Maybe I'm just an optimist!
"Is Housing Close to a Bottom?" in BusinessWeek (12/22/08), caught my eye. "After more than two years of sharply falling prices in the U.S., single-family homes in many cities may be selling at or below their 'correct' prices, according to one estimate."
Since the national peak in 2006, home prices adjusted for inflation have declined 27% nationally to an average of $150,040 in the third quarter, according to S&P/Case-Shiller U.S. National Price Index. "However, prices are still dropping (nationally) and the percentage of loans in foreclosure and past due continue to rise."
How does this affect the Cambridge area? Well, the article's chart shows that the median price for a home in Boston is $324,000, which is 16%* BELOW what a home "should be worth, based on supply and demand factors."
What this may do is inspire some confidence in area buyers that this may be a good time to buy. Cambridge prices on average, have stabilized in the past couple of years, although activity (number of sales) is down significantly. There is also talk of interest rates declining to historic lows. This will no doubt revitalize the market except that some buyers will wait to see how low mortgage rates go before making a buying decision, or at least they may wait until they see a house they really like and want to buy.
Businessweek article and slideshow:
http://images.businessweek.com/ss/08/12/1211_numbers/index.htm?chan=magazine+channel_the+business+week
*Calculated by IHS Global Insight and National City Corp.
Sunday, December 14, 2008
Wednesday, September 17, 2008
My New Blog: Cambridge Area, MA Real Estate
Welcome to my new blog, established on Sept. 17, 2008. I have 21 years experience selling Cambridge area real estate and 15 years before that as a designer/builder/woodworker. I would like to offer my 35 combined years of perspective and advice on the Cambridge/Boston area real estate market here for anyone interested. And, time allowing, I will do my best to answer your questions.
With the chaos this week in the stock market, everyone wants to know if this will affect Cambridge real estate values. That remains to be seen. I don't have a crystal ball. It goes without saying that some buyers may be feeling the pain of reduced stock portfolios and, in the financial sector, lost jobs, and this may affect demand. Financing is still available for qualified buyers, with a capital "Q." Nowadays, surprise surprise: buyers actually have to qualify for a loan, unlike a couple of years ago.
However, in spite of what you read in the media, Cambridge itself has been insulated from the national economy to a degree. Anecdotally, most agents would say prices in Cambridge went down 5-10% from the peak in 2005. While this may be true on average for individual properties or areas , the market averages don't always bear this out. Many would say that the area market is bottoming or flattening out. While surrounding communities like Somerville, Watertown, Belmont and Arlington have perhaps not held their values as well as Cambridge, they are often doing better than you might expect after reading the local media.
From 2005 until 8/31/08, average Cambridge condo prices only dropped 1.47% and single family average prices actually went up 9.57%. But be careful of averages, they are just that. Every house, street, block and neighborhood is different. Averages are very much affected by the mix. If 100 luxury condos in a new development close in one year, that will pull up the average. Likewise, if there are only say, 100 single family homes closing in a year, the mix of houses and price ranges may affect the average prices. The best thing to do if buying or selling is compare your property to the market at that time. Try to buy or sell at a good price relative to the market.
And if you want, engage the services of a good Realtor who can guide you through the maze of the local real estate market you are buying or selling in. In sailing they call it local knowledge. When a huge tanker comes into Boston Harbor, a local pilot actually steers the ship into the port. This is someone with local knowledge of the winds, tides, currents, rocks, shoals, etc. Local knowledge in real estate can save you a lot of time, stress, angst and eventually, money.
Best of luck in your search!!!!
With the chaos this week in the stock market, everyone wants to know if this will affect Cambridge real estate values. That remains to be seen. I don't have a crystal ball. It goes without saying that some buyers may be feeling the pain of reduced stock portfolios and, in the financial sector, lost jobs, and this may affect demand. Financing is still available for qualified buyers, with a capital "Q." Nowadays, surprise surprise: buyers actually have to qualify for a loan, unlike a couple of years ago.
However, in spite of what you read in the media, Cambridge itself has been insulated from the national economy to a degree. Anecdotally, most agents would say prices in Cambridge went down 5-10% from the peak in 2005. While this may be true on average for individual properties or areas , the market averages don't always bear this out. Many would say that the area market is bottoming or flattening out. While surrounding communities like Somerville, Watertown, Belmont and Arlington have perhaps not held their values as well as Cambridge, they are often doing better than you might expect after reading the local media.
From 2005 until 8/31/08, average Cambridge condo prices only dropped 1.47% and single family average prices actually went up 9.57%. But be careful of averages, they are just that. Every house, street, block and neighborhood is different. Averages are very much affected by the mix. If 100 luxury condos in a new development close in one year, that will pull up the average. Likewise, if there are only say, 100 single family homes closing in a year, the mix of houses and price ranges may affect the average prices. The best thing to do if buying or selling is compare your property to the market at that time. Try to buy or sell at a good price relative to the market.
And if you want, engage the services of a good Realtor who can guide you through the maze of the local real estate market you are buying or selling in. In sailing they call it local knowledge. When a huge tanker comes into Boston Harbor, a local pilot actually steers the ship into the port. This is someone with local knowledge of the winds, tides, currents, rocks, shoals, etc. Local knowledge in real estate can save you a lot of time, stress, angst and eventually, money.
Best of luck in your search!!!!
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