April 24, 2007

“The Escape Hatch Is Closing” In Massachusetts

The Boston Globe reports from Massachusetts. “Massachusetts house prices held steady in March, putting an end to the monthly price declines that have plagued sellers since last April. However, March sales fell, by 2.8 percent for houses and by 1.4 percent for condos, though the magnitude of those declines was smaller than in prior months.”

“(Agent) Gary Dwyer said more people are coming out this spring intending to buy because prices are more attractive. During the peak of the housing boom in 2004 and 2005, first-time home buyers in particular were put off by bidding wars and by properties that were too expensive or in poor shape for the price.”

“‘Sellers are pricing a lot closer to what market value is, lower,’ he said.”

“Real estate agents and economists said it’s premature to declare a full turnaround. Foreclosure filings by lenders against homeowners behind on their mortgage payments continue to soar. The number of auctions advertised for foreclosure sales more than doubled. In the first quarter, Warren Group said, there were 3,118 auctions, compared with 1,069 a year ago.”

The Boston Herald. “Massachusetts home sales have fallen for the second straight month, following a January rebound, making it unclear whether the market is truly bottoming out.”

“‘There are some hopeful signs here, but I would be very much reluctant to say that we’re out of the woods,’ said Terry Egan of market tracker the Warren Group, which yesterday reported the market weakened in March.”

“Egan said yesterday that just 4,239 Bay State houses changed hands last month, down 5 percent from year-ago levels. Median house-sale prices likewise have fallen 1.59 percent to $314,900 since March 2006.”

“The condo sector fared even worse, with sales volume down 8.72 percent and median prices dropping 2.68 percent to $267,625.”

“MAR also said the length of time houses take to sell hit a new record high. The group said houses changing hands in March needed 158 days on average to find buyers. That figure is up from 142 days in March 2006 and it’s the worst level ever seen in the two years MAR has tracked such data.”

The Telegram from Massachusetts. “The Warren Group showed condominium sales dropping 3.7 percent statewide, and condominium prices falling 3.3 percent, from $274,000 in 2006 to $265,000 for the most recent quarter.”

“Condominium sales in Central Massachusetts were down 26 percent for the quarter to 465 from 632 in the first three months of 2006, and the median condominium price in Central Massachusetts fell nearly 12 percent for the quarter to $190,000 from $215,000 a year ago, the Realtors association said.”

“‘What they’re showing is that the market is a little more stable than what we saw in 2006,’ said Terence Egan, for The Warren Group. ‘It’s still slumping, but with far less volatility than what we were tracking for all of last year. I wouldn’t characterize it as a balanced market. It’s still a buyer’s market, and we may see more of that.’”

“The first quarter also saw petitions to foreclose rise nearly 80 percent in Massachusetts. Advertisements for foreclosure auctions also spiked 191.7 percent compared with the first quarter of 2006, The Warren Group reported. Mortgage lenders filed 6,395 petitions to foreclose in Massachusetts Land Court from January through March, compared with 3,556 during the same period in 2006, and 3,130 in 2005.”

“He said that many homeowners entered the market at a time when loans were easily obtained, and are now finding it difficult to keep up with payments as rates adjust upward. ‘The way the numbers are tracking, the worst is yet to come,’ Mr. Egan said.”

“‘What we’re showing is that auction notices are up by nearly 200 percent,’ Mr. Eagan said. ‘What that’s telling us is that the escape hatch is closing. It’s difficult to sell, especially if the home is not worth what it was purchased for.’”

“Massachusetts foreclosure filings spiked by 47 percent in March as many local home owners struggled to make monthly mortgage payments, a new report said.”

“ForeclosuresMass.com said there were 2,190 filings in the Bay State last month, compared with 1,492 for March 2006. March 2007 was the 6th consecutive month with more than 2,000 Massachusetts foreclosure filings, the firm said.”

“‘It is clear that tens of thousands of Massachusetts residents are trapped in properties they can no longer afford,’ said president Jeremy Shapiro. ‘They can’t keep up with mortgage payments that are too high.’”

“Shapiro added, ‘With no substantial market turnaround in sight, we expect Massachusetts foreclosure rates to continue at record or near-record levels for months to come.’”

“For the first quarter of 2007, Massachusetts foreclosure filings rose 76 percent to 6,624, compared with the first quarter of 2006, Shapiro noted.”

The Providence Journal from Rhode Island. “Rhode Island’s home foreclosure rate last year was the highest in New England and exceeded the national average, according to data released yesterday.”

“Nearly 6 out of every 1,000 mortgages in Rhode Island were in the process of foreclosure during the fourth-quarter, the highest in at least 20 years, according to a recent analysis by the Federal Reserve Bank of Boston of data from the Mortgage Bankers’ Association. Rhode Island’s overall foreclosure rate was slightly higher than Massachusetts.”

“Foreclosures were even higher, nearly 4 out of every 100 mortgages, for high-cost, or subprime loans made to Rhode Island borrowers with poor credit.”

“And the pace is expected to continue to climb. Interest rates on risky adjustable rate mortgages, or ARM loans, made to borrowers with poor credit usually ratchet up, meaning that defaults on those mortgages have yet to hit their peak, said the Federal Reserve Bank of Boston’s senior research associate, Julia E. Reade.”

“In Rhode Island, the rise in home foreclosures follows one of the nation’s biggest run-up in house prices. Price appreciation has since leveled off and, more recently declined slightly, making it harder for borrowers who had grown accustomed to ‘cashing out’ their home equity to refinance.”

“‘We haven’t seen the worst of it yet,’ said the Rhode Island Mortgage Bankers Association’s Jerome D. Margulies. Margulies said he recently shuttered his own mortgage company after 22 years. ‘We have a major hurdle we’re not over yet.’”

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Comment by Bill
2007-04-24 06:41:17

One important point is seasonality. It sounds like they are talking about raw numbers of sales. Normally, sales pick up sharply between February and March, as the spring selling season moves into gear.

Comment by flatffplan
2007-04-24 06:51:32

plus yoy is bogus now
give me 04 or 05 as basis
and it will SCKKKKKKKKKKKKKK big time

Comment by flatffplan
2007-04-24 06:50:31

I bought lucent at $20
it couldn’t go lower !

Comment by MGNYC
2007-04-24 06:51:57

just wanted to thank everyone for advice yesterday in the bits thread. my wife is now on board with waiting for what we really want at what we feel is a fair price.
thanks again everyone

Comment by Eastofwest
2007-04-24 07:03:11

CCI 104 v 108.2 , Existing homes ,fall 8.4%, yoy 11.3%, median price down .3

Comment by Penina
2007-04-24 07:09:07

It’s the lousy weather in February….NAR says..

Comment by Bill
2007-04-24 07:12:07

It’s true that the weather was terrrible in Feb. However, lending started tightening at the end of Feb and early March, and we won’t see the effects of this lending tightening until next month, although it could start affecting the March new home sales out later this week.

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Comment by Bill
2007-04-24 07:15:19

The $US has been taking hits when housing news is bad. Since the dollar is already reaching new lows, this could be rough on the out look. Although big US corporations have been benefiting from the weak dollar (Texas Instruments earnings announced yesterday) will still need foreigners to buy our treasury bills. Could be a big problem for the FED

Comment by Eastofwest
2007-04-24 07:22:09

Bill, Seems I read an article on minyanville the other day that said the treasury had to buy 20% , and private US investors were net sellers.

Comment by Eastofwest
2007-04-24 08:26:17

..also as a statistic. The Home # was the biggest drop since 1989…spin that!

Seriously ,where’s the ziprealty tracker guy? I have watched their # hover around 950k-+..Now it is jumping a couple of thousands a week. Guess it’s the spring wishing season?


Comment by OB_Tom
2007-04-24 10:01:19

“The Home # was the biggest drop since 1989…spin that!”

NAR: “Change in homeprices picking up speed!”

Comment by Bad Chile
2007-04-24 07:25:43

Isn’t the weather always lousy in February?

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Comment by Penina
2007-04-24 07:33:01

Not in Florida

Comment by Beer and Cigar Guy
2007-04-24 08:01:17

Yeah, but we’re different down here. We’re working off a different economic model than anyone has ever seen. Yep, its a whoooole new paradigm down here…

Comment by sf jack
2007-04-24 09:17:46

“Ron Shuffield, president of Esslinger-Wooten-Maxwell Realtors says that ‘South Florida is working off of a totally new economic model than any of us have ever experienced in the past.’ He predicts that a limited supply of land coupled with demand from baby boomers and foreigners will prolong the boom indefinitely.”

New York Times, “Trading Places: Real Estate Instead of Dot-Coms”, 3/25/05

Comment by arizonadude
2007-04-24 07:11:03

For some reason a median fall of .3% seems very unaccurate to me.Seems like they will do anything to keep prices looking rosy.Sales fell off a cliff as expected. Could the news spark another 500 point selloff?

Comment by edhopper
2007-04-24 07:25:09

Yes, a very good discussion. Got me thinking. As much as love Ben’s Blog in general and would not replace it for it’s Macro scope, is there a forum somewhere that discusses just NYC regional real estate for us bubbleheads? If not perhaps we could start one?

Comment by MGNYC
2007-04-24 08:23:29

hey ed go to curbed. lol just kidding

try the nj real estate report by grim link on the right of ben’s blog

Comment by ozajh
2007-04-24 07:01:08

There’s a feel of grim reality in those quotes that is largely or entirely absent in RE discussions in some other areas.

Comment by Im Not Catchin that knife
2007-04-24 07:02:47

As a Mass-hole I can tell you that these articles are pure spin. Prices are plummeting and I would venture that prices are down 15% from 2005. Anyone who bought after 2003 is in the hole and not many hoses are moving. Kimberly Blanton of the Globe writes for the Business Section and Real Estate section. Her articles have one of two themes: Poor victims of predatory lendors or Housing bottom is here, BUY NOW. Anyone who buys now is a a knucklehead……A wicked knucklehead!

Comment by shadash
2007-04-24 07:21:43

How do these “spinidiots” stay employed? Eventually people are going to wake up and say WTF are you taking about.

Comment by NYCityBoy
2007-04-24 07:04:13

Existing home sales way below expectations. I’m sure Ms. Blanton and the reset of the mindless cheerleaders will have a great spin on this one.

Comment by Polestar
2007-04-24 07:12:47

Re: existing home sales plunge…

“This number reflects subprime lending” as well as the cold weather in February, said David Lereah, chief economist for the real estate group.

OMG, we had cold weather in February, can you believe it? That never happens.

Comment by bozonian
2007-04-24 19:05:00

Oh, and summer slump will be, “We had a hot summer”.

Comment by arizonadude
2007-04-24 07:17:34

Just heard biggest drop since the 80’s.
I just read the toyota sold 90k more cars than gm in the first quarter.
I think its time to go all in to the market since the economy is so great now.Larry kudlow says we are in a goldilocks economy.Wall street needs your money to pay all the bad home loans.

Comment by Bill in Carolina
2007-04-24 07:33:44

Time to go in was last summer, when Mish was saying how bad it was about to get. Up how many percent since then?

This gem from a WSJ article a while back: “There’s a small god on the trading floor who allows anyone call the top correctly once, and call the bottom correctly once, and be wrong as many times as they’d like.”

Comment by Rintoul
2007-04-24 08:13:07

They’d better start paying more than 5% on my CDs and money market accounts then!

Comment by txchick57
2007-04-24 07:04:21

existing home sales abysmal

6.12 v. 6.4 exp

m/m -8.4 vs. -4.3 exp

Comment by IllinoisBob
2007-04-24 07:19:41

Have you been hiding ??? Nice to hear from you :-)

Comment by NYCityBoy
2007-04-24 07:25:20

And I still don’t trust the numbers, one way or another.

Comment by Peripheral Visionary
2007-04-24 08:06:22

No good way to spin this one; nearly every number was bad, month-over-month, year-over-year, even broken down by regions. This is flat-out bad news, and it’s extremely telling that the market is choosing to all but ignore it. There’s a financial reality underlying those statistics, and when that reality hits, the market is going to move in a big way.

Comment by rent4now
2007-04-24 07:04:40

Even if nominal prices “flatten out” that is actually a real decline of 2%-3% or so because of inflation. One needs some appreciation just to “stay even”

Comment by Mikey(2)
2007-04-24 07:19:40

Now, now, let’s not start to spin on this site; let’s keep it real, as it were. If prices are flat, they are flat. If they go down, they are declining; if they go up, they’re increasing.

Comment by Homer
2007-04-24 07:33:23

In your statement you should say “nominal prices.” When the term “real price difference” or “price in real dollars” is used, it is referring to the price difference after correcting for inflation.

It is actually a valuable distinction to keep in mind, especially since government numbers on inflation probably underestimate the true underlying rate of inflation. When thinking about price changes over long periods of time, the figures are almost meaningless without adjusting for inflation.

For instance, in some of today’s most overpriced housing markets, will house prices ever regain the peaks they acheived a year or two ago. Yes, although it may take decades, in terms of nominal dollars. In terms of “real dollars” the answer in many markets is no, never.

Comment by Mikey(2)
2007-04-24 07:59:59

In the longer term, I think it makes sense to talk about inflation-adjusted prices, but for the most part, when people talk about real estate prices, they’re discussing nominal changes, not inflation-adjusted, for simplicity’s sake. It sure would be ideal if we could all start using the terms “nominal” and “real,” but that’s probably unnominialisti, I mean, unREAListic ;) If people paid attention to house prices in real dollars over time, boy, wouldn’t that add an interesting twist to the market. For most people, that’s ziiiiiiiing! way over their heads.

Thanks for the clarification, though. Once I see”inflation” figured into any calculation, I see a red flag signalling “spin!”

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Comment by Crapburner
2007-04-24 08:25:06

My 1992 mortgage of 53,000 dollars (still maintained and not increased) divided by $275 gold an ounce = 197 ounces of the yellow stuff.

$53,000 mortgage in 2007 with $680 gold an ounce = 78 ounces of gold.

SUPPOSED assessed value on the market in 2007 is $118,000 divided by $680 gold = 173 ounces of gold.

The real money versus the fiat stuff we are given has been a good indicator where things are going….straight to deflationary hell.

Comment by Mikey(2)
2007-04-24 09:57:05

Thanks for the education folks. I’ve always been under the impression that housing always pays off in the long run - if you can wait ling enough, your house will always make money for you. But what is it that makes houses appreciate beyond the rate of inflation? Is it increasing population and a resulting increase in demand?

Comment by az_lender
2007-04-24 10:38:18

“What makes houses appreciate beyond the rate of inflation?” - Speculation. Houses declined in value 1926-46. It could happen again.

Comment by memphis
2007-04-24 11:58:30

Or luck/prescience/good guessing about demographic trends. Someone who bought a decent house in San Francisco (for example) in the 60s, 70s, even 80s and has a hands-off-the-home-ATM attitude, will probably get to keep the windfall, whatever ups and downs in the market.

For the rest, the sage advice I think has always been, “no, a home may not be your best investment, but insofar as it is a kind of enforced savings and provides personal satisfaction and enjoyment of a kind that is very significant to most people, it’s a wise enough financial decision for many.”

Of course all of that turned upside down when housing became a Way to Get Rich Quick. But once it rights itself, that wisdom will hold again.

I hope. Globalization is a wildcard that our parents and grandparents did not have to deal with. Some part of me worries that continued adjustment there may extend the dead cat bounce down the stairs for decades, in which case the idea of a “family home” is gone, for my family. Prudent thought? Maybe. Happy though? No.

Comment by craiggy
2007-04-25 10:46:59

A home that you live in should really never be thought of as an investment. Historically, home prices appreciate at or slightly above the rate of inflation, so at best a home is an inflation hedge. When you take into account the amount it costs to own a home (principal, interest, insurance, taxes, maintenance, utilities, etc.) you will likely have to spend alot of money out of pocket every month to make a minimal equity gain. And you only see those gains when you sell. And since you have to live somewhere, those gains will likely just go back into another home, unless you are downsizing or moving to a cheaper area.

Comment by craiggy
2007-04-25 08:47:14

The following is a good article that discusses the way the government calculates inflation. It’s a bunch of smoke and mirrors to say the least. I’ve heard estimates that the real inflation rate is around 6% if you take out all of the adjustments the government now makes. With soaring gas prices, food prices, health care costs, insurance and tuition, to name a few, I buy the 6% rate more than I buy the governments 2% rate.


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Comment by anon
2007-04-25 05:08:01

The thing is, $1 today is worth less than $1 one year ago. Adjusting for inflation removes changes in the dollar from changes in housing prices, and actually helps reduce “spin”.

Comment by craiggy
2007-04-25 11:02:53

That’s why it’s important to make the distinction between real prices and nominal prices. If you had the opportunity to buy a home this year for $300,000 or wait a year and buy the same home for $300,000, clearly it makes more sense to wait a year to buy the home. If prices stay flat, a home that costs $300,000 dollars today and is still worth $300,000 five years from now, is really only worth about $260,000 in 2007 dollars (assuming 3% inflation). So if you bought a home in 2007 for $260,000 and it went up in value to $300,000, in dollar terms, and assuming 3% inflation, you broke even. If you bought a home for $300,000 in 2007 and you sell it for $300,000 five years later, that’s the equivalent of losing $40,000.

Comment by hd74man
2007-04-24 07:08:12

Mazzholeland and the rest of New England is in an economic death spiral.

The young producers are leaving because of the outrageous cost of living, while the transfer payment crowd (those over 65 and newly arrived immigrants-both illegal and legal) increase.

Major employment sectors now consist of financial services, health care for the legions of elderly, and special education which produce nothing of substance to put into the consumption pie.

There is no sustainability in the long run.

All the quotes above are compromised so as not to create a panic and say nothing more than the real estate industry is simply reshuffling the deck chairs on the Titantic.

Comment by Oi!Dodd!No!
2007-04-24 11:37:23

This a little apocalyptic.
Cambridge still has two of the world’s top universities and is global R&D HQ of several of the world’s biggest pharma companies, home of 4 of the top 10 biotechs and has plenty of quality IT employment too.
Yes - MA is in down phase, but reports of it’s death are exaggerated and premature ……

Comment by BK- former owner
2007-04-25 06:35:24

In the last ten years Boston area has lost….
John Hancock (bought by Manual life), Polaroid, saw down sizing on Raytheon manufacturing, Gilette was bought out, AD Little, GTE (telecomm bust). Many of these companies were created prior to WW2 or a result of the Wars. These companies were pillars of the Boston economy and are difficult to duplicate.

These Companies provided jobs to the Middle class that provided good wages and defined benefit pension plans. They also provide large Commercial Tax revenues to the Towns the housed them (has anyone followed Wayland’s attempts to replace $500,000 in Revenue they once received annually from Raytheon).
The BioTechs and premier Universities do not provide the same quantity of jobs for the Middle class. The Universities are exempt from Property taxes and pay modest linkage fees to the towns that house them.
The Health and Education companies are thriving because they benefit from inflation and support from the government.
It will be interesting to see how Universities fare in a Housing decline (fewer parents can extract equity from their homes to finance over priced University education) and how Biotechs/Healthcarefare if the Federal Government is forced to reduce Healthcare subsidies.

A Boston Journalist once wrote an article comparing Cleveland-OH and Boston - but, is it impossible….????

Comment by Steve W
2007-04-24 07:10:09

It is amazing how different the two boston area papers’ (herald and globe) articles are utilizing the exact same data.

Comment by Craven Moorehead
2007-04-24 08:14:03

I think the difference is easily explained by the amount of real estate advertising the Globe carries, versus the Herald. The Globe is a MARtian fluff rag, pumping furiously to maintain the illusion that everything is A-OK and that happy shiny Massachusetts residents should continue buying and $589k 1200 sq/ft ranches next to Superfund sites.

While the Herald is a little better, they did bring out Karl Case to put his lofty academic stamp-of-approval on this fresh round of bottom calling. That guy irritates me, if only because I’d like to get paid big bucks to hang out with Wellesley girls and tell tall tales about the real estate market. Must be nice work if you can get it.

Comment by jag
2007-04-24 09:21:21

Have you seen any Wellesley girls lately ?

Might not be the nirvana you imagine.

Comment by Silversurfer
2007-04-24 07:28:32

Existing housing sales lower by a great deal.

Looks like it is time to call the bottom again!

Comment by Renterfornow
2007-04-24 07:30:42

Bring on the pain. A bunch of dopes living in a fantasy world for to long. Reality hurts, but the economics make no sense for many of these dopey borrowers.
We need substantial prices drops in bubble markets to get them down to rational levels.

Comment by WT Economist
2007-04-24 07:50:06

The spring will tell. The question is, what about purchase in April, May and June that close in the second or third quarter? We’ll really see what is going on by November.

Sellers (other than foreclosure sales and builders, which I guess are not counted here) seem to be choosing not to sell rather than sell for what people can afford. This behavior is almost certain to extend the downturn through 2008.

Comment by Mikey(2)
2007-04-24 09:00:17

I can’t see where an upturn is on the horizon any time soon. I just watched the CNBC piece today where the interviewer kept on asking, “When can buyers get back in?” as if this is a short-term phenomenon. The thing about sellers is that many of them who are currently CHOOSING not to sell might well become those who MUST sell for any number of reasons. And many of them will likely choose to sell as prices continue to fall, in hopes of cutting their losses. But I can’t think of any reason why someone MUST buy. Sure, there are times when it’’s smart to buy, but never a time where one must buy. As one who has been on the sidelines wondering how people can afford housing and thinking about biting the bullet and buying more than I’d be comfortable with, I’m now thinking about buying a popcorn maker instead….

Comment by Dan
2007-04-24 07:57:48

The last sentence of the Boston Herald article is this:

Housing economist Karl Case of Wellesley College said such figures show the market “is still in a decline. But if we’re not at the bottom, we’re getting close to it.”

Yet, the Case-Shiller index indicates that we have a long way to go before we hit the bottom. Why would Karl Case disagree with his own statistics?

Comment by James Bednar
2007-04-24 08:32:44

A bottom in housing?

New or Existing?
Price or Volume?

Comment by davidcee
2007-04-24 10:06:19

Lesson I learned that most economists miss
“THE TREND is YOUR FRIEND” I need hard evidence over a 3 month period before making any projections. The last three months of housing figures point in one direction only, down, down, down.

Comment by Crapburner
2007-04-24 08:11:36

Drudge is reporting existing home sales down by 8.4 percent in March…..

…this is how it starts…..$3-4 gasoline and sales plummeting

Comment by mike
2007-04-24 08:13:08

Interesting observation from someone being interviewed by one of the anchor shills on The CNBC Comedy Show. He said this housing situation will be “L” shape as opposed to “V” shaped. In other words WHEN prices hit bottom, they will stay there for a looooong time. Goes along with my feelings. This is a waiting game for those who intend to buy but I’m not one of them because I don’t want to be a cash cow for state and federal government to milk when they need money. At the “bottom” buyers will have plenty of time, possibly several years, to cherry pick over the remains of the boom and bust. Meanwhile, it’s a simply poker game but, from now and all the way down, would-be buyers hold all the aces.

Comment by KIA
2007-04-24 08:29:07

There is a phenomenon in business which I am sure someone has given a clever name which I don’t know. Essentially, business will lie about its books during good times, and when bad news finally arrives, they will seize the opportunity to correct their books and blame it on the bad news. Expect a colossal round of adjustments now that there is a publically acceptable excuse.

Comment by ozajh
2007-04-24 08:41:14

A (very good) book written in the mid 1970’s referred to “take-a-bath accounting” as being in common use back then for this phenomenon.

Comment by jag
2007-04-24 09:23:42

Good point KIA, thanks

Comment by NoVA Masshole
2007-04-24 08:32:15

Taken from CNN Money.

“The [National Association of] Realtors said the problems in subprime could actually lead to a stronger housing market over time if tighter lending helps prevent buyers from getting in too deep with low “teaser-rate” mortgage loans before being hit with much higher payments a year or two later.

“Simply stated, a loan with the lowest monthly payment probably isn’t in your best interests - borrowers need to understand worst-case scenarios,” David Lereah, the Realtors’ chief economist, said in a statement.”

What color is the sky in your world, David Lereah?

Comment by flatffplan
2007-04-24 08:41:37

but only till June
at which point RE will perk up

Comment by lost in utah
2007-04-24 09:12:25

A little OT, but just did the calc. and there’s 1 realtor to every 50 people in my town (W. Colorado). What’re they gonna do to make a living? Well, maybe whatever they did before they became realtors.

Comment by Mikey(2)
2007-04-24 09:44:14

I just got an email from a realtor with whom I spoke nearly two years ago to, “see how my house search was going,” and to send me her (long) list of properties. Funny, 2 years ago, she showed me one house and never sent me any more listings. What goes around….

Comment by sf jack
2007-04-24 09:14:40

“‘It is clear that tens of thousands of Massachusetts residents are trapped in properties they can no longer afford,’ said president Jeremy Shapiro. ‘They can’t keep up with mortgage payments that are too high.’”


Actually, Shapiro is wrong.

It’s time that he and other “experts” realilze that people are “trapped” in houses they could not afford from the beginning.

Comment by Gurrker
2007-04-24 14:49:40

Just wondering. Why is the MEDIAN (half above and half below) price constantly used and the discussion about prices and not the MEAN (average) price. I wonder what % of the public knows the difference?

Comment by yogurt
2007-04-25 01:27:35

Because the median is less subject to influence from a small number of high-priced properties. For example, if Bill Gates sold his house this month, that would probably substantially boost the mean for Mercer Island or wherever he lives, but not the median. Not to say the median has its share of problems but it’s better overall.

And I’d say the general public knows squat - what really matters is the price of the average or benchmark house, which neither mean nor median accurately reflect.

Comment by kas
2007-04-25 19:14:22

My friend is going to auctions as there are so many now in Massachusetts. Can you get a good deal on these properties? This is not for speculation just a place to live.

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