What Pandemic?!

As soon as the governor and mayors allowed the showing of homes for sale, sellers began putting their homes on the market. And what was the result? Buyers cast aside fear of the virus and turned out in droves to buy a home as if there were no pandemic.  Although home sales were generally down in July compared to sales in June, sales are typically lower in July. In fact, sales usually drop off even further in August. So, a slowing market at this time of the year has nothing to do with the Corona Virus. As ever, the following two points need to be kept in mind:

1. Sellers are best off when the Actual AR column value for their town is less than 1. However, all is not lost if the value is less than 3; but, as the number rises, there will be fewer buyers looking or making offers. Values which are less than 3 indicate that that town or neighborhood is still enjoying a seller's market. 

2. Buyers are best off when the Actual Ar value is greater than 6. Housing prices in areas of 6+ like Back Bay, Bay Village, Beacon Hill, etc., will be more negotiable than those seeing values less than 6.0. Another indicator which tells you if you can low-ball a seller is the number of days/weeks a property has been on the market. You cannot expect to steal a house that is new on the market; but you can certainly try if it has been on the market for a month or two!   

Since a table is published each month, you can scroll back to see whether the AR is rising, falling, or stable.

Update as of July 3

Check back each month around this time to see which way the real estate wind is blowing in your town!

Last month I was concerned about the effect the covid virus lockdown would have on June. Would things return to normal or would people still be afraid to venture out. Survey is in and the results are mixed!

In most areas, April and May are supposed to see the greatest numbers of sales for the year; but not so this year. The Covid virus lockdown really kicked our butts this spring! In many areas of the Boston Metropolis, not only have buyers returned as if there were no virus, towns like Canton, Milton, Natick, Quincy, Wayland, West Roxbury and Weston have outpaced normal year-to-year volume! In fact, Newton was up about 30% and Wellsley 50% over past years. The winner, though, goes to Dover with a year-over-year increase of nearly 100%! Dover was in dire need of a resurgence because it is on the brink of turning into a buyer's market.

On the other hand, other areas are still struggling for air. The neighborhoods of Chinatown-Leather District and Downtown are technically in a buyer's market and might well expect to see falling prices. South End is also fast nearing becoming a buyer's market. So, for the most part, my statement from last month was pretty accurate: "Although June sales are typically lower than April and May, we actually might see an increase this year as folks who are tired of being cooped up are willing to get out and get on with their lives."

Bottom line remains the same: do NOT expect sellers to be too negotiable where the number of months supply is less than 1; whereas deals can be made with reasonable sellers where the months supply is 5 or more.

If you are interested in buying in a town not listed below, please don't hesitate to click on Contact Us and ask for its market activity. See footnotes below on how to interpret the data in the table which follows.

1. This column (Mo Sales) includes the average number of sales per month of condos, houses and multi-families year-to-date. For comparison purposes, the next column shows how many properties sold just in the last month (June).

2. This column (On Mkt) tells how many listings are being actively offered for sale as of the date this has been posted. This number changes daily, and so, if you want an accurate count and view what listings are truly available, return to the home page and scroll down to the town or neighborhood you are interested in.

3. This column (Mos Supply) is calculated by taking the amount for each town or neighborhood in column 4 and dividing it by the corresponding amount in column 3. The result is the number of months it will take if sales continue apace just like the past month with no further listings added to the inventory. However, the real estate market is dynamic and the number of listings can change not only daily, but hourly!

4. This column (Actual AR) is a more realistic look at how long you can expect your listing to stay on the market before it sells. Although it is more realistic because it is based on a long-term average (2.5 years), the real estate market is cyclical and is always in flux due to many factors. Bottom line... this is the column to keep your eyes on.

As of today, the best neighborhood to have your property on the market is Mission Hill. The best town is Ashland. The most challenging neighborhood to be selling in is Downtown. The most challenging town is Dover.

Update as of June 4

Check back each month around this time to see which way the real estate wind is blowing!

Caveat... due to the shelter in place and fear of the corona virus, the market has taken somewhat of a hit and numbers might be skewed through June.

In most areas, April and May are supposed to see the greatest numbers of sales for the year; but not so this year. Although sales have remained somewhat robust in certain areas (see where Sold in May numbers are greater than the average monthly sales (January - May), sales in other areas remained down in May. Although June sales are typically lower than April and May, we actually might see an increase this year as folks who are tired of being cooped up are willing to get out and get on with their lives. Bottom line remains the same: do NOT expect pricing to be too negotiable where the number of months supply is less than 3; whereas deals can be made with reasonable sellers where the months supply is 6 or more.

If you are interested in buying in a town not listed below, please don't hesitate to click on Contact Us and ask for its market activity.

BOSTON HOUSING SALES DOWN!

Everyone wants to know what effect the corona virus/shelter-in-place lock downs have had and will have on real estate. Although some governors have labeled real estate an essential service, the media have sufficiently scared the public into cowering in their homes and not getting out and looking for their next home as much as they would normally be doing at this time of year. With very few exceptions, sales this April are less than what they should be. Since real estate markets vary from state to state, county to county, and even within cities, we shouldn't be interested in general stories you might read in the newspaper or hear on the nightly news regarding real estate sales
"nationwide" or in one state or another. What matters is what is happening in your town. Consequently, what follows below is a table showing 63 individual towns and neighborhoods in and around Boston to give you a hyper-local feel for what is going on in our "local" area.

The table has four columns next to each town. The first is the average number of sales from Jan 1, 2020 through Apr 30, 2020. Therefore, 20 total sales = 5 on average per month. The second column shows what impact the shutdown has had on April sales. You will notice that 57 of the 65 market areas saw a decrease in the rate of sales when April should have seen a significant increase. This does not bode well for May.

The third column shows the number of homes on the market and available for purchase as of May 4. Not unexpectedly, there are fewer homes on the market that what we would normally expect due to the fact that sellers, unless they are desperate to sell, do not want strangers parading through their home and possibly contaminating it. Although determining absorption rates usually utilize the average number of sales per month, for example, 5.5 for Allston, given current circumstances, I think it wiser to use the most recent month's sales to calculate how many months it will take for the current inventory to sell off. The caveat, however, is that this assumes that no other properties will come on the market until all of these sell.

Real estate markets are dynamic. They change daily. So, although absorption rates are constantly changing, they do give us an idea of whether we are in a buyer's or a seller's market.

BUYERS

You obviously want to get a good deal on your purchase, right?! Your strategy should be to find homes that have been on the market a long time. The usual reason for them not selling boils down to the property being overpriced. Being overpriced gives you the opportunity to make a low-ball offer without worrying about others bidding up the price which occurs in a seller's market. Ideally, you want to be buying in a buyer's market. A buyer's market occurs whenever there is so much inventory on hand that it will take more than 6 months for everything to be sold. If you look down the fourth column for numbers 6 or more, those are the places you should be able to negotiate a good deal.

SELLERS

We have had a long, great seller's market beginning back in 2012. Prices began rising until finally plateauing in 2018. Robust markets where sales have continued at a good pace have not seen many bidding wars, certainly not above asking price; and so, you have to be careful about how you price your property. You don't want to be too high and have it sit without showings and/or offers. The higher the number in the fourth column, the more realistic you are going to need to be about pricing. The question you now have on your mind is likely: should I put my property on the market now or wait? Since the best time to sell is March through June, you cannot afford to wait. Sales drop off precipitously in the summer time!

Interpreting absorption rate data:

0-3 months = seller's market. 3-6 months = balanced market. 6+ months = buyer's market.

BOSTON HOUSING INVENTORY DOWN!

Between late summer and the end of the year many areas in Boston have defied history. An expanding inventory has suddenly contracted and have not only slowed the inevitable change from a balanced market (3-6 months of inventory) but have reverted many areas back into a seller's market! The chart below shows over 60 towns/neighborhoods around Boston, providing you a glimpse into which towns/neighborhoods are best to buy or sell in as of today. The market is in constant flux as houses come off the market due to seller fatigue, withdrawn for the holidays, or change of mind about selling, or as other new listings come on the market. 

Typically, sales from November to January shrink in number. You will see below that every town or neighborhood has seen a drastic drop in home sales for the first 18 days in December relative to the average number of sales per month from Dec 1, 2018 through Nov 30, 2019.

BUYERS

Generally speaking, the best time to buy is now through January as competition will really start to heat up in February. If you want to know in which towns you might get the best deal, look down the column of # of months supply and see which are at 6 months or greater. Another way to look at it is to see which areas have had the fewest number of sales this month... especially if the number that have been selling on average is drastically higher.

SELLERS

The hottest time to sell is from February to April. Therefore, get your home on the market in January!!

Cost to Buy/Sell Your Home on the Rise

When you buy or sell a home in Boston there are unavaoidable fees whether you sell with or without a real estate broker. These fees include the property transfer tax (aka stamp tax) as well as recording fees. These are scheduled to go up. For details on recording fees, please click here.

WETLANDS BY LAW, #0250

Sponsors: Wu, OMalley, Flaherty, Edwards, Essaibi-George, Flynn, Janey, McCarthy, Zakim, Campbell

Status: March 18th, Public Hearing, GBREB testified in opposition, vote scheduled Wednesday, December 11th at noon.

GBREB has joined NAIOP Massachusetts in expressing our concerns regarding several items in the proposal that will cause chaos for existing projects by taking effect immediately upon a vote by the City Council. It also would mean that projects could be denied if they have an effect on contagious land and regulate projects outside the buffer zone. Notice to abutters would be required within 300 ft. vs 100 ft, which is consistent with other wetlands bylaws. This would be unheard of in an urban area. Lastly, it requires applicants to consider the “cumulative effect” on “foreseeable future projects” found in Boston Master Plans or other documents approved by the City.

SALES TAX ON REAL ESTATE

Sponsors: Edwards, Janey, Wu, Ciommo, Esssabi-George, Flaherty, Flynn, Garrison, O’Malley, Zakim and Campbell.

Status: March 19th public hearing. GBREB testified in opposition. Vote scheduled Wednesday at noon

On Monday, the Committee on Government Operations released a report regarding the real estate sales tax introduced by Councilor Lydia Edwards. The Committee report included a report prepared by the Walsh Administration and PFM Group Consulting on the Economic Impact of a Real Estate Transfer Tax. The bill reported out of Committee changes the proposed sales tax from 6% to 2% and strikes in its entirety the language regarding a 25% “flipping tax” on repeat sales. It also has been amended to allow but not require the City of Boston to partner with the Registry of Deeds for the Collection of fees.

NEW LANDLORD VOTING REGISTRATION REQUIREMENT, #0549

Sponsors: Zakim, Wu, Ciommo, Edwards, Essaibi-George, Janey, Flynn, O’Malley and Campbell

Status: Public Hearing, Tuesday December 10th at 3:00, posted on the Council Agenda for Wednesday.

Docket #0549, entitled “Ordinance regarding providing voter registration to tenant” would require all residential landlords to provide voter registration forms to all residential tenants at the time of lease signing. While the proposed Ordinance would exempt owner-occupied dwelling and certain institutional housing, it would require the inclusion of these voter registration forms with all leases and would subject any property owner or manager to a $100 fine and other potential liability if they fail to comply. It also imposes fines and potential liability for treble damages and attorney’s fee pursuant to G.L. c. 93A for any ministerial error. Docket #0549 imposes liability not only on the landlord, but on managers and rental agents.

Your voice is critical! Please keep up the pressure and call the Boston City Council and let them know you oppose ANY new sales tax on homes or commercial property and to consider reasonable amendments to the wetlands by law before rushing it through.

CONTACT YOUR CITY COUNCILOR TODAY!

Real estate is often in the news. Talking heads are sharing about how houses are appreciating or depreciating in value based upon national sales figures. However, real estate markets are not only NOT national, they are not just local either. They are hyper local. The Boston metroplex is not a national market. It is local to you and me here in Boston; but, the market can be vastly different in different areas of Boston!

Here is a chart of property data in and around Boston, comprising about 60 towns and neighbors:

First, some vocabulary tips!

•  Locality can be a town or neighborhood of Boston.
•  Available means a property that no one has made an acceptable offer on.
•  Pending means a property has an accepted offer but has not closed yet.
•  Closed means money and title have transferred between seller and buyer.
•  Total on the top line means all available and pending properties added together
•  Sold - 7/31 means the total number of closed sales Jan 1 - Jul 31, 2019
•  Absorption rate is the average number of sales per month between 1/1/19 and 7/31/19
•  Months Supply is the number of months it might take for all the existing properties to sell**

** Months' supply of inventory does not take into account that new properties come on the market almost daily and that some sellers give up and take their homes off the market voluntarily! This means that the number of months of inventory is not a fixed fact but is a moving target!

Second, why is this chart important to you?

The bottom line is what you might find reported in the Boston Globe.
   "There is a 4.2 supply of inventory in the Boston area as of today's news. Realtors say that a 0-3 months' supply
   indicates a seller's market, a 3.1-6 months' supply indicates a balanced or neutral market, and 6.1+ months' supply
   of inventory indicates a buyer's market. A seller's market means bidding wars and rising prices. A buyer's market
   means falling prices. Boston is in a "neutral" market."

Such a story, although using real, accurate figures is "fake news!" Why? Because real estate is not just local, it is hyper local. Although it points to the truth that our seller's market has come to an end and we are eventually going to find ourselves in a buyer's market, this is just painting with a broad brush. If everyone in the Boston metroplex believes and acts as if we are in a neutral market, he will find some pleasant and not so pleasant surprises! Values and market timing are NOT the same from town to town or neighborhood to neighborhood. Look at Arlington or Belmont. Their supply of inventory is under 3 months each and so they are still enjoying a seller's market and might be surprised at how fast his property sells and for top dollar while places like Revere or South Boston ARE in a neutral market and it might take awhile to sell and maybe not for as much as the seller is hoping to get. On the other hand, if you look at Weston or Westwood, they are already deep into a buyer's market and are finding their properties sitting on the market, getting stale at the price they were hoping to get. They have to lower their prices if they want to sell sooner than waiting for the 10 months' supply to be finally absorbed.

Just so you know, hyper local does not simply indicate "confined to a town". In large towns, some parts sell better than others. Some price ranges sell better than others. Therefore, even in a town where you have, on average, a 4-months' supply of inventory, each price tier is likely different. One tier might sell in within a month. Another tier might not sell for a year!

If you'd like to know what market you are in specifically, please reach out to me and I will be glad to drop by and give you a hyper local estimate of value and time to sell.

PSA for buyers, sellers, and real estate agents alike - 45 days should be the time frame used in offers to purchase for getting a new mortgage. Think it's a benefit to go 30 days?  Well, with the yield curve on treasuries officially inverting today, we're officially in a refinance boom. What does that mean? Longer turn times for lenders - literally every lender in the country is experiencing an influx of refinance volume - at levels rarely seen before.

The last time rates were this low, consumers had nowhere near the levels of home equity they currently do. Last time they had home equity in the amounts they currently have, rates were closer to 6%.  We currently have the perfect storm of huge rate drops (down from the 5's last November to the 3's today) immediately following a 6-year period of extreme home appreciation.  For home owners, this means the time is now to refinance - either for rate/term refinances or cash out refinances (rarely is the market primed for both to offer such huge benefits).

For real estate agents, this means setting oneself (and more importantly, clients) up for failure if trying to push for 30-days or less escrow periods.  

Lenders might still be telling you they can get stuff done in 30 days; and the reality is, they probably can - but with operations teams being maxed out with an overload of applications and bulging pipelines, turn around times are being affected proportionally. Underwriters simply can’t get everyone’s file reviewed as quickly as we want.

If your option is to push for an escrow period of 30 days or less and almost guarantee a stressful closing for just about every party involved, or, to set your escrow period at 45 days and ensure everyone is happy, all deadlines are met, and all expectations are exceeded, which scenario makes more sense? Why choose the former? Just don't do it!

The verbiage everyone I will be using for the foreseeable future is "45 days or sooner, if all parties agree", in any and all contracts where that's possible. Buyer agents are still feeling the pressure of "our offer won't get accepted with more than 30 days" in many hot markets with tight inventory, so they're still going to push for 30 or 21 day escrows. Lenders, feeling the pinch and afraid of losing business, will succumb to this same pressure - and then everyone will be upset come closing time because deadlines are being missed or things are not happening until the very last minute. Again, the answer is simple... Just don’t do it!

TWO NEW CONSTRUCTION HOMES FOR SALE!!

Stop previewing all of the old houses in Boston with their tiny closets, no or window air conditioning, and bathrooms or kitchens that need enlarging or updating?

Admittedly, there is not a lot of single-family new construction homes to choose from in Boston. Fortunately, however, you now have an opportunity to buy a brand-new home in a great location. 5

2 and 54 Birchwood enjoy Boston's low tax rate and are just minutes from all the great shopping available in Dedham and Westwood. The sooner you buy, the more custom touches you will be able to add! The homes will be available for occupancy in early fall.

Click on this link to follow the construction progress.