How Marblehead’s 2023 Property Tax Rate is Calculated
The formula for calculating the property tax is: 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. – to produce the total Tax Levy.
The tax rate is then calculated by dividing the Tax Levy by the Assessed Value of property – and, crucially, that calculation is based upon prices as of January 1, 2022, using date from sales in calendar year 2021. What that means is that 2022 sales are used for the calculation of the tax rate in FY2024 – not FY2023.
Here are the numbers for Fiscal Years 2022 and 2023, remembering that FY 2023 runs from July 2022 to June 2023. (more…)
New Listings week ending January 13
Here are the latest New Listings:
Click on these links for details: (more…)
December sales in Marblehead and Swampscott still mostly above List Price
The small number of December sales in Marblehead and Swampscott continued to show strength.
Marblehead
6 of 9 SFH sales in December – and 1 of 3 Condo sales – were over List price.
Swampscott
6 of 9 SFH sales in October were at or over List price, while 1 of the Condo sales was at List and one just below. (more…)
Open Houses New Year weekend
Here are this weekend’s Open Houses (just 1 in Beverly and Marblehead, 2 in Swampscott and 3 in Salem) :
Click on these links for details:
Marblehead Open Houses
Swampscott Open Houses
Salem Open Houses
Beverly Open House (more…)
Open Houses Sunday December 18
Here are today’s Open Houses:
Click on these links for details:
Marblehead Open Houses
Swampscott Open Houses
Salem Open Houses
Beverly Open House (more…)
Why Mortgage Rates Will Fall
I have read and heard several comments suggesting that the increase in the 30-year Fixed Rate Mortgage (FRM) this year has been a direct result of the increase in the Federal Reserve’s Fed Funds rate (FF).
This is not correct.
As I will demonstrate, the FRM is determined by market forces, and in particular by the extra yield – the “spread” – which investors require when buying pools of mortgages (Mortgage Backed Securities or MBS), as compared with the risk-free yield available with the 10-year Treasury Note (10T) which has the nearest duration to the expected life of a pool of mortgages.
In contrast, the FF is the rate that banks use when setting their Prime Rates. When the FF increases, banks increase their Prime Rates and therefore the interest rate on those loans whose rates are based upon Prime Rates – e.g. credit cards and auto loans.
And we will see that the FRM increased this year long before the Fed started to increase the FF rate.
Mortgage-Backed Securities (MBS)
A conventional mortgage or conventional loan is any type of home buyer’s loan that is not offered or secured by a government entity. Instead, conventional mortgages are available through private lenders, such as banks, credit unions, and mortgage companies.
Most conventional mortgages are packaged into mortgage-backed securities and sold to investors. This allows the bank or originator to use its capital to finance more mortgages.
The relationship between 10T and FRM
This chart shows how the two have moved in lockstep over the last 30-plus years:
Source: National Association of Realtors
Marblehead and Swampscott November sales still strong
November sales in Marblehead and Swampscott continue to show strength.
Marblehead
10 of 19 SFH sales in November were at or over List price, with 2 sales at 23% and 32% over list. Just 1 of the 4 Condo sales was over List.
Swampscott
6 of 10 SFH sales in October were at or over List price (5 over the Original List Price), while 5 of the 6 Condo sales were at or above List.
Comment
While sales continue to be strong – and often strongly above list price – it is interesting to note that 8 of the 14 SFHs currently available for sale in Marblehead have had price reductions, while 4 of the 9 in Swampscott have also seen price cuts – or “adjustments” or “improvements” as we like to call them.
Note also that in November, all but 1 of the sales where the price had been reduced subsequently took place below the reduced price.
The sample is small, but the implication is clear: over-pricing in this market leads to a lower sale price.
Marblehead, Swampscott October sales still mostly above List Price
With all the chatter about home prices nationally declining or about to decline, October sales in Marblehead and Swampscott seem to be saying NIMBY – not here please.
Marblehead
12 of 19 SFH sales in October were at or over List price, with 2 sales at 35% and 36% over list:
Swampscott
5 of 10 SFH sales in October were at or over List pice
Comment
While sales continue to be strong – and often strongly above list price – it is interesting to note that 8 of the 19 SFHs currently available for sale in Marblehead have had price reductions, while 4 of the 11 in Swampscott have also seen price cuts – or “adjustments’ or “improvements” as we like to call them.
Notably also, the inventory of SFHs for sale in Essex County has not seen the usual seasonal decline so far, an indication perhaps of the consequences of the doubling in mortgage rates this year, with buyers reluctant to pay the much higher rates – and sellers reluctant to move and surrender their low-rate mortgage.
As we approach Thanksgiving and the holiday season, I suspect both buyers and sellers – unless their need is urgent – may decide to focus on planning time with their families and friends – and then take another look at the housing market in 2023. (more…)
November Inventory stays high
Inventory numbers usually drop as we head towards the winter months, but this year the level of SFH inventory has remained steady so far.
Single Family Homes
Condos
Condo inventory has also been steady, although this brings the level back only close to last year’s level.
New Listings after Halloween
New Listings mid-week November 2:
Click on these links details: (more…)
Marblehead Q3 2022 Report: Median Price tops $1 million
The median price of the Single Family Homes (SFH) sold in Marblehead in the Third Quarter (Q3 2022) topped $1 million for the first time, while for the first 9 months of 2022 (YTD Q3) it increased to $925,000. The median condo price increased 7% YTD Q3 to $552,000.
Single Family Homes (SFH)
The median price of the SFHs sold in Marblehead in the first 9 months of 2022 (YTD Q3 2022) increased 9% to $925,000 on the smallest number of sales since 2011.
As the percentage of sales over $1 million increased from 34% YTD in 2021 to 44% YTD in 2022, so the median price moved closer to $1 million – and in fact exceeded that figure in Q3. Sales over $1 million YTD increased from 56 to 66, with 14 sales over $2 million vs 12 YTD in 2021. (more…)
Swampscott Q3 2022 Report: Median Price hits $800,000
The median price of the Single Family Homes (SFH) sold in Swampscott in the first 9 months of 2022 (YTD Q3) increased 12% to $800,000. The median condo price also increased 12% YTD Q3 to $447,500.
Single Family Homes (SFH)
The median price of the SFHs sold in Swampscott in the first 9 months of 2022 (YTD Q3 2022) increased 12% to $800,000 on the smallest number of sales since 2012.
As the percentage of sales over $800,000 increased from 36% YTD in 2021 to 51% YTD in 2022, so the median price moved from just over $700,000 to $800,000. Sales over $1 million YTD increased from 13 to 25. (more…)
October Inventory shows modest decline
After 5 months when Single Family inventory ran ahead of last year’s numbers, in October there was a modest year-on-year drop.
Single Family Homes
Condos
Condo inventory continues to lag both 2020 and 2021 levels.
Open Houses Sunday August 28
Here are today’s Open Houses:
Click on these links for details: (more…)
Summer 2022 Market Review
Click on Summer Market Review to read the market review for the first 6 months of 2022,
This reports covers all 34 cities and towns in Essex County, with more detailed reviews of Beverly, Gloucester, Manchester-by-the-Sea, Marblehead, Rockport, Salem and Swampscott
And these recent articles: (more…)
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