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.

The standard guide to select a refrigerator size is to allow for 4 to 6 cubic feet per adult in the household. This is the first thing you should determine before buying a fridge. I suggest you consider the size of your family and allow for a little more extra room. Then, once you have determined the appropriate size, you can consider style options. The following are approximate measurements and prices for a variety of different refrigerator models.

Gain Storage Space with a Top Freezer

Size: 28–33 inches wide
Capacity: 23 cubic feet
Price: $479 to $2,199
Pros: Good amount of storage for small place
Cons: Doors swing wide, need to bend to access the refrigerator

Keep Fresh Food at Eye Level with a Bottom Freezer

Size: 24–36 inches wide
Capacity: 30 cubic feet
Price: $999 to $1,899
Pros: Fresh food is at eye-level and frozen food is down below
Cons: Must bend to reach freezer

Avoid Bending with a Side-by-Side Option

Size: 33–36 inches wide
Capacity: 28 cubic feet
Price: $1,149 to $3,099
Pros: Fridge on one side, freezer on the other—no bending; exterior ice and water dispenser; narrow doors fit a small kitchen
Cons: Too narrow to fit a pizza box into; not as energy efficient as other models

Save Energy with a French Door

Size: 28–36 inches
Capacity: 34 cubic feet
Price: $1,599 to $3,999 ($4,500 to $8,000 if you want a slimmer depth that looks built in)
Pros: Only open half the fridge when storing small items
Cons: Priciest option

Other Considerations

Most consumers do not buy a refrigerator on style alone. Here are some other factors that may be more important.
Energy efficiency: A refrigerator with the Energy Saver label means that it's in the top 25% of the market for efficiency, which means lower energy bills. Just be aware that buying a different style of fridge may also save you the same or more.

External water and ice dispensers: This is one of the most popular features; but be wary that fridges with this feature often require the most repairs.

Adjustable shelves and drawers: Space options ensure that you're always organized.

Air purifier: This feature can keep foods fresh for longer by eliminating bacteria.

Dual-cooling system: Dual cooling enables the fridge and freezer to keep cool air separate.

Control pad: Controls allow you to set the temperature and customize features.

Smart refrigerator: Optional features include energy monitoring, voice control, and displays for cooking timers, recipe, and family calendar, also can play music.

Prioritize the features that matter to you and identify the style you love and you will have found the perfect refrigerator. Refrigerators should last for 13 years, so make an investment that will pay off every day.

When you buy a home, do you know what will come with it?

Do you get to keep all the appliances, the art on the walls or the bird bath in the garden? Determining what will stay with the home and what will go with the seller will vary from transaction to transaction. Here’s how to determine what conveys with the home you’re considering, as well as tips to safeguard yourself when negotiating those extra items:

1. Check the listing information in the MLS. Ask your broker if the property has been on and off the market, and if it has, ask to see the original listing. Hopefully the seller specified the items included in their home’s asking price in one or the other of the printouts.
2. When in doubt, know the screwdriver rule. For the most part, if it takes a screwdriver to remove something, it’s considered real property - which is to say, a part of the property. This includes shelves, light fixtures and even curtain rods. But, if it’s hung on a nail and is removable, it's considered personal property and likely not included in the sale.
3. But, whether real or personal, all terms in a real estate transaction is negotiable. Negotiate with the seller if there’s something you’re interested in that isn’t declared part of the sale... or even if it is expressly excluded from the sale. Remember, the answer is always no until you ask! For example, when something is obviously personal property like a riding lawn mower or pool table, include it in your offer as the seller might not want to deal with moving/selling them.
4. Important Caveat - if the seller agrees to include big-ticket items, like a riding mower, you’ll want to discuss this up front with your mortgage lender. Depending on the type of loan you have, it could affect the appraisal or change the value of the property where you might have to pay cash for the item instead of being able to roll it into the mortgage. 

So, here are a few things you should know: unless the seller specifies that the washer, dryer and/or refrigerator convey, you should assume they’re not included. Same goes for the bird bath or anything else sitting on the ground, patio, or porch. You only get what is built in or fastened to the property. This said, I've seen sellers remove curtains/rods and even dig up plants/flowers. Both sellers and buyers need to be informed as to what is real and what is personal property!

“Governor Baker seeks big real estate sales tax hike to fund climate programs“

reads the headline in the Boston Globe. This is a totally bogus claim by Baker. What he is really saying is he wants more money to spend on infrastructure but he doesn’t want to come across as raising taxes on us because his recent re-election campaign opposed tax and fee increases. This latest tax hike is camouflaged as a “climate-change” necessity in order to make the tax hike more palatable to our climate-change sensitive citizenry. There is already so much waste in our state budget and now there’s going to be more; and this latest round of tax hikes is going to affect you more than others. If you have sold a property in Massachusetts, you know that sellers pay a sales tax from the proceeds of the sale.

Under current law, a home seller in most parts of the state pays $4.56 in transfer taxes per $1,000 of a purchase price. That means for a $500,000 home sale, a seller pays a $2,280 tax bill. If Baker’s proposal passes, the transfer tax rate would jump to $6.84 per $1,000, meaning for the same $500,000 sale, the tax bill balloons to $3,420. On Cape Cod, where the excise tax is lower than the rest of the state, the increase is actually more dramatic under Baker’s proposal. The $3.42 per $1,000 of a purchase price home sellers currently pay would jump by 67 percent to $5.70, or $5,700 on a $1,000,000 sale. Regardless of where you live, this is a problem that Charlie has not thought through.

Greedy Charlie has seen property values reach their highest levels and so now he thinks that this is a cash cow ripe for milking. Here’s why this is an unfair tax:

1. No one else is contributing to the cost of improving the things Baker says is needed "because of climate change" - not renters, not tourists, not anyone else besides property sellers.
2. If you bought your house 30 years ago for $150,000 and finally paid off your 30-year mortgage with a 5% interest rate, you will have paid $140,000 in interest on top of the $150,000 purchase price. Therefore, you won't really see a nickel of profit unless you are paid more than $320,000 for your property. It would appear that you can afford to pay $2,736 sales tax on a $400,000 sale price. However, what if you need every penny of the proceeds for medical care?
3. However, assume you buy this same house for $600,000 today. Assume the house appreciates 4% per year = $75,000. Assume you need to sell in 3 years. With a 5% interest rate, you will have paid $88,000 in interest after 3 years which means you will have invested $688,000 in your home. If you sell it for $675,000 less $37,000 cost of sale expenses, you only end up with $638,000 vs the $688,000 you would have already invested in home ownership - virtually a $50,000 loss. Thankfully, your mortgage balance would only be $572,000 so you wouldn't have to pay to sell your property. With Baker's new tax hike, that would increase your loss to $51,600.
4. BUT, short-sighted Charlie doesn't realize that market values are about to drop, or perhaps doesn't care if they do. There won't be a 4% appreciation rate to factor in over the next 3 years. In 3 years, values will be less than they are now and possibly dropping by 4% annually!! Your $600,000 property might only be worth $550,000 when you go to sell it. Assume the same mortgage figures and a sale price of $550,000. You will be UNDER WATER! You won't be able to afford to sell because you will have less than $520,000 to pay off your $572,000 mortgage... unless you can afford to write a check for $52,000 to sell. Oh, and don't forget Charlie's additional $1,600 climate change tax. You now have to write a check for $53,600. Your only reasonable option in this scenario is to rent your property out... hopefully for more than your mortgage payment.
5. Then you have ignoramuses who think that sellers will have to ask for more in order to cover the cost of the additional tax. WRONG!! Property values are not determined by what the seller wants or needs. Sellers can only get what buyers are willing to pay. 

I could go on and on but this post is already too long. Suffice to say, this is a bad tax and should not be passed even if it's dressed up as a desirable climate-change necessity.