GE to move to Boston
As has by now been widely reported GE is moving its corporate offices from Fairfield, CT to BOSTON. This is great news for the city, as GE’s move will likely attract other businesses, as explained in the Boston Globe’s GE has selected Boston article.
And, of course, the move will only serve to add demand to the real estate market, both in Boston and nearby towns with ready access to the city. Just to remind GE execs, you can get to the Seaport district – reportedly where GE is looking – from the North via the Ted Williams Tunnel…. (more…)
Playboy mansion AND Hugh Hefner for only $200 million
According to this Playboy mansion for sale article in the Boston Globe, the Playboy mansion, which is for sale for a mere $200 million, comes complete with a zoo license and Hugh Hefner. My understanding is that the two items are unconnected. (more…)
Swampscott 2015 Condo market review
The highlights of this Swampscott 2015 Condo market review are that sales were down slightly from last year’s record level, while the median price declined as a result of a change in the mix of sales. Perhaps the most striking number, however, is the ASR* number which suggests a significant increase in Assessed Values for condos in Swampscott next year.
Median Price
After a strong recovery in 2013/14 the median price slipped last year, but as the table below the chart shows this was the result of a change in the mix of sales in the first half of the year. Because of the small number of sales and seasonal variation (weather!) I do not report on quarterly numbers for condo sales. Swampscott condo market analysis is further complicated by the fact that there is a huge range of condos, from the older units around Vinnin Square to the brand new oceanfront luxury units on Humphrey Street.
The median price is that at which 50% of the sales take place both above and below the price. In H1 2014 only 41% of the sales took place below $250,000, so the median price must have been higher than that. It was – $272,000. In H1 2015, however, a full 58% of sales occurred below $250,000, so the median price was lower than that – $242,000. Note also the much smaller number of sales in 2015 : the smaller the number the greater the chance of a large swing in the median number.
Sales
Condo sales averaged 65 a year in the 2003-2006 period before slumping to a low of just 21 in 2011. The recovery since then has been quite dramatic. Both new construction and conversions have contributed to the growth in sales.
Interestingly, the number of condos for sale has increased in recent years – at least until 2o16 – although the number on July 1 has not approached the 45 and 47 of 2005/2006. I will monitor inventory during the coming year.
ASR*
The ASR is the ratio of Assessed Value (AV) to Sales Price, so if the ASR is less than 100% that means sales are taking place above AV. In 2015, despite the revaluation that occurred in 2014, the median ASR was just 79.2%, meaning that the median sale occurred at some 26% (100/79.2) above AV. Clearly, it would be logical to expect a jump in condo AVs next year.
Comment
Just like the Single Family market, sales and prices of condos in Swampscott have recovered sharply from their depressed levels during the great recession, and the market now is back to a more normal state, albeit one where supply remains an issue.
* One way I measure prices is by the ratio (ASR) of Assessed Value (AV) to Sales Price (SP). The ASR is the AV divided by the SP: if the SP is rising (prices going up), the ASR will fall.
Properties selling above their AV will have an ASR below 100%. What this means is that in a period of rising prices the ASR is likely to be falling. So what we, as homeowners, want is an ASR below 100% and falling.
Remember that AVs are a lagging indicator: the tax bills that have just been sent out for FY2016 are based on actual sales in 2014. Thus the 2015 sales data, reported in this review, will be the basis for FY2017 assessments.
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.
Read How should I choose the broker to sell my house?
Andrew Oliver is a Realtor with Harborside Sotheby’s International Realty. Each Office Is Independently Owned and Operated
You can REGISTER to receive email alerts of new posts on the right hand side of the home page at www.OliverReports.com.
@OliverReports
Open Houses today: no Pats game
No Pats game today so plan to visit these Open Houses, with everything from a condo in Salem under $200,000 to an oceanfront estate in Marblehead: (more…)
Marblehead Harbor may get security cameras
The Marblehead Reporter’s article Marblehead harbor is eyed for security cameras describes how, as part of a larger initiative spearhead by the Massachusetts Harbormasters Association that aims to cast a public safety net over the commonwealth’s waterways, cameras may be installed in Marblehead Harbor. (more…)
More sales in Marblehead’s higher end
Many of us were surprised that the higher end did not see more activity throughout 2015, but there was clear evidence of a pick up as the year progressed.
In the last 4 months of the year there were 2 sales over $4 million and 1 over $3 million. 3 sales over $3 million in one year may not sound a lot compared with, say, Boston condo sales at 22 Liberty, but 4 is the most we have had in one year. And a further sale above $4 million closed this week, while there are two more pending sales in the mid to high $3 million range.
Pictured below is 11 Crown Way which has an Open House this Sunday from 12:00 – 2:00.
In my Marblehead 2015 Housing Market Review I commented: “after 9 months it looked as though we were going to see a median price for the year well over $600,000, but sales in the last quarter were skewed to the lower end.”
Since the beginning of December, however, sales have moved to the higher end. Of the 14 offers accepted since then, 1 was listed over $3 million, 2 between $1.5 and $2 million, 3 from $1-1.5 million, and one more at just under $1 million.
Maybe my expectation for activity at the higher end in Marblehead in 2015 was just a case of being a year early. The evidence of recent months suggest that 2016 may be the year when the higher end really does see the increased activity I have been expecting for a while. (more…)
Swampscott 2015 Housing Market Summary
In addition to my more detailed reports I am publishing this summary showing just the main numbers.
For more details on the SFH market read Swampscott 2015 Housing Market review and for condos Swampscott 2015 Condo market review.
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.
Read How should I choose the broker to sell my home?
Andrew Oliver is a Realtor with Harborside Sotheby’s International Realty. Each Office Is Independently Owned and Operated
You can REGISTER to receive email alerts of new posts on the right hand side of the home page at www.OliverReports.com.
@OliverReports
2015 Swampscott housing market review
This 2015 Swampscott housing market review focuses on the Single Family Home (SFH) market. I shall publish a separate report on the condo market. I have also published a one page Summary of the main numbers.
For the year sales increased 10% to a new record, while the median price increased 5%, but is still some 11% below the 2005 peak. 2005 was, however, an exceptional year (read What happened in Swampscott in 2005?) and the 2015 level was the second highest reported. I suggested in my mid-year review that the shortage of inventory should lead to higher prices in the second half of the year and that did, indeed, occur, with a strong finish to the year in Q4.
Median price
Sales
Sales were a record in 2015, beating the previous peak of 170 in 2004.
Sales at the higher end has been impacted by Swampscott’s high tax rate, so it was encouraging to see a sharp increase in sales above $1 million in 2015:
ASR*
Even though Swampscott had a significant increase in its Assessed Values last year, the ratio of AV to Sale Price (see below for an explanation) increased only to 90.5%, meaning that the median sales prices was 10% (100/90.5) above the new Assessed Values.
Comment
Swampscott continues to see new development and conversions, and its proximity to Boston, whether by commuter train or the T from Wonderland, ensures that the market remains attractive to those who accept the trade off with higher taxes.
* One way I measure prices is by the ratio (ASR) of Assessed Value (AV) to Sales Price (SP). The ASR is the AV divided by the SP: if the SP is rising (prices going up), the ASR will fall.
Properties selling above their AV will have an ASR below 100%. What this means is that in a period of rising prices the ASR is likely to be falling. So what we, as homeowners, want is an ASR below 100% and falling.
Remember that AVs are a lagging indicator: the tax bills that have just been sent out for FY2016 are based on actual sales in 2014. Thus the 2015 sales data, reported in this review, will be the basis for FY2017 assessments.
What happened in Swampscott in 2005?
While housing markets in Boston and places like Cambridge have been hitting new highs for the last 2-3 years, it takes time for higher prices to ripple further out. When the final numbers are tallied, the median price in Essex County in 2015 will be within about 1% of its peak, with many towns already reaching new highs. In Swampscott, however, the median price is still 11% below its peak, leading me to ask: what happened in Swampscott in 2005?
Price mix of sales
Only a very small percentage – 5% or less – of SFHs change hands each year, so while the median price of those that do sell can and does provide a good indication of the market, there is always the possibility that sales in any year will not be reflective of the overall housing market. It is for the same reason that we see quarterly fluctuations in median prices when sales in any quarter are skewed to a particular price range. These fluctuations do, however, tend to even out over time.
I looked at the sales in Swampscott for 2005 and compared them with the years either side. This is what I found: the biggest difference was that sales under $400,000 – which were 34% of the total in 2004 and 39% in 2006 – were only 20% in 2005. Conversely, sales over $500,000 were 53% in 2005, compared with only 35% in 2004 and 34% in 2006.
My conclusion is that 2005 was an outlier in terms of its sales mix. Had 2005 seen a more normal mix of sales, then the median price would have been somewhere in the mid $400s and we would now be talking of a market close to its previous peak.
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.
Read Which broker should I choose to sell my house?
Andrew Oliver is a Realtor with Harborside Sotheby’s International Realty. Each Office Is Independently Owned and Operated
You can REGISTER to receive email alerts of new posts on the right hand side of the home page at www.OliverReports.com.
@OliverReports
Garbage In Garbage Out – Govt corrects construction data
The Commerce Department’s November construction spending report contained the following footnote: “Monthly and annual estimates… for January 2005 through October 2015 have been revised to correct a processing error in the tabulation of data on private residential improvement spending.”
No big deal, right, since it was just a processing error and mentioned only in a footnote. But read this: “The upward revision to spending in 2014 is enough to raise growth that year from 2.4% to 2.6%-2.7%,” wrote IHS Global Insight US economist Patrick Newport in a research note. “The revisions are likely to boost growth for 2015 as well.” (more…)
El Nino: warmer than what?
I have written before about how this year’s forecast of warmer than normal weather in the Northeast could be good news for real estate markets, but this week’s brutally cold snap raises the question, El Nino: warmer than what?
I am sure my daughter got bored, as she was growing up, of hearing me say how important it was to understand the difference between relative and absolute. Thus, if the temperature tomorrow morning is say 15 degrees, it will be relatively warmer than today’s 8 degrees, but it will still be absolutely freezing.
Looking for guidance as to what to expect for the next three months I spotted this January-March 2016 outlook from the Weather Company, thanks to wunderground, my favourite source for weather information.
The report mentions the “potential for a significant cold snap in parts of the central and eastern states starting in the middle portion of January”, but goes on “… however, there are several other factors in the atmosphere, operating on shorter time scales, that can, at times, oppose the overall three-month trend.”
OK so now I am starting to struggle with the forecast. It doesn’t get any easier: “An individual cold front or an upper ridge of high pressure can lead to a brief period of colder or warmer weather, respectively, that bucks the overall three-month trend. The same front or area of high pressure can bring a brief period of enhanced precipitation or dry spell that may or may not be indicative of the overall trend that is forecast.”
I know this is blog is meant to be rated G but I could not help noticing the reference to PV – Polar Vortex – in the following: An Icelandic storm .. tugged above-freezing air to the North Pole between Christmas and New Year’s Eve. “The rapid and unexpected destruction of the tropospheric* polar vortex, via the historically strong North Atlantic storm this week, has thrown a significant monkey wrench into the January forecast.”
OK so I think I have this clear. In the Northeast the weather is going to be warmer this winter
unless that Polar Vortex thingy does something or other in which case it will be
colder. And neither warm nor cold spells should be taken as a guide to the weather for the rest of the winter.
I love science: it is so precise.
*I know you know this but just in case it has slipped your mind, “the troposphere is the lowest layer of Earth’s atmosphere and site of all weather on Earth. The troposphere is bonded on the top by a layer of air called the tropopause, which separates the troposphere from the stratosphere, and on bottom by the surface of the Earth.”
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.
Read Marblehead 2015 Housing Market review and Marblehead 2015 Condo Market review. Further 2015 reviews will be published shortly.
Andrew Oliver is a Realtor with Harborside Sotheby’s International Realty. Each Office Is Independently Owned and Operated
You can REGISTER to receive email alerts of new posts on the right hand side of the home page at www.OliverReports.com.
@OliverReports
2015 Marblehead Condo market review
The highlights of this 2015 Marblehead Condo market review are that sales recovered back to their 2008 level, while the median price – which must always be treated with caution in a small market such as Marblehead – declined slightly. Note the analysis of sales a little further on in this report. Click here to read my review of the Single Family market.
Sales
In the years from 2000-2006, sales of condos in Marblehead averaged 71 a year; from 2007-2014 that number dropped to 43. The 53 recorded in 2015, while the best since 2008, was still well below the levels from the early 2000s.
Median Price
Because of the small number of sales and seasonal variation (weather!) I do not report on quarterly numbers for condo sales. Marblehead condo market analysis is further complicated by the fact that there are two very different markets: the older, former 2-4 apartment buildings; and the newer, purpose-built (including some harbor front) condos.
Here is a chart of the last 5 years. Note the low numbers for 2012 and the first half of 2015 and then look at the tables below the chart.
The table below shows how in 2012 sales under $300,000 accounted for 62% of the total, while in 2013, 2014 and 2015, sales under $300,000 averaged 42% of the total. That tells us that the median price in 2012 was skewed downwards by the unusually high number of lower priced sales.
2015 was a good example of the bifurcation of the condo market in Marblehead, with a median price of $241,000 in the first half and $340,500 in the second half. So let’s look at the breakdown of sales:
In H1, 10 of 18 sales – 56% – were under $250,000, while in H2 only 8 of 35 sales – just 23% – were in that price range. Here again we see evidence of how the median price can be influenced by the breakdown of sales.
In Marblehead in 2015 sales of condos took place from $120,000 to $1.3 million. What this report confirms is that there is no “condo market” as such in Marblehead, but a number of different types of condos, the number of each of which coming on the market varies from year to year.
Assessed Value to Sales Ratio (ASR)*
See below for a fuller explanation of ASR, but if sales take place above Assessed Values, then the Ratio will be below 100%. In 2015, the median ASR was 85.8%, which means that the median condo sold for 17% more than its Assessed Value.
Supply
Even Marblehead was not immune to the challenges faced more widely in the condo market during the great recession, when financing became much more difficult for condos, particularly in mixed use and older developments. In July 2009 there were 50 condos for sale in Marblehead, but that number has dropped sharply in the last few years:
Conclusion
The supply of condos for sale in Marblehead has dropped, while there are few new condos being built or converted.That is a formula for higher prices.
* One way I measure prices is by the ratio (ASR) of Assessed Value (AV) to Sales Price (SP). Properties selling above their AV will have an ASR below 100%. What this means is that in a period of rising prices the ASR is likely to be falling. The ASR is the AV divided by the SP: if the SP is rising (prices going up), the ASR will fall. So what we, as homeowners, want is an ASR below 100% and falling.
Remember that AVs are a lagging indicator: the tax bills that have just been sent out for FY2016 are based on actual sales in 2014. Thus the 2015 sales data, reported in this review, will be the basis for FY2017 assessments.
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.
Read Which broker should I choose to sell my house?
Andrew Oliver is a Realtor with Harborside Sotheby’s International Realty. Each Office Is Independently Owned and Operated
You can REGISTER to receive email alerts of new posts on the right hand side of the home page at www.OliverReports.com.
@OliverReports
2015 Marblehead housing market review
This 2015 Marblehead housing market review focuses on the Single Family Home (SFH) market. I have published a separate Marblehead 2015 condo market review.
In summary, sales were down modestly from last year – at 239 vs 245 – and the median price was up slightly at a new record $596,500, compared with $590,000 in 2014.
It is important to bear in mind that only around 4% of Marblehead’s SFHs change hands publicly in any year, but 4% is a reasonable sample, with sales taking place from $267,000 to $4.6 million.
And there is seasonality in the market, as you will see from looking at the quarterly median price numbers which ranged from $535,000 to $660,000.
Median price
The first chart, with the numbers below, shows the median price for the two halves of the year and for the full year. The $614,500 median price in the second half of 2015 was a new record, beating the $600,000 in 2014, which was the first time Marblehead recorded a median price of $600,000 in any half-year.
The quarterly numbers show how the market can vary. After 9 months it looked as though we were going to see a median price for the year well over $600,000, but sales in the last quarter were skewed to the lower end. In Q3 the median price finally broke the old record for any quarter, the $645,000 recorded in Q3 2006. Ironically, that quarter was followed by a quarter with a median price of $539,950, a difference of 16%, while in 2015 the change from Q3 to Q4 was 17%.
Sales
Sales were modestly down from last year, but were still the second highest total since 2004:
The tables show the breakdown in sales by price for the last three years. First overall sales.
The next tables break down sales in more detail. First, sales under $600,000. In 2014 and 2015, 51% of sales were under $600,000, evidence confirming that the median price (that at which 50% are higher and 50% lower) was also just under $600,000. Note that in 2013, 63% were under $600,000, indicating that the median price was well below $600,000 (it was $535,000).
As prices ( and buyers) moved up so the percentage in the next brackets increased. As in the lower bracket, the main change occurred in 2014 (when the median price increased 10%), while there was little change from 2014 to 2015:
That pattern – the big change from 2013 to 2014, with 2015 being pretty stable, was also seen in sales at $1 million and above. Perhaps the biggest surprise of 2015 was that the top end did not see more sales. There was, however, increased activity towards the end of the year, and I will write a separate report on that segment of the market;
Assessed Value to Sales Ratio (ASR)
One way I measure prices is by the ratio (ASR) of Assessed Value (AV) to Sales Price (SP). Properties selling above their AV will have an ASR below 100%.
As we all hope out properties are worth more than the AV we look for an ASR below 100% as a positive sign. Remember that AVs are a lagging indicator: the tax bills that have just been sent out for FY2016 are based on actual sales in 2014. Thus the 2015 sales data, reported in this review, will be the basis for FY2017 assessments.
What this means is that in a period of rising prices the ASR is likely to be falling. The ASR is the AV divided by the SP: if the SP is rising (prices going up), the ASR will fall. So what we, as homeowners, want is an ASR below 100% and falling.
Let’s look at the ASR in recent years:
Source: MLS, Oliver Reports
The ASR has fallen steadily since 2009. At 87.4% in 2015, the median house in Marblehead sold for 14% (100/87.4 – 1) above its Assessed Value. I was surprised that AVs did not increase more for the FY2016 tax bills that have just gone out, but I am confident that AVs will increase in FY2017 by more than they did in FY2016, but that’s a subject for another report.
Outlook for 2016
I am, of course, an optimist, but there are several reasons to expect a strong market in 2016:
– historically, when mortgage rates start to move up, buyers are active, fearing they may miss the low rates
– the winter is unlikely to be as harsh as the last two, so there may not be the same economic slowdown in the first quarter
– the Massachusetts economy continues to do well
– with the boom in Boston, prices here look even more attractive
– and finally, supply, of which there is very little. Currently, there are just 42 SFHs for sale in Marblehead, and only 6 of them (!) are under the 2015 median price!
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.
Read How should I choose the broker to sell my home?
Andrew Oliver is a Realtor with Harborside Sotheby’s International Realty. Each Office Is Independently Owned and Operated
You can REGISTER to receive email alerts of new posts on the right hand side of the home page at www.OliverReports.com.
@OliverReports
Open Houses 11, Patriots?? Many more, we hope.
Real estate agents aren’t dummies. With the Pats playing the Dolphins today at 1 pm, there are just 11 Open Houses – SFHs and Condos – in Marblehead, Beverly, Salem and Swampscott combined – and all but 1 of them start before the Pats kick off at 1 pm. (more…)
Solar tax credits extended for 5 years
In my Solar panels: are they right for you? article in September I referred to the fact that the federal tax credit for solar panels was due to expire in 2016. Well, in the recent budget, solar tax credits were extended for 5 years. (more…)
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