Oceanfront compound Open House Sunday
11 Crown Way. Sunday 2:00-3:30
Two properties on one lot make this ideal for extended family, nursing home alternative or just for a weekend and summer retreat without having to battle the traffic.
This spectacular oceanfront compound offers an elegantly restored, south facing, sun-drenched 6,265 sq. ft. main home with 15 spacious rooms including 7 bedrooms and 4 1/2 baths. Uniquely protected from coastal storms. Plus Marblehead’s most stunningly located carriage house offers an additional 2,404 sq. ft. Access to a private beach. Wonderful neighborhood and potential for a private mooring.
www.11CrownWay.com
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…)
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…)
Marblehead and North Shore home sales in April
In April the number of Single Family Homes (SFHs) sold in Marblehead was 23 against 17 last year, bring the Year To Date number to 54 compared with 44 last year,
As of May 1 there were 58 SFHs with an accepted offer. Were all these to close by June 30 – which they won’t, but others not yet with an accepted offer will – total sales for the first half of the year would be around 110.
Last year’s sales reached 229, the highest total since the extraordinary 285 of 2004. We are unlikely to challenge the 2004 level but we do seem to be moving back into the 220-240 range of the early 2000s.
Condo sales so far are 6 against 7. A further 8 had accepted offers as of May 1. At this stage it seems quite likely that sales will not match last year’s 42.
For the 17 North Shore cities and towns I track, sales of SFHs increased 6% for the first four months of the year while condo sales were up 12%.
North Shore Housing Inventory remains low in May
Using the same data as in previous months, the inventory of Single Family Homes (SFHs) remained pretty steady at 4.6 months supply as of May 1, compared with 4.5 months at April 1. For condos, supply increased from 5.0 months to 5.5 months.
April sees a flood of new properties coming to market for the peak spring selling season so an increase in supply is normal. In actual numbers, there wee 725 SFHs available (that is without an accepted offer) compared with 623 a month earlier, while there were 346 available condos, up from 292 a month earlier.
These numbers make the point that while the absorption rate remains high, there are now more properties available for sale, as one would expect at this time of year.
I am not publishing the tables I have shown in recent months because I have decided to change my methodology. I have been using the Last 3 Months for calculating absorption rates and hence how many months of supply is represented by the available properties. The problem with that is that is that it makes no allowance for seasonality. For example, April’s number of homes for sale – the start of spring selling – was compared with actual sales in January- March, the slowest quarter of the year.
For this month I am using the Last 12 Months believing that this will smooth out some of the seasonality. It’s not perfect, but then neither is the weather in New England and that’s the real cause of the seasonality.
Using L12M, the inventory for SFHs drops to just 3.6 months, with Peabody under 2, and several under 3. Here is the table:
Source: MLS, Oliver Reports
Similarly, condo supply drops to 4.4 months, with Salem, the largest condo market, being one of the tightest. Here’s the condo table:
Source: MLS, Oliver Reports
The equation is unchanged: low inventory + low mortgage rates = higher prices.
Open House Sunday for Waterfront, updated 3820 sq.ft. Colonial with private dock in park-like setting of nearly an acre
36 Crestwood Road $1,375,000
West Shore Drive to Shorewood Road to Pinecliff Drive to Crestwood Road
Open House tomorrow, April 28, 12:30 to 2:30.
Click here for full details
Marblehead First Quarter Report
The first quarter is usually the slowest of the year for sales and that pattern continued in 2013. But that doesn’t tell the whole story. As the quarter went on, activity accelerated as I have reported in several posts.
Sales were 31 vs 27 (29 vs 24 excluding distressed sales), and the median price $497,000, up 6% from last year’s depressed level, caused by the high percentage of sales under $500,000.
The most significant statistic from Q1 is the Assessed to Sale Ratio, which compares Assessed Values to Sales Prices. When sales take place above AV, the ASR is below 100%. So the lower the number the better the market! In my year rend review Read Review I pointed out that the ASR had declined during the year for SFH sales under $500,000.
Look now at the data for Q1.
Source: MLS, Oliver Reports
We have seen quite a sharp drop in the ASR in all price ranges. Bear in mind this data refers to just 29 sales that closed in Q1, which means sales agreed late last year into early this.
At the end of March there were a further 46 houses with an accepted offer and these, which will be in Q2 numbers, will reflect the stronger market seen in recent weeks.
Déjà vu all over again
Here is a comment from a new listing in Marblehead this week:
First showings @ open house 4/6,7. Offers held until 4/7 5pm.
In recent weeks houses have come on the market and offers have been accepted before the first public open house. Holding offers until the end of the open house allows the seller time to receive more offers. It also encourages buyers to make their best offer, which may well be above the asking price.
Did somebody say 2004?
North Shore Housing Inventory at the beginning of April
The first quarter on the North Shore is the time of the lowest sales and also the lowest number of houses for sale. Thus, the statistics as of April 1, give only a modest indication of what the spring market will be like.
As to that, I will comment in my next post.
Here are the numbers for SFHs for 17 North Shore Cities and Towns: (more…)
Moving up the food chain
The spring market continues to build momentum, as activity is moving up the price brackets.
Let’s look at the sequence of events:
– A February snowy Sunday with the temperature below freezing. 30 people showed up at an Open House for a property listed in the low $400s and multiple offers were received.
– In March another house priced in the low $400s never reached the open market as four offers were received above the asking price.
– Last week a house priced at $600,000 sold in one day.
– Four houses listed in March between $725,000 and $875,000 had offers accepted in 5-20 days.
– This week one house listed in the low $900s and one in the $1,500s had offers accepted in less than a week.
And in the last ten days two condos listed at $389,000 and $425,000 had offers accepted in 1 and 2 days.
Here’s a list of what is available by price. The last column shows the median Days on Market (how long it has been listed for sale) for those properties still available. (more…)
Listed for $550,000; sold for $630,000
The above example appeared in a Wednesday Boston Globe article Boston-area house hunters face bidding battles.
– The sale referred to above took place in Cambridge.
– In Jamaica Plain a buyer bid 12% above a condo’s asking price.
– Redfin.com reported that 89% of Cambridge deals this year involved multiple bids.
– A friend who owns a multi family in Boston’s South End has received three unsolicited offers in the last month, and I have reported earlier about the chronic shortage of condos for sale in Boston.
The market on the North Shore tends to lag behind Boston, but there are already signs that buyers here are feeling the pressure of increased competition for the small number of properties available for sale. I have reported before on multiple bid situations over the asking price in the last few weeks. (more…)
Small Business Owner: buy with only 10% down
PRIME OFFICE/RETAIL SPACE AT FIVE CORNERS
257 Washington Street – next to 5 Corners Kitchen!
Less expensive than leasing!
Details:
714 sq.ft. Office/Retail Condo with private bathroom
Attractive entrance: brick pathway and vestibule
Very light, lots of windows and character
Condo fee $87.50 per month
Price: $187,500
Click here for more details
Mike Cannuscio, Managing Partner
781.838.0068
[email protected]
How much will home prices increase in the next decade?
According to a Bloomberg report, JPMorgan Chase & Co. (JPM) more than doubled its forecast for U.S. home price gains in 2013 to 7 percent this week, and predicts a more than 14 percent increase through 2015. Bank of America Corp. (BAC) said last week property values will jump 8 percent this year, up from a prior estimate of 4.7 percent in a report titled “Someone say house party?”
I have previously written that I expect any surprise in 2013 to be on the upside. I also reported a recent open house in Marblehead on a snowy and blustery day when 30 people showed up and multiple offers were received. Then last week before a new property came on the open market it received several offers above the asking price.
(more…)
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