Beware first quarter housing market reports
Another one for the “Lies, Damned Lies and Statistics” file. (And I hope another reason to read my blog regularly to avoid being mislead.)
You may well see a report saying that the median price in Marblehead increased 19% from last year, which is the MLS figure including all sales. My numbers, which always exclude distressed sales, show a 17% increase. But it is important to know that quarterly numbers vary greatly.
Look at these numbers for Marblehead since 2010. They clearly show that Q1 2013 was well below the rest of the year. I am not saying that the Q1 number is not significant (see Buyers moving up the price chain). Just beware that Q1 a year ago was generally a low quarter.
Source: MLS, Oliver Reports
Housing inventory remains tight heading into Spring
With Spring rumoured to be coming soon (please!) here’s a look at the inventory awaiting buyers.
First Single Family Homes (SFHs). Although supply is a little higher than a year ago in actual numbers, it is slightly lower in terms of months of supply because the rate of sales increased over the last year. For the whole of Essex County supply is just under 3 months, or half the level regarded as a market in equilibrium between buyers and sellers.
The cold winter not only kept buyers indoors but also made it more difficult for sellers to get their houses ready for sale. The economy is improving, albeit still slowly, economic confidence seems to be improving, the stock market is at a high, and the likelihood is that mortgage rates will increase. Coupled with growing awareness that home prices are improving, I believe that 2014 could be a strong year for home prices on the North Shore. (more…)
Two free Marblehead concerts: Sergey Schepkin and Brahms Requiem
For my 200th blog post, I would like to draw your attention to two extraordinary musical offerings coming up shortly. Both will take place at Old North Church, 35 Washington Street , on Saturday, April 5 and Sunday, April 13.
Saturday, April 5 at 8:00 p:m: International pianist Sergey Schepkin will perform works by Bach, Schumann, Debussy and others in a concert to celebrate the restoration of Old North’s Steinway B piano. 
Read Restoration of a Steinway in Marblehead from the Marblehead Reporter.
And on Palm Sunday, April 13 at 7 p.m., the Old North Festival Chorus will perform the rarely heard Brahms Requiem. Written by Brahms after his mother’s death, this Requiem is not the traditional Latin liturgy celebrating the dead, but a full-bodied and full-blooded German celebration of the living. It is a work of epic proportions and this is an incredible musical offering, also free to the public. 
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 781.631.1223 or [email protected]. Andrew Oliver is a Realtor with Harborside Realty in Marblehead
Marblehead sale over $4 million – guess where?
A house in Marblehead sold this week for $4.15 million in a private transaction, according to the Salem Registry of Deeds.
Where was this? The Neck? Fluen Point? Peach’s Point?
The answer: none of the above. It was at the end of Bartlett Street in an area of town, Clifton, that has a number of ocean front properties but is not on the radar screen of many buyers.
The Clifton area runs from the Swampscott town line down to Goldthwait but for the purpose of this article I am going to refer to the coast as far as Ocean Avenue, leading to the Neck. And here is the secret. There are a lot of small streets that lead to the water and have 1 or 2 or maybe 3 or 4 houses sitting directly on the ocean at the end.
And for the most part these houses sit on the rocky Atlantic coast and are high enough that flooding is not a concern, while many of them face South, have great views of Ram Island and down the coastline, and are well protected from the nor’ easters that can impact more exposed areas.
In all I have found 29 properties on this coast with Assessed Values between $2 and $5 million. Two are currently for sale: one on Spray Avenue and one on Crown Way , both under $4 million.
Here’s a map of the area in two sections. First, from Preston Beach to Coolidge Road; secondly, from Coolidge to Ocean Ave.
Source: Town of Marblehead GIS
Source: Town of Marblehead GIS
Disclosure: I am the owner and listing agent for the house on Crown Way. The house on Spray Avenue is listed by J.Barrett & Company
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 781.631.1223 or [email protected].
Andrew Oliver is a Realtor with Harborside Realty in Marblehead
Senate passes House Flood Insurance Bill: President expected to sign it into law
After the usual round of negotiations the Senate this week passed, on a 72-22 vote, the Bill the House passed last week. The White House said that President Obama would sign it into law.
Here are the details of the Bill from my post last week: Bipartisan Congress votes to roll back impact of 2012 legislation
Reform of the National Flood Insurance program is needed. Here are my suggestions:
1. Do not try to include small, frequent losses caused by flooding throughout the country, and catastrophic major disasters, in one program. The NFIP is well suited for the former, and ill-suited for the latter.
2. Enforce the current requirement that properties in flood zones with federally insured mortgages carry flood insurance. Estimates vary, but the lowest I have seen is that 40% of such properties do not have flood insurance. Why not?
3. Flood insurance should stay with the property rather than the owner so that a sale does not trigger a change in flood insurance premiums (this is in the new Act).
4. Spend the necessary money to ensure that the flood maps used are accurate (they are not in Massachusetts).
After writing several articles on this topic in recent months, I hope that this will be my last for the foreseeable future. It has taken a while but common sense has finally prevailed in Congress. Now there is the opportunity to come up with a lasting solution to the question of flood insurance.
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 781.631.1223 or [email protected].
Andrew Oliver is a Realtor with Harborside Realty in Marblehead
Million Dollar home sales also picking up in Essex County
Two weeks ago I wrote about Million Dollar Home Sales picking up in Marblehead.
My thesis has been that the slowness of sales hitherto at the higher end in Essex County was in part at least the usual delay in activity and price increases rippling out from the centre, starting in Boston, moving to the nearer areas such as Brookline and Newton, and then reaching further out.
This week I have been looking at million dollar plus sales throughout Essex County to see if the same trend I spotted in Marblehead is happening more widely. It is.
Here’s the chart and table for 2000 to 2013.
Sources: MLS, Oliver Reports
The number of sales above $3 million has been pretty constant, while in the $1-2 million range there was a sharp drop before a recovery last year. Sales in the $2-3 million range, however, remain well down on the numbers of 2004-06 (but see below.)
Now let’s look at 2014. So far there are 43 sales and pending sales in the $1-2 million, range, 6 in the $2-3 million range, and 1 above $3 million.
And in Marblehead, since my last report, two $1 million plus properties have had offers accepted after being on the market for less than two weeks.
This activity at the higher end despite the brutally cold weather augurs well for sales – and maybe pricing – in 2014.
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 781.631.1223 or [email protected].
Andrew Oliver is a Realtor with Harborside Realty in Marblehead
Flood insurance: Bipartisan Congress votes to roll back impact of 2012 legislation
Both the Senate and House have passed bills on bipartisan votes (Senate 67-32, House 306-91) to reverse the impact of the 2012 Biggert-Waters Act. The Senate now has the option of either accepting the House Bill or seeking to negotiate the differences between the two Bills. Press reports on Friday indicated that Senate Majority Leader Harry Reid will schedule a vote next week on the House-passed legislation.
While I have heard no reports locally of sales affected by the threat of higher flood insurance premiums,the National Association of Realtors has estimated that some 40,000 sales nationally have been cancelled or delayed because of the confusion over the proposed changes under the 2012 Act. It is not possible to know, however, to what extent such confusion has contributed to buyers deciding not to make an offer on properties in flood zones.Certainly, questions have been asked.
Whereas the Senate Bill basically delays the impact of Biggert -Waters by up to 4 years, the House Bill deals directly with the most important issues.
The main features of the House Bill are:
– the sale of a property will no longer trigger the end of existing premium subsidies
– the restoration of grandfathering, which prevents a property’s rate from being increased if it is mapped into a higher risk zone
– mandating that the rate on any individual property cannot increase by more than 18% per annum.
The House Bill also levies a small fee ($25 for primary residences; $250 for secondary residences and businesses) on policyholders. According to the Congressional Budget Office the fee will make the House Bill revenue neutral, whereas the delays in the Senate Bill would result in the loss of $2 billion in revenues.
Another key feature for us in Massachusetts is that the House Bill requires FEMA to certify that its mapping process is technologically advanced and to notify and justify to communities that the mapping model it plans to use to create the community’s new flood map are appropriate.As I have previously reported, it has been alleged that FEMA has applied Pacific Coast mapping technology to Massachusetts.
The proposed legislation provides a stabilization while a longer-term solution to the finances of the national Flood Insurance Program is sought. The huge and widespread debate in recent months should ensure that the final solution comes after an informed and public process.
Here’s a good summary of the House vs Senate Bills from the Tampa Bay Times.
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 781.631.1223 or [email protected].
Andrew Oliver is a Realtor with Harborside Realty in Marblehead
Housing inventory: spring is coming, right?
Two years ago the month of February saw just one day when the temperature was below freezing. This year….well you know what’s it been like, hibernation for most of the month. Statistics for sales at this time of year are, therefore, largely meaningless.
Instead, I have been looking at the supply of houses and condos for sale and comparing numbers with a year ago, which was also a cold month if not quite as brutal as this year.
We are assured that it will warm up one day, if not soon. With signs that the economy continues to improve, if slowly, it seems quite likely that spring, if and when it comes, will find buyers chasing limited inventory, again, and that prices, certainly at the lower end, will continue the improvement of 2013.
Here is the inventory by price for Marblehead, Beverly, Salem, Swamspcott and Essex County overall. (more…)
Million dollar home sales picking up in Marblehead
I commented several times last year that the higher end of the market, in Marblehead and throughout Essex County, was not enjoying the level of activity seen elsewhere, something which puzzled me. I wondered whether it was just a timing issue, as activity spread out from Boston and its nearer-by towns.
A few short and very cold weeks into 2014 there is evidence that activity is now picking up for houses priced $1 million and up.
First, a chart showing sales in recent years:
Source: MLS, Oliver Reports
Already in 2014 we have had 3 sales over $1 million, plus we now have a further 8 pending: 7 in the $1-2 million range and one in the $2-3 million range. That makes 10 sales or pending sales in the $1-2 million range already in 2014, suggesting that 2014 may well see sales at that price getting back to the numbers of 2004-07.
Sales at $3 million or more have not exceeded the 3 of the last two years except for the 4 in 2007.
It is the $2-3 million bracket has really been hit. Total sales in this range for the last three years combined are just 3, compared with 5-8 each year in the 2004-07 years.
One of the consequences of the Federal Reserve’s policy of keeping interest rates low has been a boom in the stock market, creating wealth for those who have been able to invest. Perhaps 2014 will be the year that some of these investors decide that higher-priced real estate is now a better investment than the stock market.
In a typical real estate market recovery activity and prices improve first at the lower end and then that activity moves up into higher price brackets as people trade up and buyers have more confidence in spending more on real estate. There are increasing signs that this is happening in Marblehead.
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 781.631.1223 or [email protected].
Andrew Oliver is a Realtor with Harborside Realty in Marblehead
Salem Power Plant agreement good news for real estate market
Last summer I showed a beautiful house on the West Side of Marblehead to a client who loved the house but balked at the view of the power plant. I explained that the plant was due to close in May 2014 and be replaced by a much smaller gas-fired plant. “I’ll believe that when it happens” was the response.
Well now it is time to believe. After much to-ing and fro-ing, all the parties have reached agreement, and this week the State approved the plans.
According to the Salem News: “the Historic Commission gave Footprint the go-ahead to tear down the Salem Harbor Station. The plant is scheduled to close on May 31. Along with constructing a new power plant and tearing down the old one, Footprint plans to clean up the 65-acre site, 40 acres of which will be repurposed.”
This settlement is good news all round: it maintains a major tax base for Salem; allows redevelopment of a substantial amount of waterfront; ensures electricity reliability for the region; and for Marblehead removes an eyesore which has also been a major source of pollution.
The final confirmation of the go ahead should encourage renewed interest in houses in Marblehead in sight of the old power plant.
Here’s the Salem News article: State OKs settlement between Footprint-CLF
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 781.631.1223 or [email protected].
Andrew Oliver is a Realtor with Harborside Realty in Marblehead
Twenty Question with Marblehead’s Assessor
Twenty Questions with Marblehead’s Town Assessor, 2014
The FY2014 tax rate has been set at $11.09, up from $10.85 in FY2013. The median single family assessment increased 1.1% to $481,500, and the median single family tax bill increased 3.4%, or $175, to $5,340. The commercial rate has once again been set at the same rate as the residential rate.
Note that the tax rate includes the cost of overrides voted at Town Meeting. These account for $0.85 of the 2014 tax rate, up from $0.81 in 2013.
Marblehead’s 2014 tax rate will be the third lowest of the 17 North Shore cities and towns and also the third lowest of 34 Essex County communities. The highest rate in Essex County belongs to Amesbury at $20.97.
Approximately 70% of Marblehead’s revenue comes from property taxes.
Between September 2013 and June 2014 the Assessors’ office will physically measure and inspect every property in Marblehead.
Real-estate assessments for Fiscal Year 2014 were mailed at the end of last year. Assistant Assessor Mike Tumulty answered questions about the process.
1. What is the timeframe upon which assessments are based?
A: For 2014, assessments are based upon values as of January 2013, using sales data for calendar year 2012. Sales that took place in calendar year 2013 will be the basis for the assessment for FY 2015.
2. Can I appeal my assessment?
A: Yes, provided the appeal is based upon data for the relevant year. More information and directions for filing an application are available at www.marblehead.org/assessors. (more…)
Marblehead “Spectacular Seaside Home” Open House today 12-1:30
Click here for details
Widespread flooding hits the UK: a different approach to flood insurance
Today England has posted two severe flood warnings, meaning a danger to life, for the Somerset Levels, as well as more than 160 flood warnings and over 300 flood watches covering every other region of England. It is, therefore, topical to ask: How does the UK deal with the problem of flood insurance?
I spoke yesterday to Matt Cullen, Policy Advisor on Flood at the Association of British Insurers. One huge difference between the UK and the US is that in the UK flood is included in a standard homeowners policy, whereas it is excluded in the US. A second is that the UK has really accurate flood maps, while as we have seen of late not only are existing flood maps widely out of date in the US but there have been suggestions that the new maps, in Massachusetts for example, are not being produced using appropriate techniques.
One of the basic tenets of insurance is to spread risk over as many people as possible. In the UK there are about 20 million homes of which more than 90% carry property insurance and 70% contents insurance. Since flood is included in standard policies, the cost is shared widely. By way of comparison the Congressional Research Service in a February 2013 report stated:”Nationally, recent reports suggested that only 18% of Americans in flood zone areas have flood insurance.” Another report suggests that 40% of federally backed mortgages, required to carry flood insurance, do not do so. (more…)
The weather is freezing, but 2014 could be a really good year for real estate
Since its low in March 2009 the stock market, even after the January correction, has increased by 141% and is 12% above its prior 2007 peak.
By way of contrast, the housing market is up 22% from its low and is still 21% below its 2006 peak.
Sources: Dow Jones, Case-Shiller
Throughout the country the cry is the same: there is not enough supply. Come on sellers!
Well, here’s a thought. For most of us our home is our largest asset. During the great recession, as values decreased, we felt worse off. Now, as prices are recovering, we feel better off. But human nature is such that we are reluctant to sell at a price lower than one that could have been achieved in the past. And nationally prices would need to increase 25% to get back to 2006 levels. (more…)
Flood Insurance: Senate to vote Monday on bill to delay flood premium increases
According to an article in the Times-Picayune of New Orleans, the US Senate is finally scheduled to vote on Monday to allow debate to proceed on legislation to delay flood premium increases .
To summarize my previous posts on this subject:
– only a small percentage of homes in flood zones carry insurance
– the NFIP has worked well with the exception of major catastrophes
– Congress passed the Biggert-Waters Act without understanding the consequences
– FEMA was supposed to complete an affordability study before implementing new rates, but didn’t
– an independent study suggests 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.”
Other than that….. (more…)
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