‘Good News For The Buyer’ In Massachusetts
The Massachusetts realtors have their March numbers out. “Across Massachusetts, sales of detached single-family homes increased 2 percent on an annualized basis, from 3,373 homes sold in March 2005 to 3,440 this past March, while condominium sales improved 2.4 percent over the past year, from 1,691 units sold last March to a record 1,731 condos sold in March 2006.”
“The modest gain in detached single-family home sales activity marks the first time in six months that sales have risen on a year-to-year basis. Among the factors behind the market rebound are mild winter weather, improved consumer confidence, and more realistic pricing on the part of sellers.”
“‘Buyers who had been on the fence in recent months have gotten serious now that mortgage rates are rising, and those who delayed home purchases due to the belief that a housing bubble existed have returned to the market as it’s become clear that major price declines are unlikely,’ said MAR President David Wluka.”
“While the statewide median selling price for detached single-family homes did decline in March from the same period last year, the decrease was a modest 1.7 percent, as the median price slipped from $350,000 in March 2005 to $344,000 last month.”
“‘The softening in prices we’re now seeing is due to today’s more plentiful supply of homes for sale, but it also reflects the decline in purchasing power caused by higher mortgage rates which limit how much home a buyer can afford,’ Wluka noted.”
“The inventory of unsold single-family homes and condos is now at its highest level in over a decade, with 60,373 listings as of March 2006, an increase of 39.4 percent from last March when 43,304 homes and condos we’re listed for sale.”
From CBS 4 in Boston. “Dave Duplin and his wife Charlene have dropped the price of their three-bedroom, three-bath home with hardwood floors and a mother-in-law apartment in Worcester from $369,000 to $349,000 over the past nine months, and his realtor’s asking him to drop it again.”
“That’s good news for the buyer, not such good news for Dave. ‘I would take it off the market. Yes I would rather than giving it away. I have put $85,000 to $100,000 in it where I consider it to be mint.’”
“Dave Stead, who belongs to the Worcester Regional Association of Realtors, says there’s more inventory, more choice. ‘It wasn’t uncommon to sell things in a day or two. Those days are gone.’”
“That’s good news for the buyer, not such good news for Dave. ‘I would take it off the market. Yes I would rather than giving it away. I have put $85,000 to $100,000 in it where I consider it to be mint.’”
Go ahead. Sell it for even less the longer you wait. You are not “entitled” to the price you want. It’s worth what a buyer is willing to pay.
THE HIGHTOWER INDEX
“Very Strong Buyers’ Market”
WTF!!! A 20K price reduction over a period of 9 months for a 3-BR house in Worcester??? Hey Dave, you won’t have to worry about giving it away… you will be holding it all the way to the bottom!!!
I have an employee whom I’ve relocated from MA to GA. He put his home on the market in MA 3 months ago, and he’s lowered it twice. He recently got an offer $15K below his reduced asking price and accepted it, but the deal fell through. This home is nice — it’s going to be featured on one of those home-oriented cable shows. Unfortunately, it looks like he’s going to take a $40-50K loss even if he sells it at the current asking price (he bought it two years ago). He’s not a flipper; he’s just one of the many owner-occupiers who will get burned in this mess.
Wow, that is buying two years ago. Don’t think this is near Boston is it?
The market has totally change in Boston area and it will spread soon to other areas. I saw so many 700k or 800k listings have price reduced 10% ro even 20% percent. A Westwood home originally listed @ 899k and now it is 749k and a brand new 2900sqft listing in Acton is reduced from 749k to 679k after being on the market for only 24 days. Do you feel something?
I don’t need no stinkin’ reel-e-torr tellin’ me what I kin see fer myself. I was on the phone yesterday with my sister about the high end Boston suburban market and the word is “disconnect.” Sellers are not willing to sell and buyers are not buying at these prices. Let’s make this clear. Qualified buyers are the currency of 2006. I’ve had this problem in past years. There is only one person coming to the table with money. EVERYONE else walks away with cash, only the buyer is on the other side. If you need to sell, sell. If you want to sell, sell. If you don’t care get out of the way. This is why inventory won’t rise as much from here as it has recently.
But you might get lucky . . .
“as it’s become clear that major price declines are unlikely,’ said MAR President David Wluka.”
anyone else miss that meeting?
I missed that meeting as well, John. Or, perhaps, we just keep forgetting that “real estate never goes down.” We ought to listen more carefully to those Realtors, lest we be priced out…FOREVER! LOL!
Maybe the MAR president needs to put his money where his mouth is and go buy 5 to 10 properties right now before they start going up again.
You’ve got to love these idiotic non-sequiters. I’m surprised he didn’t throw in the obligatory Soft Landing(TM) reference, just to make sure he covered the talking points.
I live in Massachusetts and price declines might be unlikely because people around here are so disconnected with reality. For example I rent an office space in one Boston’s suburbs and the owner has been trying to sell the property for over a year now. Because he got no serious buyers he ripped up the carpet in the attached house to expose the 100 year old uneven wood floors, did some minor painting to cover all the previous water damage, and renovated the ancient kitchen on the cheap kitchen (no granite, stone tiles, new appliances) using low budget cabinets and counter tops and now wants $100K more than the original asking price which got very few offers. People here are out of their minds! My mother wants to sell her house and won’t lower her price and I even found her a buyer, but she thinks she can get more. The house is priced at 150% more than she bought it for in 2000. Greed is everywhere in MA. My good friend and wife just left the state because of housing. They moved to NC and make more money there than here in Boston. It’s not what it use to be around here. Now it’s high home prices for pieces of crap and low wages for MBA grads, ridiculous!
Let em eat dog turds!
Well, better get used to it. We probably have 5 – 10 years of the Realtors® calling the bottom to look forward to.
What the MAR left out of their little spiel - the inventory now stands at 17.9 months supply. Not difficult to understand why.
This is the final dead cat bounce before the fall.
Those who think rates are the most important consideration in buying will jump in now - once rates head north propery it’s going to be a bloodbath…
“‘Buyers who had been on the fence in recent months have gotten serious now that mortgage rates are rising, and those who delayed home purchases due to the belief that a housing bubble existed have returned to the market as it’s become clear that major price declines are unlikely,’ said MAR President David Wluka.”
We’ll see about that Davey…… Could this MassHole get any more arrogant? [shaking head]
All I keep thinking of is that quote from Return of the Jedi: “Patience Lord Vader.” The truth of the matter is, housing is crashing kind of like the Nasdaq … only in slow motion. What might take a month in stock market time will take 3-6 months in housing market time. You keep seeing these moron real estate types who say “See, prices haven’t crashed yet. Ergo, no bubble.” But the reality is, we’re only slowly gettin started. Give it time…
“Patience has its limits. Take it too far, and it’s cowardice.”
— George Jackson
No mention in the headline of yoy sfh price decline or the massive inventory increase, plus the seemingly obligatory “it’s a good time to buy” signoff. Gotta love these Realtor ™ associations…
The headline may not have mentioned the year over year decline, but to the Realtors credit, these two paragraphs don’t try to dismiss the decline in prices since their peak last summer:
Detached Single-Family Home Selling Prices:
• The statewide median selling price for detached homes declined a modest 1.7 percent over the past year to $344,000
from $350,000 in March 2005. This follows flat appreciation in February – when the median price slipped 0.3 percent
from the previous February – and marks the first measurable decline in the selling price of detached homes in 11 years,
dating back to April 1995 when the statewide average selling price fell 1.5 percent on an annual basis from April 1994.
• Predictions of steep price declines in home values made last fall remain largely unfounded. While the current median
price is 8.3 percent below the record high monthly median of $375,000 set in July and August 2005, today’s prices largely
reflect healthier inventory levels, which has eased upward pressure on prices. Today’s higher mortgage rates also have
reduced buyers’ purchasing power, and that tends to result in fewer sales at the high-end of the market which drags down
the median as buyers opt to purchase smaller, less expensive homes than they would if mortgage rates were lower.
Here’s our take on what they said last month:
http://tinyurl.com/zvmet
Median down 8.3% in 8 months. There’s a reason Boston is called bean town. That’s all the FBs can afford to eat as they go upside down on their POS. Any city whose baseball fans chant Yankees suck no matter who the Red Sox are playing has serious psychological issues.
The Yankees suck, no matter who the Red Sox are playing. Sox fans are just stating that fact for all to hear.
Do they really do that? Ah, I see why despite the rolling hills and the salty sea, I don’t miss MA much!
A little OT…
“Washington, D.C. - The Joint Economic Committee (JEC) will hold a hearing on the economic outlook on Thursday, April 27, 2006
WITNESS: The Honorable Ben Bernanke, Chairman Board of Governors of theFederal Reserve System”
WIll Helicopter Ben instead be calling up the C-17s to do emergency CASH drops to bail out the FBs … gas prices etc. or will he do an about face and protect the fragile dollar? If the 10yr hits 6% this summer the HELOCs and resets will present a lot of FBs with serious pain.
My guess is that Ben cares much more about the dollar and the bond market than he does about FBs.
Dubya handed him the keys and said “drive carefully son”. Dubya still owns the car and might be sending some subtle messages. See, Dubya doesn’t give a crap about the dollar or fiscal responsibility. Ya never know…
I think you are correct. Remember when Ben made the helicopter statement the dollar was much stronger. There was room to decline. In fact a decline would fight the deflationary fear. The FED has far less wiggle room. Plunge short term rates lower and watch the dollar get pounded and long term rates go up.
yoy DECLINE is a huge thing, even if small. Maybe MA is different, but a 1.7% decline in San Francisco would make front page headlines at this time. 3 years from now? Nah.
Don’t blame this guy for trying to pull some more gullible fence sitters into the market. Of course there aren’t big yoy declines, yet. Wait until next year, after all ARM’s start resetting and people start REALLY trying to unload their houses at any tiny scrap of profit.
Mix in a little inflation adjustment and POOF - real decline of 5%!
Realtors should be saying to sellers “get out now before the interest rates go up” instead of saying to buyers” get in now before the interest rates go up”. Its the seller that has to adjust down in price when interest rates go up .
in order for a seller to get out, a buyer has to get in. how can you sell a home with no buyer?
His point is valid in that a buyer can only afford a maximum payment per month, based on their income. As interest rates rise, housing prices must fall so that a potential buyer can still afford the purchase. This behooves the seller, not the buyer, to settle a deal sooner rather than later.
MAZZ MARKET…I don’t which bubble blog coined the phrase, but this is your quintessential “catch the falling knife market”.
Prices remain ludicrious.
And the economic underpinnings for New England is a bunch of smoke and mirrors. People from MAZZ continue to bail @ 40k per year.
Employers and small businesses have recently been the targets for legistlatively mandated health insurance taxes and provision of up to 7 weeks PAID “family leave” time”.
Will the last Mazz biz remaining please turn out the lights.
The only big businesses left in MA, and the only ones that matter on Beacon Hill are financial services firms, accounting firms, law firms, hospitals and universities. In short, all the ones already supplying health insurance to their employees.
Walmart is big, but so hated that this has been advertised on the radio ‘make Wal-Mart pay’ bill.
Small businesses don’t stand a chance here, unless they stay very small indeed.
“The only big businesses left in MA, and the only ones that matter on Beacon Hill are financial services firms, accounting firms, law firms, hospitals and universities. ”
Hmmm sounds like upstate NY.
Ahh, you forgot that MA is headquarters to Raytheon, the #3 defense contractor in the US employing 80,000 and growing rapidly.
Growing in the high-tax high-congestion overpriced northeast?
Somehow I think those jobs are gonna end up in a nice low-tax southern red state (whose representatives are probably very friendly to the defense industry).
Boston is already close to the point where it’s just composed of Universities and associated students and staff, associated start-ups that need access to University labs, teaching hospitals and their associated doctors, nurses, staff, and medical companies, law and financial firms servicing Universities and hospitals, and then an outer ring of small businesses that cater to these folks. Out of a population of 600,000 in metro Boston, 125,000 are students rotating in and out. Even in a recession, 125,000 students will be rotating inand out. Even in the next Great Depression, Harvard, MIT, BU, BC, Tufts, etc will continue to sit on their endowments, fill their seats, and spend.
I would challenge someone to come up with a commercial foundation MORE stable than this group of 18 metro area Universities and their affiliated graduate programs, teaching hospitals and service organizations. Let’s hear it…
Note that I am just talking about Boston and the 20-30 minute surrounding area. Western Mass might as well be Upstate NY and Northern Mass might as well be New Hampshire. Boston is in a different universe of its own.
beaconst, In response to your comment, “…it’s just composed of Universities and associated students and staff, associated start-ups that need access to University labs, teaching hospitals and their associated doctors, nurses, staff, and medical companies, law and financial firms servicing Universities and hospitals, and then an outer ring of small businesses that cater to these folks. ”
A few additional employers/industries:
- Law firms. I can’t even count the number of law firms in my building, never mind in the entire city.
- Aerospace/Defense. Mitre in Waltham has over 5500 employees in the nation and over 1000 in metro Boston also BAE systems.
- Audio & Retail. Bose and TJX have a large presence in Framingham 20 miles from Boston.
- High tech. Draper & Akamai in Cambridge, Axcelis in Beverly (20 miles or 30 min from Boston).
- Communications. Verizon & Comcast. Not headquartered in MA, but many jobs. Verizon is in PO square in the heart of the financial district in the old Nynex building.
Let’s not forget all the ad agencies and associated businesses, media, printers, the like!
While the University provides stable jobs, they do not pay very well. The median income of academia will never support the lofty real estate prices we currently see here…
Are you familiar with academic salaries? Assistant professors start at around 80k plus generous benefits, professors pull in 150k and up, plus generous benefits, lots of free time, and lucrative consulting fees (even the unknown ones). Other staff members are well paid also. Salaries in Boston tend to be high, the police officers here start at around 60k with overtime and are up to 90k-110k within 10 years. Public school teachers start at around 50k, one of the highest salaries in the nation. Not to mention the physicians and attorneys connected to the teaching hospitals, medical schools, graduate programs, and law firms, who pull in hundreds of thousands, some in the seven figures. There is a lot of money floating around in this town, thanks to the Universities and the firms who service them.
The pillars of society include the RE complex, Wall Street, and overpaid CEO’s. They should be really called the pillagers of society.
Tech bust and the coming RE bust will really leave the average Joe and Jane sixpack poorer.
Try to raise a family and have a nominal quality of life in Massachusetts is a challenge. The only ones making money are the contractors. I recently talked to an old friend of mine who has his own contracting country and he told me he made over $200K last year.
Joe Sixpack has made a lot of money by either working on the Big Dig or indirectly benefitting from the scarcity of skilled tradesmen caused by the Big Dig. Now that is over, and I don’t see anything coming to take up the slack.
I think Joe and Jane sixpack are going to have a lot of company from Missy and Biff Jrs too.
contracting company, not contracting country, LOL
Freudian slip, that.
Perhaps, on this blog, that would be a schadenfreudian slip.
I live right in the city of Boston. Generally the softest sellers lower their prices about 10% max for the moment. Like any other big city it’s a rat race to beat the other guy. Which is why people are so admamant to get “theirs”. What I am seeing especially in the hot areas are sellers slowly chasing the price downward. Have patience Boston is in the beginning of a slow tailspin. Just my humble opinion from the front lines.
High-tech has seen better days in MA, but there are still hundreds of thousands of people working for companies in MA. Examples include: Teradyne HQ is in Chinatown, Varian Semiconductor in Gloucester, Brooks Automation in Chelmsford, LTX in Westwood, Bose HQ in Framingham, Cisco’s east coast HQ in Boxboro (where they own over 500 acres of land for expansion), BAE Aerospace in Nashua, NH, Raytheon HQ in Waltham (they employ over 15k people in MA alone), EMC HQ in Hopkinton.
Then for some apparel and footwear companies you have Reebok HQ in Canton, New Balance HQ in Brighton, Timberland HQ in Stratham, NH, Stride Right in Lexington, and TJX in Framingham was already mentioned.
Do we need to mention Liberty Mutual’s HQ in Boston (they have been there for about 70 years) and Mass Mutual out in Springfield – both employing thousands.
Whoever said there is no big business in Massachusetts is wrong. There are plenty of high-paying jobs in MA; however it has become an expensive place to do business. It remains to be seen whether MA can keep these companies here and continue to attract new businesses. As an example, Fidelity has been slowing moving people out of downtown Boston to outer lying locations like Providence, RI.
I blame Ted Kennedy for everything that is wrong with Massachusetts.
I blame the voters.
Then again, they did get the Big Dig so I guess they know who can bring home the bacon…
I didn’t care for Ted Kennedy either, until I had to live in a state without his influence. When Niagara Mohawk (electric/gas) is turning off the heat to old ladies homes when they can make all but $40 of their payment due, NY could use a little Ted Kennedy.
may need some revision
2006 Predicted Price Changes
Boston-Quincy, MA -1.3%
Cambridge-Newton-Framingham, MA -0.1%
Essex County, MA -0.9%
Barnstable Town, MA -2.4%
Worcester, MA -0.5%
Providence-New Bedford-Fall River, RI-MA -2.1%