Are you planning to sell your home? Presentation is crucial.

With rising mortgage rates and a market that often slows down after July 4th, presentation of your home to the market is of crucial importance .

80% of buyers start their search online, so a strong online presence and marketing plan is critical.

Check out to see how I presented this house to the market. Note the interactive floor plans which allowed the buyer, who is from out of State, to say that she knew the house thoroughly before she visited. No surprises.

Additionally, my Facebook campaign produced 400 clicks on the listing in one weekend.

If you want to discuss the best way to present your home to the market, please contact me at or 781.631.1223. for Marblehead and North Shore real estate news.

My 100th blog post

This morning I published my 100th post since starting Oliver Reports last November.

Prior to starting OR I wrote very lengthy and detailed semi-annual reviews for the Marblehead Reporter and I remember wondering if I would find enough topics to write about on a weekly basis.Well I guess I have answered that question!

My goal remains to publish timely, short articles (and links to relevant articles written by others) in order to help you, the consumer, be better informed. These articles also appear on Facebook, while on I publish additional information.

If you enjoy my articles please tell your friends!



Is it time to consider an Adjustable Rate Mortgage?

I have a confession to make: I have never used a 30 year fixed rate mortgage in 20 years of owning homes in the US. And my jumbo mortgage, which is based on 1 year LIBOR, has just reset to 3% and would be at the same rate today as the 1 year LIBOR rate has not moved over the last month.

Adjustable Rate Mortgages (ARMs) got a bad reputation because of the shenanigans of unscrupulous lenders and brokers in the boom/bubble. And I strongly believe that these people – starting at the top – should be incarcerated and the key thrown away. On an, of course, completely unrelated topic read this article alleging that Bank of America encouraged their employees to lie to home owners.

Conventional ARMs, however, for those who understand them, are a perfectly feasible financing option. Bear in mind that the average time that a mortgage is held before the house is sold or the loan refinanced is believed to be about 7 years.

According to Freddie Mac’s weekly survey, the average rate, nationally, on a 30 year fixed rate mortgage this week was 4.46%, while that on a 5/1 ARM (meaning that the rate is fixed for 5 years and then resets each year thereafter) was 3.08%.

Now I want to make this simple, so use these numbers as a rough basis on which to work.

Over 5 years, paying 4.46% p.a. makes cumulative payments of 22.3%. At 3.08% the total is 15.4%. So there is a “saving” of 6.9%. Now ARMs adjust based on a certain index but generally cannot increase by more than 2% each year. Let’s assume that the rate goes up the maximum 2% in each of years 6 and 7. The chart below shows the cumulative interest paid:

Source: Freddie Mac; Oliver Reports

Source: Freddie Mac; Oliver Reports

What this means is that even if the rate in years 6 and 7 increased by the maximum each year, interest paid over the average  7 year mortgage life would still be significantly less on an ARM than on a 30 year fixed,.

Again, this is very simplistic, not taking into account matters like principal reduction and tax deduction, but it’s the way I start my analysis. And it’s the reason I have never taken a 30 year fixed loan.

You are the only person who knows your life plan and risk tolerance, but an ARM may be an option you want to discuss with your financial advisor.

Putting the recent mortgage rate increase into perspective

One week the headlines are shouting  that the recent recovery in home prices is creating the possibility of a new bubble; the next that the spike in mortgage rates is going to kill the recovery in prices and sales.

So perhaps a little perspective is called for.

If you first thought of buying a house when the 30 year rate was 3.5% and you find it is now 4.5% then that is a sharp jump. But many of us have owned houses for much longer. This chart, from Freddie Mac, confirms that mortgage rates are still at historically low levels. What you will note is that mortgage rates were much higher when home prices wee soaring. Mortgage rates are but one factor in the home buying decision.

Source: Freddie Mac; Oliver Reports

Source: Freddie Mac; Oliver Reports

No Virginia, this it NOT a housing bubble

There is a saying in the stock market, wherein I spent some 35 years of my earlier life, that the market climbs a wall of worry, meaning that the market climbs even as many commentators express concern about various economic or political risks.

This week S&P published a report entitled: US Home Prices Suddenly Surge, But Talk Of A Bubble May Be Premature read report .

Wikipedia defines an economic bubble as: “trade in high volumes at prices that are considerably at variance with intrinsic values. It could also be described as a situation in which asset prices appear to be based on implausible or inconsistent views about the future.”

OK so before we get carried away here, let’s remind ourselves that nationally housing prices remain 28% below their peak (which WAS a bubble) and that affordability is close to all-time highs. As I have pointed out before, a market that goes down 40% and then “surges” 15% is still down 31%. Not exactly a bubble. (more…)

Mortgage rates to increase 1%

No, that’s not a forecast starting today, but a reminder of a forecast made by the Mortgage Bankers Association and published here in January. The key sentence read: “We expect that mortgage rates are likely to stay below 4 percent through the middle of 2013, and will increase gradually as the economy improves and finish around 4.4 percent in the fourth quarter of 2013.”

Well, rates did stay below 4% until June. And once rates have got back to that level, a forecast of 4.4% by year end doesn’t sound that scary, even if the speed with which we have got there is. Any angst felt at missing the bargain basement rates of the last year (and rates are back to where they were just over a year ago when they were considered amazingly cheap) is perhaps a reflection of our common desire to snare a bargain.

It is, however, worth remembering that during the boom years of 2005 and 2006 mortgage rates averaged 5.9% and 6.4% respectively.

The bottom line remains: if you want to buy a house and can afford to, do so.

$560,000 for 2 Boston parking spaces. Really? What would $560,000 buy in Marblehead?

Two parking spaces – not garages, just spaces – on Commonwealth Avenue in Boston sold this week for $560,000, which had me considering what one could buy for that money in Marblehead.

As it happens one house has just sold for exactly $560,000. Like the Boston sale this one had two parking spaces. Unlike the Boston sale this one also had a 2,600 sq.ft. 4 bedroom Single Family Home.


Marblehead has beautiful water in the harbor and ocean; and beautiful drinking water in its taps

Marblehead’s water comes from two reservoirs, Quabbin and Wachusett, and is supplied by the Massachusetts Water Resources Authority (MWRA) which released its 2012 survey this week.

Over the last 20 years the lead in MWRA’s water, as measured by parts per billion, has dropped from 60 to just 8.

And in Marblehead that number is even lower, just 4 ppb.

Marblehead: water, water everywhere and lots and lots to drink (with apologies to Coleridge).

Read MWRA report

Pending home sales in Massachusetts soared in May – or did they?

The Massachusetts Association of Realtors (MAR) reported this week that pending home sales – those with a signed Purchase & Sale agreement – for Singe Family Homes (SFHs) soared by 84% in May compared with May 2012, and by 58% compared with April 2013.

Great! But wait a minute. As I reported in this post One-day record for homes going under agreement the MLS changed its methodology of reporting sales with an accepted offer as of May 17, but DID NOT ADJUST THE HISTORIC DATA!!!!! (more…)

How long will it take to sell MY home?

My posts yesterday showed the supply of  homes for sale  in terms of months of current supply. That’s one useful piece of information.

But if you are thinking of selling, or have a house currently on the market, the question you want to ask is: How long will it take to sell MY home?”

First, let’s look at those Single Family Homes (SFHs) that are currently Under Agreement (UAG), meaning they have an accepted offer. Here’s the breakdown by Days on Market (DOM) and by price: (more…)

Housing supply varies greatly by price

When I presented the inventory data to the Harborside office meeting on Tuesday, I was asked how it varied at different selling prices.

The answer is “greatly”, with the market under $500,000 clearly a sellers’ market, while at the upper end supply is plentiful.

Here are the numbers for the North Shore overall. I can provide the numbers for any specific city or town – including those not in my composite – on request. (more…)

North Shore housing inventory gently rising

Spring and early summer see the greatest number of both listings and sales and the supply numbers at the beginning of June are a pretty good indicator of the current market.

The quick summary is that supply is gently rising, but not enough to change the balance of power which remains firmly with sellers, although as my next post shows this does vary according to the price bracket. (more…)

$80,000 reduction: waterfront Colonial with dock on nearly an acre

Wow! Come and see this beautiful home at 36 Crestwood Road, Marblehead (West Shore Drive to Shorewood Road to Pinecliff Drive to Crestwood Road), reduced to $1,295,000. Open House Sunday 12-2.

“This looks like a model home”, was one comment I heard. “What a beautiful re-do” was another. (more…)

Mortgage rates jump to highest level in a year

According to Freddie Mac the average 30-year rate rose for the fourth consecutive week to 3.81 percent, up from 3.59 percent last week, and nearly 1/2% higher than the 3.35% at the beginning of May. A year ago the rates was 3.75%.

The 15-year rate also increased to 2.98 percent from 2.77 percent.

With much discussion about when and how the Federal Reserve will move to reduce or end the Quantitative Easing policy which has kept interest rates low for an extended time, does the action of the last month indicate that mortgage rates have finally bottomed?

And will home buyers react, as they often do to rising mortgage rates, by rushing to buy now and lock in what is still an historically low rate?
Read Freddie Mac report

Massachusetts median Single Family Home price up 10.5% in April

The Massachusetts Association of Realtors (MAR) released its April report this week.
Other highlights:
Sales of Single Family Homes (SFHs) eased 1% from a year ago, the third straight month of slight year over Year (YOY)declines, caused by the shortage of homes available for sale.
But… April saw a big jump in new listings (it’s called Spring) which, according to MAR, should help the market move closer to being balanced.
Days on Market (DOM)for SFHs was 110 in April 2013, down from 126 a year ago.
Inventory at the end of April was down 27% YOY and represented 5.6 months of supply, vs 9 months a year ago and up from 5.3 months in March.
Read report