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
A round-up of the week’s national housing news
The National Association of Realtors (NAR) reported that its national Pending Home Sales Index in April rose 10.3% from a year ago, with the Northeast region jumping 17.7%.
Read press release
Meanwhile, existing home sales reported by the NAR,increased slightly in April to an annual rate of just under 5 million, up nearly 10% from a year ago.
Read press release (more…)
New home prices jump 15% to all-time record high
Figures from the Commerce Department this week show that the median price of a new home in the US in April rose 15% Year on Year to reach a new all-time record of $271,600.
During the recent recession, new home sales collapsed from an annual rate of 1.4 million in July 2005 all the way to just 273,000 in February 2011.
As homebuilders are once again starting to crank up production, that rate has recovered to 454,000 in April, at which time there was 4.1 months of supply.
New home sales represent 7% of the US housing market, so are less significant than existing home sales, but are important because only by building new homes can we meet the demand from new household creation.
The good news is that new home construction (both single and multi family) was running at an annual rate of 850,000 in April, while new permits topped 1 million.
The impact of strong demand and low supply can be clearly seen in this chart from Haver Analytics:
What Women Want
No, not an agony column, and no I don’t have the answer. But when women say “we need to talk” about housing choices, a quick read of this article on HSH’s website may give a man some hints.
Home buying bridges the gender gap
All-time one-day record for homes Under Agreement throughout Massachusetts
Tuesday, May 21st, 2013 saw an all-time record for the number of homes going Under AGreement (UAG). In Marblehead alone the number almost doubled to 69 and the same pattern was duplicated throughout the State.
Does this mean that we should be wondering if Massachusetts is entering a housing bubble, as some were concerned in Los Angeles earlier this year? What is going on? (more…)
Record visits to OliverReports.com this weekend
Maybe it was the subject matter – the upper end of the market – but whatever the reason my blog had a record number of visits this weekend.
If you stumbled on my site by chance, please either “friend” Oliver Reports on Facebook or sign up at www.OliverReports.com for email alerts of new postings.
I publish one or more articles every Saturday on a variety of real estate related topics. My goal is to make the articles short and topical.
As my home page says, Oliver Reports is: “The source for Marblehead and North Shore real estate news.”
And I also publish comments on the Boston market from time to time because of the influence that market has on the entire region.
Where have all the buyers gone?
Wait a minute, don’t I mean sellers? Isn’t the lament – posted here and everywhere else – that the housing market is being held back by the lack of sellers?
Well, yes, that is certainly true at lower price levels. In MHD, for example,there are just 16 Single Family Homes (SFHs) available for sale under $500,000, compared with a total of Sold, Under Agreement and with an Accepted Offer (SUAGAO) of 59 so far this year. That works out to less than 2 months of supply, when 6 months is regarded as a stable market.
But while the market at the higher end is booming in Boston and robust elsewhere, buyers at $1.5 million and above seem largely to have given the North Shore a pass, at least so far.
Here are some numbers I ran yesterday for Marblehead which I found startling. So far this year, the number of SFHs under $1.5 million that had either Sold, were Under Agreement or had an Accepted Offer (SUAGAO) was 124. The number available for sale was just 59, so sales and pending sales were more than twice the available supply.
Now let’s look at SFHs at $1.5 million and above. The number available was 35 – or more than half the number under $1.5 million. But the number that have sold or received an accepted offer (SUAGAO) was….4. Let’s be explicit. If sales at this level were at the same pace as sales below $1.5 million the number of sales and accepted offers would be 73. But it is just 4. (more…)
Waterfront property in Marblehead $1 million below Assessed Value
One of the surprises to me this year has been the relatively low level of activity in Marblehead waterfront property. I know there is quite a lot of supply, but with the top end hitting new highs in Boston and other cities it does seem that there is an opportunity to buy wonderful property at a great price. As my attorney said to me when I closed on my house many years ago: “they can’t make any more waterfront”.
Recently a beautifully elegant waterfront property came on the market for $1 million below its Assessed Value. The house does need some updating – and I know from personal experience how much it can cost to restore an old house – but if you are in the market for a traditional, New England waterfront property, this is well worth a look.
I’d love to tell you more about this house but apparently it would be a breach of ethics for me to do so as I might be deemed to be recommending a property listed by another Realtor. Go figure.
While there may appear at first glance to be a lot of waterfront homes for sale at the moment, the detailed analysis that a buyer at this level would undertake quickly shows that there are several different categories, by location, condition and style for example, that whittle the number down rapidly when a buyer’s criteria are considered.
And as I point out in another post this morning, the buyers at the upper end are active elsewhere. Surely the delights of summer on the water in Marblehead will attract buyers soon!
Would you like four years of college tuition payments with that mortgage, madam?
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. Total interest payments on a 30 year loan at 3 5/8 % come to over $320,000. At today’s rate of 2 7/8 %, the total on a 15 year loan would be just……$116,000. That’s a saving of $204,000 !!! Yay, Harvard for free! (more…)
Home prices down nearly 30% !!!!
What, you missed the news which was reported this week? Perhaps you were too focused on watching the stock market reach record highs.
This week’s Case-Shiller report included the following: “Measured from their June/July 2006 peaks, the peak-to-current decline for both Composites is approximately 29-30%. The recovery from the early 2012 lows is 8.7% and 9.3%, respectively.”
In simple terms, while prices nationally are up nearly 10% from their lows, they are still DOWN almost 30% from their 2006 highs.
To put that in stock market terms in a week when the Dow Jones Industrial Average broke 15,000, the equivalent for housing would be 10,500. That doesn’t sound so good. (more…)
The Flaws of the Case-Shiller Index
When the Case-Shiller index, the most widely quoted index of housing prices, reported this week Read report that home prices rose 8.6% for its 10-City index and 9.3% for the 20-City index for the year to February, the news was greeted with headlines such as CBS’s “Us Home Prices Surging”.
Well, as the Beach Boys sang a long while ago, “You Know I hate to be a Downer”, but this is a good time to remind everybody that, as I have mentioned regularly in my year end reviews, the Case-Shiller Index has serious flaws.
Dan Green in his The Mortgage Reports (www.TheMortgageReports.com) takes up the argument this week, pointing out that:
“1.The Case-Shiller Index tracks values of detached, single-family homes only
2.The Case-Shiller Index includes sales of discounted, distressed homes
3.The Case-Shiller Index publishes on a 2-month time delay
In this way, the Case-Shiller Index ignores multi-unit homes and condos; and allows its findings to be dragged down by foreclosures and short sale which sell at discounts of 20%; while applying price data from contracts written as many as 5 months ago.
Furthermore, the home index falls apart when we consider its limited scope. All real estate is local, yet the Case-Shiller Index tracks 20 U.S. cities and calls itself a “national” index. There are 3,100 municipalities in the United States. The Case-Shiller Index accounts for fewer than 1 percent of them.” (more…)
Where have all the sellers gone?
While median prices in Massachusetts continued to rise in March (Single Family Homes up 7.8%, condos up 8%), a lack of homes for sale contributed to a 3.3% decrease in year over year sales (although last year we really had no winter) for SFH, while condo sales were up 2.5%.
A continuing concern is the shortage of homes for sale, with inventory down 30% from a year ago for SFHs and 34% for condos, translating into 5.1 and 4.3 months’ supply respectively. (more…)
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