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 andrew@HarborsideRealty.com.
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 andrew@HarborsideRealty.com.
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…)
How will a wind turbine affect my home’s value?
A recent study Relationship between Wind Turbines and Residential Property Values in Massachusetts by the University of Connecticut and the Lawrence Berkeley National Laboratory analyzed more than 122,000 home sales between 1998 and 2012 occurring near the current or future location of 41 turbines in densely-populated Massachusetts communities.
While “weak evidence suggests that the announcement of the wind facilities had a modest adverse impact on home prices….. those effects were no longer apparent after turbine construction and eventual operation commenced. The analysis also showed no unique impact on the rate of home sales near wind turbines.” The study “found no net effects due to the arrival of turbines in the sample’s communities.” (more…)
Marblehead Oceanfront Open House Sunday 12-2
THERE WILL BE ONLY ONE BUYER. Will it be you?
Dutch auction: the price is reduced $25,000 every Friday on this 11CrownWay 1850 Marblehead Oceanfront family compound.The first person to hit the bid buys the house! (more…)
Can reverse auction move Marblehead mansion?
Boston.com posted this article today.
Here’s a link to the property’s website 11 Crown Way
If you 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 andrew@HarborsideRealty.com.
Andrew Oliver is a Realtor with Harborside Realty in Marblehead
THERE CAN BE ONLY ONE BUYER
Dutch auction: the price is reduced $25,000 every Friday on this Marblehead Oceanfront family compound. The first person to hit the bid buys the house! (more…)
New mortgage rules raise costs for borrowers
Carl Edwards, V-P Lending for National Grand Bank in Marblehead, made a presentation at the offices of Harborside Realty this week. His main message was that the new rules, designed to “protect” the consumer, would have the effect of increasing the cost of mortgages.
The new rules, which are part of Dodd- Frank: generally require creditors to make a reasonable, good faith determination of a consumer’s ability to repay any consumer credit transaction secured by a dwelling …… and establishes certain protections from liability under this requirement for “qualified mortgages.”
The concept of requiring a lender to determine if a borrower can repay a loan may seem like basic common sense, but with regulation comes additional costs. For example, a borrower with a credit score of 700 making a deposit of 30% on a loan sold to Fannie Mae or Freddie Mac will now pay 1.50% in upfront fees. (more…)
Marblehead Housing Review 2013 and Outlook
I concluded my 2012 review with these words: “clearly 2012 was the year when the market nationally turned up. More importantly, perhaps, it also marked the turn in sentiment, with the view becoming widespread that the market has bottomed and is improving, in some cases sharply.”
There is no doubt that 2013 was a year when the headlines about the housing market were dominated by stories of rising prices and bidding wars, with many, many properties throughout the country – and in Marblehead at the lower levels – selling above list prices.
The median price for a Single Family Home (SFH) in 2013 was $535,000,up from $510,000 in 2012 and from $524,950 in 2011. Sales, at 227 were unchanged from 2012, largely because the shortage of available properties for sale, a factor all year, really took hold in Q4.
Let’s look at the numbers. (more…)
Marblehead Condo Market 2013 Review and Outlook
After several years of high inventory the condo market in Marblehead turned around sharply in the second half of 2013.
At mid-year there were 24 condos available for sale after just 12 sold in the first half of the year.
In the second half of the year, however, there were 34 sales, the highest number in any six month period since 2005, and as of today there are just 9 condos for sale in Marblehead, and 3 of those are priced at $625,000 or higher.
The law of supply and demand suggests that 2014 will be a good year for condo prices in Marblehead.
Reasons for the turnaround include:
1. Condos are often bought by first time, younger buyers, who may be feeling more confident about their job prospects.
2. At the higher end, condos are bought by people down-sizing or wanting a summer property.
3. As mortgage rates moved up during 2013, Adjustable Rate Mortgages (ARMs), which are often used by condo buyers, became more attractive as the benchmark interest rate used to price ARMs did not move up as much as that used in pricing 30 year mortgages.
4. The days of converting 2/3 unit apartment buildings and calling them condos are gone. Today’s condo buyer wants a purpose-built or professionally converted condo, and there is a limited supply of these in Marblehead. (more…)
Year end reviews
I shall be publishing year-end reviews over the course of this weekend. The best way to know when they are published is to sign up on www.OliverReports.com to receive email alerts of new articles. Here’s a screenshot showing where you can sign up on the home page.
If you 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 andrew@HarborsideRealty.com.
Andrew Oliver is a Realtor with Harborside Realty in Marblehead
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