How much do you need to earn to afford to rent a 2 bed apartment?
A new report by the National Low Income Housing Coalition finds that it is getting harder and harder for average Americans to afford a modest rental.
In 2016, a worker would need to make $20.30 per hour to rent a two-bedroom accommodation comfortably—without devoting more than 30 percent of income on housing costs. Last year, NLIHC pegged this “housing wage” at $19.35 per hour. The actual average hourly wage is $15.42.
The report highlights the difference in each State between the actual hourly earnings and that needed to afford a 2 bed rental.
This is the summary for Massachusetts: (more…)
Today’s Open Houses
It’s not beach weather today so head out to see these Open Houses: (more…)
Millennials heading to the suburbs
While popular belief is that cities have been the beneficiaries of a population shift in recent years, a recent US Census report showed that the share of population growth of the top 50 cities in the US slowed in 2015 to 20%, down from almost 27% in 2011, and has dropped each year since then. It appears in fact, as though millennials are heading to the suburbs. (more…)
New listings picking up steam in Marblehead
New listings are picking up steam in Marblehead with 30 new SFHs coming to market in the last two weeks. Elsewhere, the new supply has been steadier, although Swampscott did have an upward blip last week: (more…)
Baseball returns to Marblehead TODAY
This Saturday at 5 p.m., baseball returns to Marblehead when the Seasiders — a new addition to Marblehead’s long tradition in the North Shore Baseball League — open their season at historic Seaside Park. (more…)
Marblehead says no to assisted living facility: a pyrrhic victory?
To the surprise of many, after several months of discussions and modifications, and after approval was granted by the Planning Board, the Zoning Board of Appeals voted unanimously to deny the application to build the proposed Mariner assisted living facility. I do not have the expertise to comment on many aspects of this decision, but I can ask the question: will this decision prove to be a pyrrhic victory* for the neighbors? Or, in the words of the editorial in this week’s Marblehead Reporter: “Be careful what you wish for.” (more…)
Open Houses and Current Inventory
Another beautiful day on the North Shore.With mortgage rates dropping to a 3 year low, what better time than now to shop for a new home? As can be seen by the table, roughly one-third to one-half of the properties currently on the market are open today:
(more…)Mortgage rates still heading lower
I last wrote on mortgage rates in February in a report titled What happened to 4% mortgages? That article started with these words: On the way to the “inevitable” increase in mortgage rates this year, a funny thing has happened – they have gone down again, raising the question: what happened to 4% mortgage rates?
Where are rates now?
Here are this week’s rates, with the 30 year fixed rate mortgage (FRM) at a new 3 year low:
Source: Freddie Mac Weekly Survey
What are the “experts” forecasting?
The Mortgage Bankers Association (MBA) has been forecasting for the last 2-3 years that mortgage rates would soon increase to 5% or more.
In November 2013 the MBA forecast mortgage rates “to rise to 5.1% in 2014”. Actually, the 30-year Fixed Rate Mortgage (FRM) was 4.0% at the end of 2014.
Undaunted, in December 2014 the MBA again forecast a rise to 5.1% by the end of 2015, and once again the actual FRM was 4.0% at the end of 2015.
By January 2016 the MBA had become a little more cautious and forecast an increase to just 4.6% by the end of 2016, but to 5.2% by the end of 2017.
And now in May, those forecasts have dropped to 4.1% by the end of 2015 and 4.8% by 2017.
Why are the “experts” so wrong?
The FRM is based, not on short-term interest rates over which the Federal Reserve has influence, but on the yield on the 10 year US Treasury (10T), whose price is influenced by a number of factors, notably the anticipated strength of the economy, yields compared with other countries, and geopolitical developments around the world.
When the Fed increased short-term rates last December, the yield on the 10T was 2.25%. On Friday it closed at 1.71%, a change of more than half a per cent. In the same period,the FRM has dropped 0.4%.
The reason the MBA keeps getting the forecast for the FRM so wrong is that it keeps forecasting that the yield on the 10T is going to increase. Its latest FRM forecast assumes a 10T yield of 2.2% by the end of 2016 and 2.9% by the end of 2017. These forecast rates have dropped from 2.7% and 3.3% just since January.
But it is not just the MBA that gets interest rates wrong. The Fed was so concerned about being “transparent” and explaining, ad nauseam, its thinking on interest rates in order not to “surprise” the market, that it missed the opportunity to raise rates when the US economy was strong and did so just as it became apparent that the continued weakness in the rest of the world was leading to lower interest rates elsewhere, not higher.
Interest rates have long been higher in the US than in most of the rest of the world, leading to demand for US Treasuries from overseas and causing the dollar to strengthen dramatically.
In my comment on the Fed’s increase in December I wrote: “If commodity prices remain weak, there will be a significant deflationary impact felt in several countries; China’s slowdown could continue to be a drag; and of course there is always the risk of a major war or confrontation.The US economy is doing quite well, but will not be immune to what is happening elsewhere in the world.”
Where are mortgage rates headed?
As I have pointed out, the “experts” have been consistently wrong, so their “forecasts” have really become guesses.
The chart below shows the spread – the difference between the rates – on the FRM and 10T. For the last three years this has averaged 1.67% and been pretty consistent: 2013 and 2014, 1.66%, 2015 1.70%. Today the spread is 1.82%, a little higher than the last few years.
Summary
While the US economy is stronger than those of most of other countries, it is growing at only a moderate 2 – 2.5% per annum. Elsewhere there are many headwinds, which make it hard – at least for this observer – to see the basis for interest rate increases in the near future.
Trying to guess the bottom in mortgage rates is like trying to time investment in the stock market – great fun, but rarely successful.
What we can say is that mortgage rates today are extremely low by historic standards and to some extent are offsetting home price increases in the last few years.
If you are considering selling your home please contact me on 617.834.8205 or Andrew.Oliver@SothebysRealty.com for a free market analysis and explanation of the outstanding marketing program I offer.
Read Which broker should I choose to sell my house?
If you are looking to buy, I will contact you immediately when a house that meets your needs is available. In this market you need to have somebody looking after your interests.
Andrew Oliver is a Realtor with Harborside Sotheby’s International Realty. Each Office Is Independently Owned and Operated
@OliverReports
A look at “history-rich” Marblehead
The Boston Globe’s history-rich Marblehead article highlight’s the town’s maritime history:
“It was described in 1660 as New England’s greatest fishing town due to massive cod stocks off its coast. A hundred years later, the town arguably begat the Navy, building and manning the schooners that George Washington used to hobble British transport ships in 1775.
Today, Marblehead has yet another maritime claim to fame, as one of the world’s yachting capitals.”
I do have a few quibbles with the article:
– It quotes the average selling price of a SFH in 2013 (why 2013?) as $526,000. I prefer to use median sales price, which in 2013 was $535,000, while the average sales price was $661,000. More pertinently, the median sales price in 2015 was $596,000 (and the average $754,000).
– The article repeats the old saw about Marblehead being inaccessible. One of the big advances in recent years – unnoticed by those who do not venture north from Boston – is the opening of the Ted Williams Tunnel which gives easier access to the Financial District and Cambridge, and greatly shortens the trip to the Cape or South Shore.
But I have no quibble with these comments:
“It’s hard to find a town more steeped in history than Marblehead”
“Despite being only about 16 miles from Boston, this yachting mecca has a somewhat island-time vibe.”
“What’s not high? The town’s property tax rate ($11.09 per $1,000 of assessed value, one of the North Shore’s lowest) — and your stress level when you take in Marblehead’s ocean views.”
If you are considering selling your home please contact me on 617.834.8205 or Andrew.Oliver@SothebysRealty.com for a free market analysis and explanation of the outstanding marketing program I offer.
Read Which broker should I choose to sell my house?
If you are looking to buy, I will contact you immediately when a house that meets your needs is available. In this market you need to have somebody looking after your interests.
Andrew Oliver is a Realtor with Harborside Sotheby’s International Realty. Each Office Is Independently Owned and Operated
@OliverReports
Saturday Open Houses
Salem and Beverly are leading the way with Saturday Open Houses:
Marblehead Saturday Open House
Swampscott Saturday Open Houses
Salem Saturday Open Houses
Beverly Saturday Open Houses
If you are considering selling your home please contact me on 617.834.8205 or Andrew.Oliver@SothebysRealty.com for a free market analysis and explanation of the outstanding marketing program I offer.
Read Which broker should I choose to sell my house?
If you are looking to buy, I will contact you immediately when a house that meets your needs is available. In this market you need to have somebody looking after your interests.
Andrew Oliver is a Realtor with Harborside Sotheby’s International Realty. Each Office Is Independently Owned and Operated
@OliverReports
Swampscott housing market still lacks supply
The data I maintain on home sales is useful but, since sales can take 2-3 months to complete from the date an offer is accepted, they do not provide as current a picture of the market as accepted offers. This article covers month by month this year the listing prices of houses in Swampscott where the seller has accepted an offer, together with the Days on Market (the number of days since the house was listed for sale) of the current inventory. Read my comments at the end of the post.
Note that just over half the accepted offers were on houses listed under $500,000.
Here is the month-by-month breakdown:
The pace of sales has been very steady, despite the lack of inventory.
This is the current inventory by price and by Days on Market (DOM):
While the average DOM is 87, below $1 million that number drops to 40. Note also that with sales running at 4 per week, the current inventory represents just 2 months of supply – and even less under $1 million.
Comment
The median SFH sales price in 2016 in Swampscott was $460,000 and as of today there are just 2 houses for sale below that figure and only 5 in all under $500,000. Furthermore, the median list price of the 58 houses with accepted offers through April was $499,000.
Inventory in Swampscott is well below the level of recent years as shown here:
The law of supply and demand continues to point to a rising market in Swampscott. If you are thinking of selling, now would be an excellent time.
If you are considering selling your home please contact me on 617.834.8205 or Andrew.Oliver@SothebysRealty.com for a free market analysis and explanation of the outstanding marketing program I offer.
Read Which broker should I choose to sell my house?
If you are looking to buy, I will contact you immediately when a house that meets your needs is available. In this market you need to have somebody looking after your interests.
Andrew Oliver is a Realtor with Harborside Sotheby’s International Realty. Each Office Is Independently Owned and Operated
@OliverReports
This week’s new listings
Here are this week’s new listings:
and in detail:
Marblehead new listings
Swampscott new listings
Salem new listings
Beverly new listings
If you are considering selling your home please contact me on 617.834.8205 or Andrew.Oliver@SothebysRealty.com for a free market analysis and explanation of the outstanding marketing program I offer.
Read Which broker should I choose to sell my house?
If you are looking to buy, I will contact you immediately when a house that meets your needs is available. In this market you need to have somebody looking after your interests.
Andrew Oliver is a Realtor with Harborside Sotheby’s International Realty. Each Office Is Independently Owned and Operated
@OliverReports
Ocean view homes under $1 million
Boston.com recently published an article mentioning 6 ocean view homes in Massachusetts under $1 million.
Guess what? Two of them are in Marblehead. (more…)
Mother’s Day. Flowers? Lunch? How about a new home?
Happy Mother’s Day to all Mothers. Perhaps you would care to visit these Open Houses to help in your choice of a Mother’s Day gift: (more…)
Saturday Open Houses
As tomorrow is Mother’s Day there are more than the usual Saturday Open Houses, especially in Beverly: (more…)
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