?
Of course, bad times for sellers mean good times for buyers. Not necessarily. First, property taxes and insurance have gone up. Second, heating, cooling and lighting cost more than 2 yars ago. And third, the expectation of ever appreciating home equity has nearly vanished.
In 2004, it was exciting to buy a home under better perceived conditions. More recent buyers have been bloodied a bit.
Anybody else looking on in desbelief at the 10-yr treasury yields dropping like a rock?
4.60% to loan my money to the biggest debtor nation in the world when inflation is currently running 4+% annually even by their jacked up CPI stats.
Forget shorting homebuilders, we will be able to make a killing shorting treasuries soon.
Yes — I posted on this independently in the bits bucket (or weekend topics?). My hunch: The hedgies have collectively noticed the incipient recession, and are piling into T-bonds in a flight to quality move.
Don’t forget any strong moves don’t have to be “piling in” — they can also be a “rush to the exists” or “highly leveraged position gone bad”
you might want to rethink that “short treasuries” idea. If you buy the idea that the aftermath of this housing bubble will be a recession the demand for money isn’t going to rise so exactly what will pump up interest rates? The fed will lower rates and, maybe, some inflation will result but that will have to be in the face of an overall weak economy, no? Maybe the dollar will drop but then again,if our economy tanks what will be the impact elsewhere around the world? Which economy will prosper in such a way as to attract more investment monies and lead to divestment of dollars? Or is it more likely, in a world wide recession, there will be a flight to quality (i.e. the dollar)?
Maybe you trust the Euro, Yen or some other currencies more…..I’m not sure that I’d bet on it with a short that has an unlimited loss capability.
I put the 401ks I help into treasuries a couple of weeks ago (mentioned here at the time)
short term in a collapse and recession you might think interest rates would lower-( hence betting that 4.60% might be a good lock in rate)….HOWEVER: long term and most assuredly, with the dollar already in trouble, animosity growing against the US,etc. Lowering the interest rate at home will cause international investors to divest of the dollar as so clearly stated by the fact above [Anybody else looking on in desbelief at the 10-yr treasury yields dropping like a rock? 4.60% to loan my money to the biggest debtor nation in the world when inflation is currently running 4+% annually even by their jacked up CPI stats.] How would we then “pay” the unpayable MONSEROUS DEBT without the temporary “shell game” of Foreign buyers? At somepoint they will realize we are in a “Catch 22″ lower rates to ’save’ the economy or RAISE to save the dollar- either way BAD NEWS- we have “mortgaged” our entire future- not just our houses, industry is gone - The old USA of “production and savings” is GONE- the ‘new world order” is around the bend—- serfdom —
One last follow up: the US DOLLAR is the greatest and FIRST to fall of all “fake” fiat currencies- hence the eventual flight to QUALITY - food, water, whiskey, bullets and any extra “savings” in real things of need and perceived value: Gold, Silver, Copper- a barters economy until it is reset- ALL PAPER CURRENCIES have failed- now it is ‘cheaper’ than paper- electronic digits!
In Eastern Mass 10% reductions are chicken feed. I will not move (load of cash, nothing to sell) until I see the 500K condos looking at 250K
I thought everyone wanted to live in Boston? I mean, c’mon, Cheers took place there. You can go to Red Sox games and sing “Sweet Caroline” during the 8th inning. Lobster for dinner everynight. Quick weekend getaways to a B & B in Vermont or Cape Cod. Everyone has those cool accents, etc., etc.,…
Oh yes, everyone wants to live in the people’s republic of Boston…10% price reductions means buy, buy, buy those 500k plus houses in the burbs…Prices will only go up again in a couple of months….You see it’s different here…(sarcasm off)
The housing market is in a full fledge free fall….
The Massachusetts Miracle was actually the Massachusetts Mirage (G.H. Bush in 1988 Debate vs M.Dukkakis)
His philosopher’s stone is a remediation plan to rid the area of soil contaminated by oil and an industrial solvent called trichloroethylene, or TCE.
Plans are for a little more than an acre to be used as commercial space, with 80 garden-level condominiums behind them that Maynard said will be affordable housing for the city’s workforce.
The condos would start at about $145,000, Iacozzi said.
A plume of contaminated groundwater fans out from the site, but poses no health threat because the contamination is less the further the water moves from the source.
http://www.nashuatelegraph.com/apps/pbcs.dll/article?AID=/20060922/NEWS01/109220112/-1/community
If you need to escape the high housing prices in MA, you can come up to Nashua for this great housing project!