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 The market is in constant flux as houses come off the market due to seller fatigue, withdrawn for the holidays, or change of mind about selling, or as other new listings come on the market.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.

Buying and Selling Real Estate

starts off as a logical, thought process but more often ends up being run by emotions. You want to pick the best agent who knows the market and has lots of experience and references, but then rely upon your emotions when it comes time to make a choice. This is normal. After all, we are human. As such, we are doomed to repeat making decisions based upon "how you feel" versus based upon "what makes sense". When you are interviewing REALTORS to find the best one to represent you, your natural inclination will be to go with the one you like, the one with whom you "click". This kind of behavior might cost you thousands of dollars! Consequently, you must not let your need to "feel good" govern your decision making. Here is a real-life example of what you should avoid doing...

You interview two agents. The first one bounces into the room with excitement, oohing and aahing about your home. You talk some and are enthralled by the enthusiasm exhibited. The suggested list price is right where you think it should be. The next agent arrives. This one is quiet, contemplative. You have a sober chat about the market and go over a pricing strategy. Now, which broker would you choose?

Although the seller appreciated the sober approach and agreed with everything said, the seller felt as though the "click" was between the enthusiastic broker because the broker's excitement might translate into better marketing, such that buyers might be swept up in the same interest/excitement the broker has and buy the property. This makes sense, right? You get someone oozing enthusiasm for your property and who agrees with you on where to price it. 

Well, a thoughtful seller would have asked exactly how the brokers would go about marketing. Maybe even ask to see something that they have on the market or have recently sold to be able to compare marketing plans. As it turns out, I already had a passing acquaintance with this seller and chose a sober approach, focusing upon the real estate market and the economy instead of putting on airs. 

The end result: the home should have sold within two weeks. It didn't. It is a small condo and so there are only so many photos you can take of it. The enthusiastic broker took 7 interior shots and 3 exterior and one of the common area in the building. I would have taken 10-12 interior shots, 4-6 exterior shots, and 10-15 of the building and its amenities. I would also have created the unit's own web site to showcase the property in its best light versus confining my marketing to posting it in the MLS. The enthusiastic broker did not take the time to measure the unit or to provide a floor plan. Sadly, this "enthusiastic" broker is providing sub marketing for such a great property. We shall see just how long it takes and how many price adjustments will be required before it sells.

Congress has passed the "Blue Water Navy Vietnam Veterans Act."

The President is expected to sign H.R. 299, the "Blue Water Navy Vietnam Veterans Act." The positive side of this:

This legislation includes language which will eliminate the cap on the VA home loan guarantee. Veterans, under this legislation, will be able to purchase any home they qualify for using the VA home loan (with zero down payment). What does this mean for you, Vets? Prior to this legislation, the VA Guaranteed Loan Program set limits on how expensive a home you could buy with zero down payment. This might have been okay in cities and towns where housing was affordable; but when you are looking at the housing prices around Boston, that loan amount ceiling just didn't cut it. So, in prior years and areas you might have been able to buy a home as long as it didn't cost more than $485,000. But, as soon as the President signs the new bill, you can buy any house that you can afford with zero down payment!

There are two way in which you must qualify: 

1. Like buying with any other mortgage program, you must have enough income and good credit for the loan amount you need.
2. You must be an eligible Vet. VA eligibility is earned through service to our country. Active duty (Title 10) members can become eligible after 90 straight days during wartime or 181 days during peacetime. If not called to active duty, regular military members need to serve two continuous years, and Reservists and Guard members must serve six years. The VA loan benefits are available to most Veterans who served prior to the early 1980s as long as they have 90 total days of active military duty during WWII, Korea War or Vietnam War, or 181 continuous days of active duty between these conflicts. This is just a summary of the eligibility guidelines. Regardless of when you served, the VA has a rule regarding honorable discharge. To be eligible for VA home loans, a Veteran, if separated from the military, must have done so for reasons other than dishonorable discharge. Also, if your service was shortened due to an injury, illness, reduction in force or some other qualifying reason, the VA may still award home loan benefits in some cases even if you do not meet the minimum service duration requirements.

The negative side of this:

As introduced, the legislation would slightly increase some of the guarantee fees for all veterans using the VA loan program, in order to pay for the healthcare component.

3 Steps to Effective Decluttering

Spring cleaning is a ritual that most homeowners find themselves tasked with annually. While some people enjoy the activity, others find it tedious and difficult. When attempting to sell your home, you may be even more wary, as such daunting tasks can cause added anxiety and stress. Here are a few tips on how to help get rid of your stuff: 

1) Look for Support. Friends and family are often great motivators for getting rid of clutter. Think about asking other people's opinions on what should stay and what should go. If you're in the process of selling your home, your REALTOR could be a trusty resource. REALTORS have experience helping people just like you prepare their homes for prospective showings and eventual moves.

Sometimes I find myself face-to-face with a seller whose home is jam packed with stuff. The first thing I tell them is, "If you are planning on moving, start packing now!" This takes the stress off doing everything at once when the property sells and the sellers have 3 weeks to clear out! It also is a great means of decluttering and making the home feel more spacious.

2) Professional Help May Be Necessary. Sometimes the task at hand may be a bit too much for homeowners to handle. Years of clutter and storage build up quickly and figuring out where to even begin can be tough. So enlisting the help of a professional organizer can go a long way to speedily cleaning your home.

3) Consider Your Options. When you are actually ready to declutter, the question then becomes: Where should all the stuff go? There are a few options to consider when cleaning:

SELL. Some things you may want to sell include antiques or collectibles.

DONATE. Old clothes and furniture that you don't use anymore may be better suited for others in need.

STORE. Consider getting a storage unit off-site if you are unsure about getting rid of your possessions. If you are relocating, you can look into getting a POD or something similar.

TRASH. Can we et real? Some items you have stored have no value or are damaged. Throwing them away is a quick way to create much-needed space.

"It's a small world after all"

If inflation moves lower or is expected to move lower — rates must go lower as well. That's the situation right now.

The financial markets and interest rates also follow inflation on a global scale. Why is this important to you?

If disinflation or the rate of inflation moderates in places like Europe, interest rates in those countries move lower and tend to drag US interest rates lower as well.

This past week we watched home loan rates revisit one-year lows upon news that the European Central Bank or ECB downgraded their economic outlook and inflation expectations.

The ECB said they now expect 2019 economic growth to come in at a paltry 1.1%, down sharply from a previous forecast of 1.7%. Moreover, ECB officials said inflation, which is already very low, could move lower still.

Again, if inflation moves lower in large countries around the globe — we tend to see improvement in long-term US interest rates...that is the current trend.

Interest rates don't buy houses, jobs do!

The Bureau of Labor Statistics reported that just 20,000 jobs were created in February, well below expectations of 175,000. This was a disappointing number, but the unemployment rate fell to 3.8% and wages grew by 3.4% year over year...the highest level in a decade. Overall the labor market continues to expand and wages are rising — all good news for housing.