A Year End Perspective

One of the recurring themes of 2013 has been the shortage of supply of homes for sale, accompanied by wondering when sellers would re-enter the market in larger numbers. The latter question often comes with a reference to the fact that prices have risen, say 10%, in the last year.

Well here’s another thought, one which may not be encouraging for those waiting for supply to pick up before they buy. For most of us, our home is our largest asset. When we believe that its value is increasing we feel good about spending generally and borrowing money to do so.Conversely, during the period when prices were falling, we felt poorer and were less willing to spend.

While home prices are now recovering, they are still below levels of 2006/7, whereas the stock market is at an all- time high.

Many people are feeling a little more secure in their jobs and in their personal finances, but believe their homes are still not worth what they once were – and they are not selling unless they need to move or are trading up or down.

In Marblehead, the median price for 2013 is likely to be the highest since 2007, but still 8-9% below the peak level of 2005/06. 8-9% may sound like a small number but it translates into $50,000 – and that’s real money. And when you read forecasts that prices may rise by “only 5%” in 2014, that’s still $25,000 or more.

The law of supply and demand applies to the housing market. As we approach 2014 it seems that demand is likely to remain strong, while there is no sign that supply is about to increase.Currently there are just 55 homes for sale in Marblehead with only half of those under $1 million.

And that means that prices are likely to rise again.

If you are considering buying or selling a home and have questions about the market and/or current home prices, feel free to contact me on 781.631.1223 or andrew@HarborsideRealty.com.

Andrew Oliver is a Realtor with Harborside Realty in Marblehead.

New FHFA Head moves to delay fee increases

According to the Wall Street Journal’s Nick Timiraos, Rep. Mel Watt (D., N.C.), the incoming director of the regulatory agency that oversees Fannie Mae and Freddie Mac, said on Friday night he would delay an increase in mortgage fees charged by the housing-finance giants, which was announced earlier this month by that agency.

Upon being sworn in, “I intend to announce that the FHFA will delay implementation of the loan-fee increases until such time as I have had the opportunity to evaluate fully the rationale for the plan,” said Mr. Watt in a statement.

A great time to sell a Marblehead condo

Over the last several years the condo market in Marblehead, limited as it is, has tended to see over supply. At many times there have been 30-60 condos for sale. But not now. There are just 10 available, low even for this time of year.

Here’s a table for 2013 data:

Source: MLS, Oliver Reports

Source: MLS, Oliver Reports

It is possible 1 or 2 of the pending sales will close by year end. What is significant is that after a very quiet first half (12 sales) activity really picked up with 32 sales already in the second half of the year.

Here’s another thing. Condo buyers often take out an Adjustable Rate Mortgage, most commonly a 5/1 where the rate is fixed for the first 5 years, often encompassing the time a young person or couple will live in the condo. And despite higher mortgage rates generally since the summer, the rate on a 5/1 is still about 1% cheaper than the 30 year.

Here are  reasons to think about selling now:

1. Supply and demand – very little supply, good demand
2. With the Federal Reserve finally starting to cut back on its bond purchases, and with new rules increasing the fees on mortgages in 2014, rates are almost certainly going up in 2014. ( I know that’s been said for a couple of years, but it happened in 2013 and forecasts are for a further increase in 2014).

If you are considering buying or selling a home and have questions about the market and/or current home prices, feel free to contact me on 781.631.1223 or andrew@HarborsideRealty.com.

Andrew Oliver is a Realtor with Harborside Realty in Marblehead.



Flood insurance (4): vote to delay Act set for early January

According to multiple media reports, Senate Majority Leader Harry Reid is planning to fast track legislation for a January vote that would require 60 votes and there are reported to be enough support to pass it. The proposed legislation would delay the implementation of the new flood rates for up to 4 years. (more…)

Flood Insurance (3): are the new maps accurate?

As Congress continues to bicker over reforming the Biggert-Waters Act (this week one Republican Senator blocked the unanimous consent required to move forward one Bill delaying the implementation of the new rates) a concern has been raised about the accuracy of the new maps for Massachusetts.

Independent coastal experts say the federal government used outdated wave methodology better fit for the Pacific coast when they drafted the new flood maps. As a result, they say, the government over-predicted flooding that would occur during a 100-year storm for much of the state.

According to this Patriot Ledger article Experts say FEMA cut corners on flood map methodology, the engineering experts claim that FEMA “used a mapping method fit for the Pacific coast, where the wave periods are much longer and the beaches are straighter, instead of developing a correct approach for New England.” (more…)

2014 proposed North Shore property tax rates

Individual towns and cities in Massachusetts propose a tax rate each year and then the State has to approve that rate. There is occasionally a minor difference – as in a penny or so – in the rate approved. My table shows the rates proposed – and in some cases approved – for FY’14. This is the rate that applies for the entire year to June 30, 2014 so the February and May tax bills will be adjusted for any changes occurring from the new rate.

As of December 13,  254 of the State’s 353 communities have had their FY14 tax rate approved. The highest residential rate I have been able to find is Longmeadow at $23.15  and the lowest Hancock at just $2.83. The highest commercial rate approved is $39.04 in Springfield, with Hancock again the low at $2.83.

Here on the North Shore Wenham has overtaken Swampscott for the highest residential rate in the 17 communities I track, while Lynn has pipped Swampscott for the highest commercial rate.

Sources: MA Department of Revenue; Assessors Offices

Sources: MA Department of Revenue; Assessors Offices


If you are considering buying or selling a home and have questions about the market and/or current home prices, feel free to contact me on 781.631.1223 or andrew@HarborsideRealty.com.

Andrew Oliver is a Realtor with Harborside Realty in Marblehead.






Boston condo boom: some signs of life at top end in Marblehead

From time to time I have reported, as in Boston 77 Marblehead 1, on the booming market at the higher end in Boston and contrasted it with the slow pace of sales at the upper end on the North Shore and in Marblehead in particular.

In this excellent Boston condo sales Bates on the Market (www.curbed.boston.com) article I came across this chart of condo sales in Boston since 2009:

Source: boston.curbed.com

Source: boston.curbed.com