How accurate are online property estimates?
As I have been known to poke gentle fun at Trulia’s “market”analysis for Marblehead (they seem to record only a tiny fraction of sales) it is only fair that I post this excellent Trulia article about the accuracy of online estimates of value.
Source: Zillow
Marblehead: sales jumping, inventory plunging
Since May 15, 23 Single Family Homes (SFH) have received an offer in Marblehead, while there are currently just 67 SFHs for sale, compared with 116 a year ago at this time, a decline of over 40%. But the position for buyers may be even worse than it appears.
One of the numbers I follow is the number of days a property has been on the market (DOM). Last year MLS introduced a new measure, Days to Offer (DTO), which – yes- the number of days a property is on the market before it receives an accepted offer.
A house receives the greatest attention, from both buyers and agents, when it first comes on the market, but as time moves on the listing becomes stale. In an active market such as exists now, a property sees the most activity and interest in the first 30 days.
With that in mind, let’s look at three categories: current inventory, pending sales and sales so far in 2015. In each case I will show a pie chart of the overall picture (at the end of the article are tables showing the breakdown by price band). I’ll summarize and add my conclusions after the charts.
Current Inventory (more…)
Marblehead vs Swampscott
On BostonGlobe.com under Lifestyle, Real Estate, there is a tool to allow the reader to compare two towns. Here is a link to Marblehead vs Swampscott;
The most notable comparisons: (more…)
4 reasons home prices will keep going up
Here are 4 reasons home prices will continue to increase over the longer term: (more…)
Will baby boomers kill the housing market?
Will a flood of baby boomers cashing out their home equity be too much for the housing market to bear? That is the question I was asked recently.
One of the difficulties in trying to make personal decisions, like whether to buy a house today in the town of your choice, based on long-term, national forecasts (for example, boomers cashing in their housing chips) is the risk of missing out on a lot of known positives – i.e., home ownership – in fear of unknown possible negatives.
But let’s look at some of those big questions. See also 4 reasons home prices will keep going up . (more…)
Marblehead buyers spring into action
Y’all were winding me up, right, when I published What’s happening – or not – in the Marblehead market? last week?
Maybe it was all those other factors, but this week saw 10 houses receive accepted offers, after only 4 in the first week of May.
Even more impressive is the range of prices of the houses receiving offers:1 under $500,000; 6 from $500-749,000; 2 from $750-999,999; and 1 at just under $2 million and 1 at just under $5 million.
The Marblehead market is alive and kicking into high gear! (more…)
Million Dollar home sales picking up
Million dollar home sales were flat in the first four months of 2015 compared with 2014, but both years showed a strong increase over 2013.
But the pace of million dollar sales is picking up with 74 pending* sales currently. As usual, Marblehead leads the way: (more…)
Mortgage rates are rising….
The temperature’s rising….and so are mortgage rates, with the 30 Year Fixed Rate Mortgage (FRM) back to its level at the beginning of the year.
I published two reports earlier this year: Mortgage rates: How low can they go? on January 17 and Have mortgage rates bottomed? on February 14. In them I set out some basic information about mortgage rates and the “spread” between the FRM and the yield on 10 year Treasuries*.
Here is the weekly data for this year, showing the FRM at 3.85%. The rate dropped by about 1/4% earlier in the year and has now reversed that drop:
Source: US Treasury, Freddie Mac
Why did mortgage rates drop?
After years of dithering the European Central Bank finally embarked on a program of Quantitative Easing (buying Government securities) in March, but in anticipation of the start of the program investors worldwide went on a bond buying spree driving yields on Government securities to extremely low levels. The chart below shows yields in January (blue), the lows reached (orange), largely in February, and current yields (gray). Quite a ride!
Source: US Treasury, Tradingeconomics.com
And one final chart, showing the movement in exchange rates this year
Source: tradingeconomics.com
Whence from here?
A lot of the strength of the US Dollar earlier this year was based on the assumption that interest rates would rise soon. As the economy has produced less than forecast growth, in part because of the winter weather and collapsing oil price, in part because of the strength of the dollar, so expectations of rising interest rates have been pushed out further.
The median and average spread in the table on mortgage rates and 10T yields above are 1.70 and 1.72. On Friday the yield on the 10T dropped to 2.14, meaning the spread was 1.71 based on a 3.85% FRM rate.
Late on Friday HSH.com published this comment: “Mortgage rates firmed a little bit more this week, cresting at the highest levels in six months, but it appears that the four-week rise in rates is over, at least for now. The global selloff in bonds — essentially, a repositioning by investors in light of changes in currencies and central bank programs — pushed mortgage rates up by a little more than a quarter percentage point from the 2015 lows of mid-April.”
Trying to time the mortgage market is a bit like trying to time the stock market. More to the point, mortgage rates below 4% are very attractive. The bigger challenge for buyers is finding a house at a time of widespread scarcity.
*The benchmark for the 30 year mortgage is the 10 year US Treasury yield. What does that mean? In general, banks sell the mortgages they issue to Fannie Mae or Freddie Mac who in turn package them into pools and sell them to investors. Because mortgages have higher risks than US Treasuries, investors demand a higher yield than they would accept from Treasuries. The difference in yield between mortgage securities and Treasuries is called the spread.
If you – or somebody you know – are considering buying or selling a home and have questions about the market and/or current home prices, feel free to contact me on 617.834.8205 or Andrew.Oliver@SothebysRealty.com.
Andrew Oliver is a Realtor with Harborside Sotheby’s International Realty Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
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Marblehead’s incredible booming market, according to Trulia
I suspect that one day Trulia will get access to accurate information about the Marblehead market and when that happens my fun will come to an end.
Meanwhile….
Source: Trulia
Wow! (more…)
What’s happening – or not – in the Marblehead market?
I am always cautious about reading too much into short-term trends, especially in a market like Marblehead with a small number of sales, but at the same time I do try to report on current market conditions.
And I am puzzled by what has been happening over the last 2-3 weeks – or rather by what has not been happening. And that is houses receiving accepted offers. (more…)
Tom Brady and Lifebridge
Tom Brady is speaking at Salem State University on Thursday, May 7 at 7:30 pm.
I have a pair of reserved $75 tickets which I will offer to the first person who helps end homelessness by making a $500 donation to Lifebridge (www.LifebridgeSalem.org). (more…)
Housing Inventory: better in places but still tight
As we move into the spring selling season we are seeing the traditional pick-up in inventory, although it varies from town to town. Overall in Essex County, the number of Single Family Homes (SFH) for sale is 15% lower than a year ago, while the number of condos is down 17%.
Here are the numbers for each city and town. First, SFH: (more…)
Would you like free college tuition with that mortgage?
It’s that time of year when college choices have to be made – and financing decisions also – and so I would like to update an article I first wrote a couple of years ago.
What is the difference in interest payments between a 15-year and 30-year mortgage on a $500,000 loan?
Go on, guess. $25,000? $50,000? That sounds like a lot, but it’s not even close. (more…)
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