Housing inventory remains tight at mid year
While there are about 10% more Single Family Homes (SFHs) currently available for sale than there were a year ago, the inventory as measured by the industry standard of months of supply remains quite tight at 4.4 months in Essex County as a whole, compared with 4.1 months a year ago. A market is generally regarded as being in equilibrium between buyers and sellers when there is 6 months of supply.
The table below shows the wide range of supply between 3 months or less in Beverly, Lynn, Middleton and Peabody, all the way to 12 months in Manchester and Wenham. (more…)
Do mortgage rates and sales volume really drive home prices?
Conventional wisdom is occasionally right, but I like to query it.
Let’s look at two widely quoted “facts” in real estate: that higher sales are a sign of a healthy market; and that mortgage rates drive prices.
First, I plotted the annual median price of SFHs in Essex County vs the annual level of sales. I think one can say that both sales and prices declined from 2005-2008, but from 2000-2003 prices went up sharply while sales were largely flat, and from 2011-2013 sales jumped but prices were up only modestly. Verdict: some correlation, but no consistent link between sales and prices.
Source: MLS, Oliver Reports
Next I turned to mortgage rates. I keep reading that the reason that sales are down a bit this year is because higher mortgage rates – coupled with higher prices – have made home buying less affordable.
Let’s look at history. I have plotted median prices of SFHs in Essex County against the 30 year mortgage rate.
What we see here is that falling mortgage rates have indeed coincided with periods of rising home prices, as in 2000-2004, but they also fell along with home prices from 2006-2009. And you will note that the absolute level of mortgage rates during the boom years of 2000-2005 ranged from 6-8%, compared with just over 4% today. Verdict: some correlation when mortgage rates dropped from very high levels, but no consistent link since.
Source: MLS, Freddie Mac, Oliver Reports
The decision to buy a home or scale up to a new home is complex. It is driven by a desire to have the security of owning one’s own home, and is influenced by a number of factors: confidence in one’s job and future prospects; confidence in the economy; confidence in the future of home prices.
I asked a respected and well-informed real estate professional yesterday where he thought mortgage rates were today compared with a year ago. He guessed 1/2% higher. The answer? Well according to Freddie Mac, the 30 year mortgage rate this week is 4.14%. A year ago it was 4.46%.
Next week I shall publish my mid-year reviews and these will show that in the first half of 2014 sales were down slightly, the mortgage rate was up, and prices were…….check back next Saturday to find out!
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
$750,000 reduction on Marblehead Oceanfront Compound
The top end in Marblehead is seeing activity. In the last 6 months there have been 1 (private) sale over $4 million and 2 over $3 million, while currently there are 1 over $4 million and 2 over $3 million pending. The highest number of sales over $3 million in any year is 4 in 2007 so 2014 may set a new record.
Now is the time to buy and enjoy summer on the water in Marblehead.
Enjoy the elegance of a bygone era ins this Marblehead Oceanfront restored family compound.
Sun-drenched, South-facing. Views to South Shore. Protected location.
Main house: 6,265 SF, 15 rooms, 7 beds, 4 ½ baths.
Marblehead’s “best located” Carriage house: 2,400 SF: great room, wide planked floors, wide picture window on ocean. Perfect for extended family or weekend retreat.
Great neighborhood. Pool. Private mooring available.Easy access to Logan Airport.
Originally listed at $4.5 million, now $3,749,000.
www.11CrownWay.com
www.MarbleheadEstate.com
www.Facebook.com/11 CrownWay
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
Note that the Listing Agent is also the owner of this property.
Which billionaire should buy Marblehead?
A recent Redfin article Which billionaire could buy your city? showed the cities that the wealthiest billionaires could buy. Bill Gates, for example, the world’s richest man (based on disclosed numbers, which rules out Putin and the like who do not disclose their billions), could afford to buy every one of the 114,212 homes in Boston.
The intriguing question is this: who would you like to buy Marblehead? Or more to the point, perhaps, who would you not want to buy Marblehead? (The total assessed value of Marblehead’s real estate is right on $5 bn.)
Rupert Murdoch ($14 bn) could afford it, but would he allow Kris Olson editorial freedom at the Marblehead Reporter?
We are the Birthplace of the American Navy, and have strong American Cup connections, but would Larry Ellison of Oracle ($52 bn) ban traditional sail boats from the harbor and replace them all with high tech vessels?
We don’t have to worry about the traffic nightmare if the Patriots were to relocate to Piper Field as Bob Kraft ($3bn) cannot afford Marblehead.
And surely the best news of all: there is no fear of Donald Trump ($4 bn) taking over and firing everybody.
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
Pending home sales reach record in May
The Massachusetts Association of Realtors (MAR) issued a report this week Future Indicators showing that pending sales of single family homes (SF) in Massachusetts in May were the highest for any May since records started in 2004, while pending sales of condos were second only to those in May 2005.
After the brutal winter we endured, it is not surprising that buyers emerged with gusto when the weather finally broke.
I can imagine that one of the most frustrating things for a journalist must be seeing a headline for an article which conveys a misleading impression (in general journalists write the story while the headline is written by somebody else). Thus the headline on this article is, in part: Price and Market Confidence Index down.
On reading the article, the median price for SFHs increased in May by 7.4% in May while that for condos was up 8.6%. So to what does the headline apply?
“As more inventory starts to make its way to the market, REALTOR®-member confidence that prices will continue to go up isn’t as strong as it has been,” said Ruffini. “However, buyer demand is strong based on pending sales and hopefully that should start to push the REALTOR® Market Confidence Index up in the coming months.”
Note that this refers to those Realtors who responded to a survey. It does not say that those Realtors think prices are not going up; just that they are not as strongly convinced as they were at this time last year. Since Realtors in general are independent contractors working alone I always suspect that such surveys are more a reflection of that Realtor’s personal business pipeline than a considered, research- driven analysis of the economy and real estate trends.
We have seen a number of press headlines in recent months suggesting that prices are going up more slowly than they were a year or so ago. Suppose prices last year went up from $400,000 to $440,000. That’s a 10% increase. Now let’s assume they go up by $40,000 again this year. Because the denominator is now bigger ($440,000 rather than $400,000) the increase this year is “only” 9%. So the headline writer will say: “price increase slowing.”
A primary goal of my articles is to help buyers and sellers of real estate understand what is really happening. When you see articles about real estate, go past the headline and read the actual reports. And then use common sense. And then you will know “the rest of the story.” And you can always ask me!
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
How quickly are Marblehead homes selling?
The peak time for listing homes for sale is the spring and the question we then ask is how quickly those homes are selling.
Just over a year ago the MLS changed the way it reported pending sales which also affected Days on Market (DOM) calculations. For an explanation of the impact of the changes read this article I wrote on the subject.
It is only now that we have a year of comparable data. I have looked at the number of SFHs in Marblehead that have received an accepted offer (or in MLS’s elegant expression “went pending”) month by month:
Source: MLS, Oliver Reports
74 homes have sold so far this year with a further 54 pending, taking the total sold and pending to 128. If the offer level of last year is repeated – and if we assume that houses that go pending by the end of October close by year end – we’d end the year with about 240 sales, which would be second only to 2004’s extraordinary level this century.
One measure often quoted is DOM, but it is one to which I do not pay much attention. Here’s why. In a strong market with limited inventory, houses that have been for sale for some time may eventually find a buyer. A good example would be the top end in Marblehead, where inventory has been large and houses have sat on the market for some time.
In the last couple of weeks two houses listed at $3.5 million have received accepted offers. These houses were on the market for 410 and 775 days respectively. Finally, they have found a buyer, which is good news. But if their DOM are included in the overall market figure it would offer a misleading impression of activity at other price points.
In summary, I would say that the current market shows steady sales, but there are no stories of multiple offers above listing prices as is common elsewhere. As I reported during the great recession, Marblehead didn’t participate in the crazy boom and largely sat out the consequent slump. This year prices will likely be back to or very near peak levels of 2005/6, but this will happen in a quiet and civilized manner – just like Marblehead itself.
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
American wealth hits all-time record as housing rebounds
According to figures released this week by the Federal Reserve, the net worth of American households and non-profit organizations increased by $1.5 trillion to a new record $81.8 trillion in the first quarter of 2014.
The good news is that roughly half the increase came from higher residential real estate values, while homeowners’ equity in their real estate increased 2% to 53.6% in the quarter.
Another positive sign is that household borrowing rose at a 2% annualized rate, indicating that we are becoming more comfortable about borrowing again, while that debt represents only 108% of disposable income,compared with 135% in 2007.
Overall these numbers, together with improving Consumer Confidence, suggest that the real estate recovery has a solid basis.
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
http://online.wsj.com/articles/americans-wealth-hits-new-record-in-1st-quarter-1401985427?mod=trending_now_2
Are you following these trends in luxury homes?
On a(nother) dreary Saturday morning, let’s take ourselves away and look at trends in luxury home sale listings. This table shows the changes in terms used in listings of luxury homes (those listed at 4 or more times the median price for their area) from 2012 to 2013 according to Trulia.
Overall, the trend shows increased emphasis on “expansive windows, great views and fitness amenities” and away from “indoor cooking and eating.” (more…)
Here come the sellers – are you ready, buyers?
Each week in Marblehead – and in some other surrounding towns – there is a Broker Tour of new houses coming to the market. This is when selling brokers have the opportunity to show their listings to other agents so that they can recommend the property to their buyers.
It is also a gauge of how much new supply there is. As the spring selling season gears up one would expect the number of listings to increase. It has. And this week there were 18 new Single Family (SFH) and 5 new condo listings on the Tour.It was a hectic morning dashing round to see as many as possible! (more…)
Which property would you buy for $5 million and change?
With the news that a newly listed 3,000 sq ft Boston condo found a buyer in 8 days , I found myself wondering what one could buy in Essex County for that money.
Here are a few current listings: which one would you buy? (more…)
Luxury Home Sales Soar
The National Association of Realtors (NAR) published a report this week stating that Luxury Home Sales Soar Above Historical Average.
In a number of posts over the last year I have suggested that with the stock market at an all time high it made sense for wealthy investors to turn their attention to real estate. And that now seems to be happening. (more…)
Is the housing market recovery really slowing down?
There have been a number of headlines this week highlighting the drop in mortgage applications and new home sales. What, if anything, does that mean for us here in Marblehead and Essex County? While national trends can have significance in framing market sentiment, it is important not to get confused by data from specific areas. We are not Las Vegas, and as the saying goes, “what happens in Vegas should stay in Vegas.” (more…)
Harborside joins the Sotheby’s International network
Some weeks I have to give quite a lot of thought as to the subject matter for my posts. This is not one of them.
“After five years of continued success, we are excited to announce our affiliation with Sotheby’s International Realty. We now offer all the advantages of a locally owned real estate brokerage combined with the vision, power and focus of Sotheby’s International Realty.”
As an Englishman I am very familiar with Sotheby’s and the huge impact they have had on real estate sales worldwide. As the owner of a waterfront property for sale I am very excited about the increased visibility I will get from Sotheby’s national and international marketing through 700 offices in 52 countries.
If you have a property which you believe would benefit from active marketing to a wider audience please contact me.
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
More signs of buyers at top end in Marblehead
A couple of weeks after I reported a sale over $4 million on Bartlett Street, a house on Ocean Avenue, listed at $4.5 million, has received an accepted offer just 5 days after coming back on the market. This house was on the market last year for 6 months at the same price.
Over the last year I have reported that the higher end was slower in Marblehead and throughout Essex County than it was closer in to Boston, and I speculated that this might be a timing issue. Like the ripple from a pebble thrown into a pond, it takes time for increased demand to move outwards from the epicentre of Boston.
But there is increasing evidence that it is now happening. The table below shows sales (and pending sales) by price range:
Source: MLS, Oliver Reports
Note the sale on Bartlett Street was a private sale and is not included in the above table.
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
Marblehead to vote on new flood map
At Town Meeting on May 5, Marblehead voters will be asked to approve new flood maps.
Becky Curran, Town Planner, has put together this FAQ about the proposal. Note that this action is to approve the maps. The FAQ clearly explains the separate provisions, which affect flood insurance, in the new Act passed recently to overhaul Biggert-Waters.
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
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