Open Houses this weekend
It may be the busiest travel weekend but there are still a few Open Houses (and remember to check back at 8 a.m. tomorrow for an updated list for Sunday:
Click on these links for details (Saturday OHs are shown first):
Marblehead Open Houses
Swampscott Open Houses
Salem Open Houses
Beverly Open Houses
Lynn Open Houses
and Other towns to search towns not listed above.
Andrew Oliver
Market Analyst | Team Harborside | teamharborside.com
REALTOR®
Sagan Harborside Sotheby’s International Realty
One Essex Street | Marblehead, MA 01945
m 617.834.8205
www.OliverReports.com
www.TeamHarborside.com
Andrew.Oliver@SothebysRealty.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
Pre-Revolutionary Marblehead: Open House TODAY
There is an Open House today, 11:30-1:00, for this Pre-Revolutionary Marblehead house. It is a perfect blend of old and new – and even has a double garage.
Andrew Oliver
Market Analyst | Team Harborside | teamharborside.com
REALTOR®
Sagan Harborside Sotheby’s International Realty
One Essex Street | Marblehead, MA 01945
m 617.834.8205
www.OliverReports.com
www.TeamHarborside.com
Andrew.Oliver@SothebysRealty.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
Open Houses Sunday November 24
Grab your rain gear as you head out to these Open Houses:
Click on these links for details
Marblehead Open Houses
Swampscott Open Houses
Salem Open Houses
Beverly Open Houses
Lynn Open Houses
Click Other Towns to search towns not listed above.
Andrew Oliver
Market Analyst | Team Harborside | teamharborside.com
REALTOR®
Sagan Harborside Sotheby’s International Realty
One Essex Street | Marblehead, MA 01945
m 617.834.8205
www.OliverReports.com
www.TeamHarborside.com
Andrew.Oliver@SothebysRealty.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
EXPERIENCE MARBLEHEAD AT ITS FINEST IN THIS AUTHENTIC “OLD TOWN” COLONIAL
7 Middle Street,Marblehead, Massachusett Open House: Sunday 11:30-1:00 PM Or call me on 617.834.8205 for a private showing.
Time-honored properties occupy a different place in the world than do other homes. Homes that have acquired charm, quirks, and storied pasts add their own lives to yours.
We take great pride in presenting 7 Middle St, in Marblehead. This thoughtfully updated antique offers timeless appeal at every turn.
Offered at $799,900 | 4 BR | 2.5 BA. LEARN MORE
Andrew Oliver
Market Analyst | Team Harborside | teamharborside.com
REALTOR®
Sagan Harborside Sotheby’s International Realty
One Essex Street | Marblehead, MA 01945
m 617.834.8205
www.OliverReports.com
www.TeamHarborside.com
Andrew.Oliver@SothebysRealty.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
Open Houses weekend November 23/24
Here are this weekend’s Open Houses. Check back tomorrow at 8 a.m. for an updated list for Sunday.
Click on these links for details (Saturday’s OHs are shown first)
Marblehead Open Houses
Swampscott Open Houses
Salem Open Houses
Beverly Open Houses
Lynn Open Houses
Click Other Towns to search towns not listed above.
Andrew Oliver
Market Analyst | Team Harborside | teamharborside.com
REALTOR®
Sagan Harborside Sotheby’s International Realty
One Essex Street | Marblehead, MA 01945
m 617.834.8205
www.OliverReports.com
www.TeamHarborside.com
Andrew.Oliver@SothebysRealty.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
How is Marblehead’s 2020 Property Tax rate calculated?
This article, which explains how the tax rate is calculated, is a follow up to Marblehead 2020 Tax Rate drops sharply
The formula is actually very simple: take the $ amount of the previous year’s tax levy, add 2.5% for Proposition 2 1/2, and also add any new growth (such as new construction or a condo conversion). This figure is the new tax levy. To this figure is added debt service – the Principal and Interest payable on the town’s debt.
Here are the numbers for Fiscal Year 2019 and 2020, remembering that the FY runs from July to June.
The Tax Levy calculation
The dollar amount raised by the property tax will increase year by year. That is because of the formula: last year’s number plus 2.5% plus new growth. In the table above you can see how the FY 2019 tax levy of $61,400,179 becomes the base for FY 2020. Add $1,535,004 for Prop 2.5% and $303,231 for new growth and the new figure is $63,238,414. To this number is added the debt service – Principal and Interest on the town’s debt, much as homeowners pay P&I on their mortgage – to give a total amount to be raised of $69,809,220.
The Tax Rate
The actual tax rate depends upon the total Assessed Value of all property: residential, commercial and personal. The tax rate is calculated by dividing the total dollar amount to be raised by the total Assessed Value of all property. Thus, while the $ amount raised by the tax (and therefore the median tax bill) will increase each year, the headline tax rate will fluctuate depending upon the direction of Assessed Values.
In simplistic terms, the $ amount raised before debt service will increase by a little more than 2 1/2% each year, so if the median Assessed Value also increases by a little more than 2 1/2% the tax rate will be unchanged. If the increase in Assessed Values is less than 2 1/2%, then the tax rate will rise. And if the increase in Assessed Values is more than 2 1/2% then the tax rate will rise. One other variable is the cost of debt service.
In FY 2019 the tax rate was $10.74, achieved by dividing the almost $67.8 million to be raised by the $6.3 billion of Assessed value. And in FY 2020 the calculation is $69.8 million divided by $6.7 billion, which produces a rate of $10.39. While the tax rate will decline in 2020, the median tax bill, based on the higher Assessed Values, will increase by $236, or 3.5%, to $7,003.
Note that the calculation of the tax rate is made simpler by the fact that Marblehead’s Board of Selectmen votes each year to have a single tax rate for both residential and commercial tax. In towns which elect to have a differential rate – i.e. by taxing commercial property at a higher rate than residential – there are generally two different tax rates, achieved by dividing the amount to be raised from residential and commercial taxpayers by their respective aggregate Assessed Values.
How does debt service affect the tax rate?
The announced property tax rate announced each year includes the cost of debt service, which Marblehead tries to keep to 10% or less of the total tax bill.
The historic link between tax rates and median prices
This chart shows the tax rate for each Fiscal Year together with the median price for the year used for the calculation (e.g. the median price for 2018 is used for the 2020 tax rate).
Remember that for the tax rate to go down, Assessed Values have to increase by more than the approximately 2 1/2% that the total tax levy will increase each year.
What is the outlook for FY 2021?
The residential real estate market in Marblehead has been firm again in 2019 (and 2020 prices will be the basis for the FY 2021 tax rate). At this stage it looks as though the SFH median price will be around $710,000, a modest 3% increase from 2018’s $689,500. But bear in mind this is the median price of the roughly 240 SFHs that will sell this year out of the more than 6,200 SFHs in Marblehead. This does not imply that the Town’s Assessed Value will increase by 3%, including as it does all types of property.
Nevertheless, it seems reasonable at tis stage to expect that the tax rate in FY 2021 will be similar to that for FY 2020.
Andrew Oliver
Market Analyst | Team Harborside | teamharborside.com
REALTOR®
Sagan Harborside Sotheby’s International Realty
One Essex Street | Marblehead, MA 01945
m 617.834.8205
www.OliverReports.com
www.TeamHarborside.com
Andrew.Oliver@SothebysRealty.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
New Listings week ending November 22
Here are the new listings over the last week:
Click on these links for details:
Marblehead New Listings
Swampscott New Listings
Salem New Listings
Beverly New Listings
Lynn New Listings
and click Other Towns to search towns not shown above.
Andrew Oliver
Market Analyst | Team Harborside | teamharborside.com
REALTOR®
Sagan Harborside Sotheby’s International Realty
One Essex Street | Marblehead, MA 01945
m 617.834.8205
www.OliverReports.com
www.TeamHarborside.com
Andrew.Oliver@SothebysRealty.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
Marblehead 2020 Tax Rate drops sharply
This is a good news, bad news story.
The good news: the tax rate for Fiscal Year 2020 (July 1, 2019 to June 30, 2020) will drop from $10.74 to $10.39.
The bad news: taxes paid are going up. The median Single Family Home assessed value increased 7% from $630,000 to $674,000, resulting in a 3.5% increase in the median tax bill from $6,766 to $7,003.
Remember that assessments for 2020 are based upon prices achieved in 2018.
What about Prop 2 1/2, you may ask?
Prop 2 1/2 refers to the entire tax bill in dollars. Take last year’s taxes, add 2 1/2% plus new growth, add in the cost of debt exclusions, and that produces the dollar amount for the following year.
Now take that amount and divide by the assessed value to get the tax rate. That is the rough formula. In towns like Marblehead, there is one rate for all types of property. Other towns choose to tax commercial property at a higher rate.
But sticking to Marblehead, getting the dollar amount to be raised each year is fairly easy. The main variable is the assessed value. In a year when the assessed value goes up sharply, as in 2020 when the median assessed value will increase by 7%, the tax rate will go down, because one is dividing the dollar amount raised by a larger figure.
This simplistic table illustrates how the calculation is made:
The first column represents Taxes of $100,000 to be achieved from an assessed value of $10,000 (I am ignoring mill rates to make the example simpler). $100,000 divided by $10,000 produces a tax rate of $10.00.
The second column shows a 2.5% increase in taxes to $102,5000, and an increase in assessed value to $10,500. Divide one by the other and the tax rate drops to $9.76 – but the dollar amount raised goes up. This is the scenario in Marblehead for 2020.
The third column shows what happens if assessed values go down. The amount to be raised it still $102,500, but dividing this by the reduced assessed value of $9,500 produces a tax rate of $10.79.
The bottom line is that taxes paid nearly always go up. Not universally: in any year some will go up, some down and some stay the same.
But at least now you know that in all probability, when you get that tax bill just before year end, although the tax rate will be going down, your tax bill will be going up.
I shall publish a more detailed explanation of the 2020 Marblehead tax rate in due course, along with tax rates for all 34 cities and towns in Essex County as they are announced in coming weeks. Click Property Taxes to go to the section of the blog with information about property tax rates throughout Essex County.
Andrew Oliver
Market Analyst | Team Harborside | teamharborside.com
REALTOR®
Sagan Harborside Sotheby’s International Realty
One Essex Street | Marblehead, MA 01945
m 617.834.8205
www.OliverReports.com
www.TeamHarborside.com
Andrew.Oliver@SothebysRealty.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
This is Not 2008 All Over Again: The Mortgage Lending Factor
According to this Keeping Current Matters article : Some are afraid the real estate market may be looking a lot like it did prior to the housing crash in 2008. One of the factors they’re pointing at is the availability of mortgage money. Recent articles about the availability of low-down payment loans and down payment assistance programs are causing concern that we’re returning to the bad habits of a decade ago. Let’s alleviate the fears about the current mortgage market.
The Mortgage Bankers’ Association releases an index several times a year titled: The Mortgage Credit Availability Index (MCAI). According to their website:
“The MCAI provides the only standardized quantitative index that is solely focused on mortgage credit. The MCAI is…a summary measure which indicates the availability of mortgage credit at a point in time.”
Basically, the index determines how easy it is to get a mortgage. The higher the index, the more available the mortgage credit.
Here is a graph of the MCAI dating back to 2004, when the data first became available:
As we can see, the index stood at about 400 in 2004. Mortgage credit became more available as the housing market heated up, and then the index passed 850 in 2006. When the real estate market crashed, so did the MCAI (to below 100), as mortgage money became almost impossible to secure.
Thankfully, lending standards have eased since. The index, however, is still below 200, which is half of what it was before things got out of control.
Bottom Line
It is easier to get a mortgage today than it was immediately after the market crash, but it is still difficult. The difference in 2006? At that time, it was difficult not to get a mortgage.
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Keeping Current Matters, Inc. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
Andrew Oliver
Market Analyst | Team Harborside | teamharborside.com
REALTOR®
Sagan Harborside Sotheby’s International Realty
One Essex Street | Marblehead, MA 01945
m 617.834.8205
www.OliverReports.com
www.TeamHarborside.com
Andrew.Oliver@SothebysRealty.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
New Listings mid-week November 20
Here are the most recent New Listings.
Click on these links for details:
Marblehead New Listings
Swampscott New Listings
Salem New Listings
Beverly New Listings
Lynn New Listings
and click New Search to check on other towns.
Andrew Oliver
Market Analyst | Team Harborside | teamharborside.com
REALTOR®
Sagan Harborside Sotheby’s International Realty
One Essex Street | Marblehead, MA 01945
m 617.834.8205
www.OliverReports.com
www.TeamHarborside.com
Andrew.Oliver@SothebysRealty.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
7 Middle St in Boston Magazine
“To survive the long, frigid days of New England winter, we want a homebase that feels warm and cheerful on even the most below-zero of nights. Thankfully, this Marblehead Colonial is essentially the real estate version of a HappyLight. Not only does 18th-century charm permeate the original beams and floors, but vibrant splashes of color amp up the energy in each room. Not to mention, a total of six fireplaces radiate heat throughout the four bedrooms, the living room, and the kitchen. Prepare to canoodle away those winter days.”
Offered at $799,900 | 4 BR | 2.5 BA
Read Boston Magazine’s article on 7 Middle Street
Andrew Oliver
Market Analyst | Team Harborside | teamharborside.com
REALTOR®
Sagan Harborside Sotheby’s International Realty
One Essex Street | Marblehead, MA 01945
m 617.834.8205
www.OliverReports.com
www.TeamHarborside.com
Andrew.Oliver@SothebysRealty.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
Recession: what Recession?
It is only a short 3 months ago (well I guess in political terms that’s almost a lifetime) that all the pundits were cautioning – not of course forecasting – that a recession was possible.
Since the yield on the 10-year Treasury is the most sensitive to the economic outlook, and since mortgage rates are based on the 10T yield, mortgage rates followed the drop in the yield on 10T, but only to a limited extent.
Basically, the 30-year fixed Rate Mortgage rate went from 4.5% at the beginning of the year to 4% in June and 3.5% around Labor Day, when R talk was all the rage amongst commentators.
So what has happened recently? (more…)
Open Houses Sunday November 17
Here are today’s Open Houses:
Click on these links for details:
Marblehead Open Houses
Swampscott Open Houses
Salem Open Houses
Beverly Open Houses
Lynn Open Houses
And click Search any town to find Open Houses in other towns.
Andrew Oliver
Market Analyst | Team Harborside | teamharborside.com
REALTOR®
Sagan Harborside Sotheby’s International Realty
One Essex Street | Marblehead, MA 01945
m 617.834.8205
www.OliverReports.com
www.TeamHarborside.com
Andrew.Oliver@SothebysRealty.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
Open Houses weekend November 16/17
Here are the weekend’s Open Houses. Check back tomorrow at 8 am for an updated list for Sunday.
Click on these links for details (Note the OHs are listed by date order, today’s first, then tomorrow’s):
Marblehead Open Houses
Swampscott Open Houses
Salem Open Houses
Beverly Open Houses
Lynn Open Houses
Andrew Oliver
Market Analyst | Team Harborside | teamharborside.com
REALTOR®
Sagan Harborside Sotheby’s International Realty
One Essex Street | Marblehead, MA 01945
m 617.834.8205
www.OliverReports.com
www.TeamHarborside.com
Andrew.Oliver@SothebysRealty.com
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
New Listings week ending November 15
New listings are slowing as the holidays near and the temperature drops:
Marblehead New Listings
Swampscott New Listings
Salem New Listings
Beverly New Listings
Lynn New Listings
Andrew Oliver
Market Analyst | Team Harborside | teamharborside.com
REALTOR®
Sagan Harborside Sotheby’s International Realty
One Essex Street | Marblehead, MA 01945
m 617.834.8205
www.OliverReports.com
www.TeamHarborside.com
Andrew.Oliver@SothebysRealty.com
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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