Tom Brady’s Boston real estate adventures
This The greater Boston real estate adventures of Tom Brady article from boston.curbed.com is much more interesting than ones about you know what.
Roll on Sunday. GO PATS!!!
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 617.834.8205 or [email protected].
Andrew Oliver is a Realtor with Harborside Sotheby’s International Realty Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
You can REGISTER to receive email alerts of new posts on the right hand side of the home page at www.OliverReports.com.
@OliverReports
Trulia’s “statistics” now even worse
My post Why I don’t rely on Trulia last week generated a lot of views, so I was intrigued to see what the weekly Marblehead Weekend Update would bring this week. (more…)
Luxury condo shortage in Boston !
It may come as a surprise – it did to me – but despite the booming luxury condo market in the last few years, Boston is actually facing a shortage of luxury condos, according to this article Luxury condo shortage – believe it or not by Scott Van Vorhis on boston.com. (more…)
No writing this week
My outburst of articles last Friday-Monday was, in part, because I was having hand surgery this week and I thought that typing afterwards would be difficult.
It is. I hope to be able to resume typing next week. (more…)
The Mortgage Mistake?
In this article The Mortgage Mistake from a recent issue of The New Yorker, sent to me by fellow Harborside Sotheby’s agent, Joe McKane, the writer argues that incentives to encourage home ownership – including subsidized mortgage rates and tax deduction of mortgage interest – do little to increase the number of homeowners. Other Western countries have similar rates of home ownership without the same range of incentives.
Almost all the economic benefits of the mortgage deduction go to people earning more than $100,000 a year. Result: people overinvest in housing and underinvest in other types of asset. And because people tend to invest more in housing when the economy is doing well and less when it is doing poorly, housing tends to amplify the economy’s ups and downs.
The trigger for this article is the new 3% down mortgage offered by Fannie Mae and Freddie Mac for first-time home buyers (see my recent 3% down mortgages are back post.) Default rates for mortgages with down payments of 3-10% are almost 50% higher than for those with down payment above 10%. Thus, the New Yorker writer argues, while the new mortgages may turn more low-income people into homeowners, it will also likely increase the default rate.
Two questions come to my mind: is increased home ownership an unarguably good thing? And does mortgage interest deduction encourage home ownership?
(more…)
Reasons to Sell your Home in Winter
Today’s Boston Globe carries this article Why selling in winter may be a good idea.
In addition to the benefits mentioned – less inventory means less competition for sellers, while those buyers who are out there are serious – I would add that mortgage rates have dropped sharply already this year and are not far off record lows. See my Mortgage rates: how low can they go? post from yesterday. (more…)
Why I don’t rely on Trulia
Let me start by saying that I think sites like Trulia and Zillow provide a useful service in terms of informing buyers about things like Open Houses. I also like the feature on Zillow that shows the price and tax history of a property listed for sale.
Where I have a problem with such sites is when they quote “statistics”. The danger with statistics always lies with the way they can be presented to give an impression of authority even when the statistics themselves are meaningless. It is always, always essential to be clear what is included in quoted statistics. If it is not clear do not rely on the numbers quoted!
What drives this comment? I had an email yesterday from Trulia entitled Marblehead Weekend Update. Prominently displayed was a box saying:
Source: Zillow
What the you know what? $289,000!!! (more…)
AAA Marblehead: Finances stay in the Black
New town Administrator, and former Finance Director, John McGinn presented the FY2016 (July 2015 – June 2016) Financial Outlook this week.
The headlines are:
– Marblehead is one of just 22 Massachusetts communities rated AAA by Standard & Poors
– As has been the case for the past 10 years there is “no need to consider any permanent (tax) overrides to fund the town’s operating budget.”
– Marblehead enjoys “No deficits; strong budget oversight; and appropriate revenue estimates, all of which allow us to avoid fiscal emergencies.”
– 78% of the Budget revenues derive from property taxes, 9% from State Aid, 5% from local receipts (excise taxes, permits etc.) and 8% from free cash and enterprise payments.
This presentation will form the basis of the formal Budget to be voted at Town Meeting on May 4th.
Here is the Marblehead FY16 Budget presentation. (more…)
Mortgage rates: how low can they go?
Remember the forecasts of 5% mortgages? 6% mortgages?
Well here we are in January 2015 and the 30 year mortgage rate is well below 4%. In fact I was in a Bank of America branch this week and saw a sign for 30 year mortgages at 3.5% (with points), while the national average reported by Freddie Mac on Thursday was 3.66%.
The benchmark for the 30 year mortgage is the 10 year US Treasury yield. What does that mean? In general, banks sell the mortgages they issue to Fannie Mae or Freddie Mac who in turn package them into pools and sell them to investors. Because mortgages have higher risks than US Treasuries, investors demand a higher yield than they would accept from Treasuries. The difference in yield between mortgage securities and Treasuries is called the spread.
This chart shows the spread from 2005 to 2014. I have summarized the high and low spread for each year in the table below the chart. For most of the period the spread was between 1.50% and 2.00%. It was over 2.00% throughout the crisis year of 2008 and did not drop below 2.00% until April 2009, but has been below 2.00% almost the entire period since then. What does this mean for mortgage rates?
Sources: US Treasury, Freddie Mac
Source: US Treasury, Freddie Mac
The 10Y Treasury yield on Friday was 1.84%, so adding a spread of 1.50 – 2.00% would produce a 30 year FRM of 3.34 – 3.84%. And we are at 3.66%.
Where does the 10 Y Treasury yield go from here?
I think every expert forecaster has been wrong on US interest rates. The assumption was that once the Federal Reserve stopped buying mortgage backed securities and Treasuries (Quantitative Easing), interest rates throughout the economy would rise, driven by a strengthening economy and hence the demand for loans to finance business and mortgages. What has got in the way of that forecast, in simple terms, has been: geopolitical risk (Crimea, Ukraine, terrorism) which always leads to a flight to safe investments, and US Treasuries are regarded as the safest investment available worldwide; and grave concerns about deflation in many parts of the world, but especially in Europe, where a huge expansion of QE is expected to be announced next week.
The US is growing economically quite strongly and has stopped its QE program, while Europe is stagnating and about to ramp up its QE program. One of the consequences of this divergence has been a stronger US dollar which is one of the factors behind the collapse in commodity prices.
And on top of this, which in itself fuels the demand for US Treasuries as a safe haven in a strong currency, the yield on US Treasuries is higher than that available in many other countries.
Source: Bloomberg
Predictions
As I have said many times predicting the future is very difficult! Very few countries in Europe have even started on the structural changes necessary to get their economies moving, and many commentators fear that QE is seen as a free lunch, when the only thing that is certain is that it will lead to even greater debt in already over indebted countries. No wonder the US is seen as a safe haven!
It does seem that the biggest concern worldwide is avoiding deflation and it is hard to see how interest rates can rise against that background. In the beginning of 2015, buyers of homes in the US have been given an unexpected opportunity to finance their purchases at interest rates close to the lowest ever seen. Could mortgage rates go even lower in the coming weeks? Certainly, but with the time lag involved when buying a home, trying to time interest rates, like trying to time the stock market, is unlikely to be a successful strategy. Rates are very low: take advantage of them!
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 617.834.8205 or [email protected].
Andrew Oliver is a Realtor with Harborside Sotheby’s International Realty
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
You can REGISTER to receive email alerts of new posts on the right hand side of the home page at www.OliverReports.com.
@OliverReports
Mortgage Rates drop to 3.66%
The 30-year national average mortgage rate, as reported by Freddie Mac, started 2014 at 4.5% with forecasts that by year end the rate would reach over 5%. For a number of reasons, which I will go into again more fully in my post this coming Saturday, the rate in January 2014 was the highest for the year and ended 2014 at 3.87%.
This year the slide has continued with the rate reaching 3.66% this week, the lowest level since May 2013 and not far from the record low of 3.31%. The decline in rates seems likely to trigger renewed buying interest and may shorten the traditionally quiet winter market.
Source: Freddie Mac
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 617.834.8205 or [email protected].
Andrew Oliver is a Realtor with Harborside Sotheby’s International Realty
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
You can REGISTER to receive email alerts of new posts on the right hand side of the home page at www.OliverReports.com.
@OliverReports
What does $27 million buy in Nantucket?
Answer: a 5,000 sf, 5 bedroom home on 1.5 acres, but….. it is on a cliff overlooking Nantucket Sound.
8 homes in total sold for over $10 million in 2014.
It may not be Nantucket but the North Shore offers great value in oceanfront property and I expect a strong market for such properties in 2015.
Read this Nantucket mansion sales through the roof article from boston.com.
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 617.834.8205 or [email protected].
Andrew Oliver is a Realtor with Harborside Sotheby’s International Realty
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
You can REGISTER to receive email alerts of new posts on the right hand side of the home page at www.OliverReports.com.
@OliverReports
Would the Olympics be good for the Boston area real estate market?
The decision will not be made until 2017 but I looked to see if there was any data on the impact hosting the Olympics has on the host city’s real estate market.
This Olympics: a win for the housing market? article from yourmoney.com looks at the impact the Olympics have had on real estate markets in recent Olympics and argues that the impact is most significant in smaller cities which implement major infrastructure improvements.
f 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 617.834.8205 or [email protected].
Andrew Oliver is a Realtor with Harborside Sotheby’s International Realty
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
You can REGISTER to receive email alerts of new posts on the right hand side of the home page at www.OliverReports.com.
@OliverReports
Salem Housing Market 2014 Review
Here are the highlights for the Salem market for 2014. Note the difference between the SFH and condo markets when compared with the prior peak.
Single Family Homes (SFH)
– the median SFH price increased 7% to $346,750, less than 1% below the 2005 peak of $349,000.
– sales dropped 7% to 210, still the 3rd highest year this century
– the ASR* fell sharply from 92.5% to 82.9%, an indication of rising prices
Condos
– the median condo price also increased 7% to $247,000, but is still more than 11% below the peak of $279,000 in 2005
– sales were down slightly and are still well below the levels seen in the 2003-06 period
– the ASR* fell from 92.3% to 86.2%, an indication of rising prices
Tax rate
– the FY2015 tax rate is $16.41, a decrease from $16.73 in FY2014, but the average tax bill will increase nearly 5% or by $227 for SFHs.
I will publish a fuller market report in the near future.
* The ASR is the Assessed Value (AV) divided by the Sales Price (SP).If the ASR is below 100% it means that properties are selling for more than their AV. Conversely, properties selling below their AV will have an ASR above 100%.
– As we all hope our properties are worth more than the AV we look for an ASR below 100% as a positive sign. In a period of rising prices the ASR is likely to be falling. So what we, as homeowners, want is an ASR below 100% and falling
– Remember that AVs are a lagging indicator: the tax bills just announced for FY2015 are based on actual sales in 2013. Thus the 2014 sales data, reported in this review, will be the basis for FY2016 assessments. And remember, also, that falling tax rates rarely translate into falling tax bills!
– I will be publishing a report in the near future on the average tax bill per city and town in Essex County to go with my recent Essex County 2015 property tax rates report.
If you – or somebody you know – are considering buying or selling a home, or have questions about the market and/or current home prices, feel free to contact me on 617.834.8205 or [email protected].
Andrew Oliver is a Realtor with Harborside Sotheby’s International Realty
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
You can REGISTER to receive email alerts of new posts on the right hand side of the home page at www.OliverReports.com.
@OliverReports
Dreams, real estate, murder and war
I awoke this morning, blog day, at 5:20 am with a vivid image in my head of a blog post entitled “The Rousseau property market.” A quick search of my “mind” showed me that the Rousseau referenced was Jean-Jacques, the 18th Century Swiss philosopher whose writings influenced the French Revolution, not Conrad, the Marblehead mortgage lender.
But what was the link with real estate?
I found this quote:”The first man who, having fenced in a piece of land, said “This is mine,” and found people naïve enough to believe him, that man was the true founder of civil society. From how many crimes, wars, and murders, from how many horrors and misfortunes might not any one have saved mankind, by pulling up the stakes, or filling up the ditch, and crying to his fellows: Beware of listening to this impostor; you are undone if you once forget that the fruits of the earth belong to us all, and the earth itself to nobody.”
Wow, I know that people can become quite passionate about real estate, but wars and murders?
A word of advice for Conrad: stick to mortgage lending.
And a word of advice to me: take a sleeping pill next Friday night.
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 617.834.8205 or [email protected].
Andrew Oliver is a Realtor with Harborside Sotheby’s International Realty
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
You can REGISTER to receive email alerts of new posts on the right hand side of the home page at www.OliverReports.com.
@OliverReports
Essex County Housing Market 2014 Review
Here are the highlights for the Essex County market for 2014. Note the difference between the SFH and condo markets when compared with the prior peak.
Single Family Homes (SFH)
– the median SFH price increased 3% to $380,000, which is 4% below the 2005 peak of $394,000.
– sales dipped very slightly, while non-distressed sales increased modestly
Condos
– the median condo price increased nearly 5% to $252,000, beating the prior peak of $246,000 in 2005
– sales were down slightly and are still well below the levels seen in the 2003-06 period
Tax rates
– for FY2015 23 cities and towns have announced a reduction in the tax rate while in 11 towns the rate has been increased. Note that a reduction in the tax rate does not imply a reduction in the tax bill. I will be publishing a report in the near future on the average tax bill per city and town in Essex County to go with my recent Essex County 2015 property tax rates report.
I will also publish a fuller market report in the near future.
If you – or somebody you know – are considering buying or selling a home, or have questions about the market and/or current home prices, feel free to contact me on 617.834.8205 or [email protected].
Andrew Oliver is a Realtor with Harborside Sotheby’s International Realty
Sotheby’s International Realty® is a registered trademark licensed to Sotheby’s International Realty Affiliates LLC. Each Office Is Independently Owned and Operated
You can REGISTER to receive email alerts of new posts on the right hand side of the home page at www.OliverReports.com.
@OliverReports
Recent Comments