No Virginia, this it NOT a housing bubble
There is a saying in the stock market, wherein I spent some 35 years of my earlier life, that the market climbs a wall of worry, meaning that the market climbs even as many commentators express concern about various economic or political risks.
This week S&P published a report entitled: US Home Prices Suddenly Surge, But Talk Of A Bubble May Be Premature read report .
Wikipedia defines an economic bubble as: “trade in high volumes at prices that are considerably at variance with intrinsic values. It could also be described as a situation in which asset prices appear to be based on implausible or inconsistent views about the future.”
OK so before we get carried away here, let’s remind ourselves that nationally housing prices remain 28% below their peak (which WAS a bubble) and that affordability is close to all-time highs. As I have pointed out before, a market that goes down 40% and then “surges” 15% is still down 31%. Not exactly a bubble. (more…)
Mortgage rates to increase 1%
No, that’s not a forecast starting today, but a reminder of a forecast made by the Mortgage Bankers Association and published here in January. The key sentence read: “We expect that mortgage rates are likely to stay below 4 percent through the middle of 2013, and will increase gradually as the economy improves and finish around 4.4 percent in the fourth quarter of 2013.”
Well, rates did stay below 4% until June. And once rates have got back to that level, a forecast of 4.4% by year end doesn’t sound that scary, even if the speed with which we have got there is. Any angst felt at missing the bargain basement rates of the last year (and rates are back to where they were just over a year ago when they were considered amazingly cheap) is perhaps a reflection of our common desire to snare a bargain.
It is, however, worth remembering that during the boom years of 2005 and 2006 mortgage rates averaged 5.9% and 6.4% respectively.
The bottom line remains: if you want to buy a house and can afford to, do so.
$560,000 for 2 Boston parking spaces. Really? What would $560,000 buy in Marblehead?
Two parking spaces – not garages, just spaces – on Commonwealth Avenue in Boston sold this week for $560,000, which had me considering what one could buy for that money in Marblehead.
As it happens one house has just sold for exactly $560,000. Like the Boston sale this one had two parking spaces. Unlike the Boston sale this one also had a 2,600 sq.ft. 4 bedroom Single Family Home.
Hm.
Marblehead has beautiful water in the harbor and ocean; and beautiful drinking water in its taps
Marblehead’s water comes from two reservoirs, Quabbin and Wachusett, and is supplied by the Massachusetts Water Resources Authority (MWRA) which released its 2012 survey this week.
Over the last 20 years the lead in MWRA’s water, as measured by parts per billion, has dropped from 60 to just 8.
And in Marblehead that number is even lower, just 4 ppb.
Marblehead: water, water everywhere and lots and lots to drink (with apologies to Coleridge).
Pending home sales in Massachusetts soared in May – or did they?
The Massachusetts Association of Realtors (MAR) reported this week that pending home sales – those with a signed Purchase & Sale agreement – for Singe Family Homes (SFHs) soared by 84% in May compared with May 2012, and by 58% compared with April 2013.
Great! But wait a minute. As I reported in this post One-day record for homes going under agreement the MLS changed its methodology of reporting sales with an accepted offer as of May 17, but DID NOT ADJUST THE HISTORIC DATA!!!!! (more…)
How long will it take to sell MY home?
My posts yesterday showed the supply of homes for sale in terms of months of current supply. That’s one useful piece of information.
But if you are thinking of selling, or have a house currently on the market, the question you want to ask is: How long will it take to sell MY home?”
First, let’s look at those Single Family Homes (SFHs) that are currently Under Agreement (UAG), meaning they have an accepted offer. Here’s the breakdown by Days on Market (DOM) and by price: (more…)
Housing supply varies greatly by price
When I presented the inventory data to the Harborside office meeting on Tuesday, I was asked how it varied at different selling prices.
The answer is “greatly”, with the market under $500,000 clearly a sellers’ market, while at the upper end supply is plentiful.
Here are the numbers for the North Shore overall. I can provide the numbers for any specific city or town – including those not in my composite – on request. (more…)
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…)
Marblehead Waterfront Colonial with Dock and almost an acre: Open House Sunday
Come see this wonderful Colonial on Sunday 12:00 – 2:00 pm. (more…)
Marblehead Oceanfront 2 House Compound Open House Sunday
11 Crown Way, Marblehead. Sunday 12:00-1:30
Two houses 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.
Plus Marblehead’s most stunningly located carriage house with an additional 2,404 sq. ft. of living space.
Property is uniquely protected from coastal storms.
Access to a private beach. Wonderful neighborhood; private mooring available. $4.5 million.
www.11CrownWay.com
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:
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