The Stike Report

December Home Sales Jump 6.5%

2009-01-26T17:40:00.002-05:00

Sales of existing homes posted an unexpected increase in December 2008 according to the latest figures from the National Association of Realtors. Buyers have been taking advantage of dramatically lower prices, particularly in distressed areas of California, Florida, and Nevada, where foreclosures have swamped the market.

The median sale price nationwide dropped to $175,400 in December, down 15% from the year before. The December figure is the lowest since May 2003, and the 15% decrease is the largest year-over-year drop since record-keeping began in 1968.

Rents on the Rise

2008-10-30T13:23:00.002-04:00

According to an October 30 article in The Boston Globe, Boston-area rents jumped 4.2% over the past 12 months, the largest increase in 7 years.

Why are rents rising? Because demand for rental units is increasing, partly due to the new tougher lending standards (which have forced many potential first-time homebuyers to continue renting instead) and partly due to the wave of foreclosures (which has forced many homeowners back into the rental market).

Foreclosures Down Slightly in August

2008-09-25T16:07:00.002-04:00

998 foreclosure deeds (the final step of the foreclosure process) were recorded in Massachusetts in August 2008, down 2% from August 2007 levels. Petitions to foreclose (the first step in the process) were down even more dramatically in August. There were 943 such petitions filed in Massachusetss in August this year, compared to 3,112 in August last year - a drop of nearly 70%.

MA Home Prices Hit 6-Year Low

2008-09-23T16:25:00.003-04:00

The median price of a single-family home in Massachusetts dropped 9% in August, sinking to the lowest price for the month of August in 6 years, according to a new report from The Warren Group. The median sale price for single-family homes in August was $323,000, compared to $355,000 in August 2007. That figure is the lowest price for August since 2002, when the median sale price was $297,500.

The median home price year-to-date in 2008 is $318,000, down 9.1% from the same time period in 2007. And total sales year-to-date are down nearly 17% from 2007 levels.

Holbrook Prices at 2002 Levels

2008-07-10T09:51:00.002-04:00

The median sale price for a single-family home in Holbrook was $242,000 in the first six months of 2008. That represents a 21% drop from the first six months of 2007, and is the lowest figure since 2001, when the median sale price was $189,450.

Here are the recent median sale prices in Holbrook for the first 6 months of each year:

2000 - $171,900
2001 - $189,450
2002 - $244,900
2003 - $260,000
2004 - $301,250
2005 - $310,500
2006 - $317,000
2007 - $305,050
2008 - $242,000

From 2000 - 2006, the median sale price increased by 84%. Since 2006, the median sale price has dropped 24% in two years.

Foreclosure Update

2008-07-01T11:49:00.003-04:00

There was good news and bad news on the foreclosure front here in Massachusetts recently.

A new state law that took effect May 1 has postponed the first step in the foreclosure process for many homeowners, as it requires lenders to give borrowers 90 days to "cure" a default before filing a formal "petition to foreclose". As a result, petitions to foreclose dropped nearly 90% in May. There were "only" 390 petitions to foreclose filed in May, compared to 3,327 the month before.

On the "bad news" side, foreclosure deeds (the final step in the foreclosure process) broke another record in May, and have more than doubled so far this year. There were 1,405 foreclosure deeds recorded in May 2008, an increase of 108% from May 2007. So far this year (through May 31), there have been 5,576 foreclosure deeds recorded in Massachusetts. That's a 140% increase over 2007 levels, when there were 2,327 foreclosure deeds recorded in the first five months of the year.

Sales and Prices Continue to Drop

2008-06-27T13:33:00.002-04:00

Single-family home sales in Massachusetts continued their steady decline in May, falling nearly 13% compared to May 2007 according to a report released earlier this week by The Warren Group.

There were 3,739 single-family home sales in May 2008, a drop of 12.7% from 4,284 in May 2007. Year-to-date sales (through May 31) are down 20.4% from 2007 levels, from 17,372 last year to 13,822 so far this year.

The median sale price also dropped 7.8% in May ($322,500 this year, compared to $350,000 in May 2007) and is down 8.6% year-to-date.

According to Timothy Warren, CEO of The Warren Group, "The first sign of a recovery in the housing market will be a rebound in home sales. We're not there yet, but this is the second month in a row that sales have shown smaller declines than we've been seeing since the last quarter of last year."

Holbrook Prices Drop 22% in First Quarter

2008-04-29T11:34:00.002-04:00

According to The Warren Group, the median sale price for single-family homes in Holbrook was $236,900 in the first quarter of 2008 - a 22% decrease from the same time period last year. The median sale price in the first quarter of 2007 was $305,100.

Holbrook was one of several South Shore communities to see sale prices fall by 20% or more so far this year. Others included Abington (-21%), Whitman (-22%), Hull (-22%), Hanover (-23%), Bridgewater (-24%), and Scituate (-26%).

Among the 26 South Shore towns we track, the typical price drop for the first quarter of 2008 was approximately 10%. Hingham and Norwell were the only two that saw significant price increases from the prior year - up 18% and 14%, respectively.

Long-Range Forecast

2008-04-10T15:36:00.002-04:00

Recently, we've been hearing more and more sellers (plus potential sellers, who were considering putting their home on the market) say they'd prefer to wait a year or two until prices rebound. While that may sound like a good idea if you don't need to sell right away, recent history has shown that while prices should eventually rebound, it may take A LOT longer than a year or two for prices to return to the peak levels we saw in 2005 and 2006.

From 1988-1991, median sale prices in our hometown of Holbrook dropped 12%. If you were considering selling at that time, but decided to wait until prices rebounded, you would have had to wait ANOTHER SEVEN YEARS for prices to return to 1988 levels! It wasn't until 1999 that the median sale price in Holbrook finally surpassed where it had been in 1988.

The lesson? If you're waiting for prices to return to 2005 levels before selling, you may have to wait a very long time.

Home Sales Drop in February

2008-03-28T15:56:00.004-04:00

The Massachusetts Associaten of Realtors (MAR) reported earlier this week that sales of single-family homes dropped 23% in February when compared to the same time period last year. There were 1,857 single-family home sales in Massachusetts last month, compared to 2,409 in February 2007.

Median sale prices dropped 4.6% from $325,000 in February 2007 to $310,000 in February 2008. The February 2008 figure was also down 3.4% from January levels, when the median price was $321,000.

For condominiums, the drops were even more substantial. There were 827 condos sold in February 2008, a 35% decrease compared to February 2007. And median sale prices of condos were down 6.7% from $270,000 in February 2007 to $252,000 in February 2008.

Fewer New Agents

2008-03-17T15:54:00.002-04:00

Sale prices aren't the only things that have been declining in the local real estate market recently. The Massachusetts Board of Registration of Real Estate Brokers and Salespeople issued 5,771 new licenses in 2007. While that sounds like a lot, it represents a 40% drop from 2005, when 9,550 new licenses were handed out.

FHA Increases Loan Limit

2008-03-08T13:57:00.002-05:00

The Federal Housing Administration (FHA) has increased the amount that buyers can borrow when purchasing a home, which may spark additional buying activity, especially among buyers who would otherwise be forced to use "jumbo" mortgages with higher interest rates.

Under the new limits, buyers can borrow up to 125% of the median sale price in the area. In Norfolk and Plymouth counties, this means the loan limit for an FHA loan is increasing to $523,750, and qualified buyers can obtain an FHA mortgage with as little as 3% down.

For more information about the new FHA rules, or a referral to a mortgage professional who can discuss your specific needs in more detail, please contact Shep, Bob, or Florence at 781-767-5550.

"House Lust"

2008-02-26T20:29:00.003-05:00

If you're interested in the psychology behind the recent housing boom (or bubble?), pick up a copy of the new book by Daniel McGinn, House Lust - America's Obsession With Our Homes. Written by a Boston-area Newsweek correspondent, it's an enjoyable overview of our country's recent infatuation with all things real estate, from the "McMansion" building boom to home makeover television programming to get-rich-quick investment schemes. When you're not laughing at some of the gross excesses that McGinn catalogs, you'll probably be cringing at how closely many of his observations hit to home.

Supply and Demand

2008-02-17T16:28:00.002-05:00

Any economics student can tell you that two factors drive the price of just about any product - Supply (how much of something is available for sale), and Demand (how much of it people want to buy). When Supply goes down, prices usually go up. And when Supply goes up, prices usually come down.

Looking at the supply of homes currently available for sale in Holbrook, we see that Supply has come down considerably from the record highs of the past couple of years. On February 1, there were 50 single-family homes listed for sale in Holbrook in the Multiple Listing Service. While that may sound like a large number, there were 69 homes for sale on the same date in 2007, and 63 in 2006. In other words, the supply of homes is considerably smaller today than it has been in recent years.

Does that mean prices will begin rising soon? Not necessarily. Supply is only half the equation. And the current supply is still far above what we saw in 2004 and 2005, when prices were soaring. (On February 1, 2005, there were only 23 single-family homes listed for sale in Holbrook, and on February 1, 2004, the number was 16!) But it does suggest that the local real estate market may be closer to "balancing out" between buyers and sellers, which would result in prices beginning to stabilize instead of continuing to drop each year.

What's a "Short Sale"?

2008-02-07T11:12:00.000-05:00

If you've been following the fallout from the recent wave of foreclosure activity in the Bay State, you may have heard the term "short sale" being used more often. So, what exactly is a "short sale"?

Basically, a short sale is a sale of real estate in which the purchase price is not enough to pay the amount that is owed on the house, and the mortgage holder agrees to "write off" the difference. We see them most often in situations where a homeowner is already facing foreclosure, and owes their lender more than the house can be sold for in the current market. Instead of foreclosing on the property, many lenders would prefer to "take what they can get" when the house is sold and allow the homeowner to walk away without paying the difference.

Why would a lender agree to a short sale? Because lenders generally do not want to become property owners. If possible, they would prefer to avoid the time and expense associated with foreclosing on a property, as well as the additional time and expense required to sell that property to a new owner down the road.

2007 Sales Were Lowest in 15 Years

2008-01-30T15:34:00.000-05:00

According to the January 28 issue of Banker & Tradesman, there were 50,435 home sale transactions in Massachusetts in 2007, down 8% from 2006 levels, and the lowest annual figure since 1992.

Median sale prices statewide also dropped, from $325,000 in 2006 to $310,000 last year. The median price in 2007 was 10% below peak levels, which reached a record $345,000 in 2005.

As you review these figures, it's important to note that these are for the entire state of Massachusetts, and that there is WIDE variation from region to region and even from town to town.

Bristol and Plymouth Counties were particularly hard hit last year, with total sales declining by more than 10% and median prices falling approximately 8%. In Norfolk County, however, sales fell by less than 5% and the median price dropped 3%.

To learn more about the current market conditions in your town, contact Shep, Bob, or Florence at 781-767-5550. We'd be happy to answer any questions you have.

Boston Market Better Off than Most?

2008-01-25T10:46:00.000-05:00

At least one analyst thinks the Boston housing market is better positioned for a recovery than other areas of the country, according to an article in the January 21 Banker & Tradesman.

Economist Robert Denk predicts that income growth and low unemployment will help the Boston market rebound. "The key fundadmental drivers for housing are income, employment, and population," Denk said. "If you're not doing disastrously bad on any of those points, then you're going to have a solid housing market."

According to Denk, the markets that will struggle the most are those that saw extreme price growth in short amounts of time, as well as heavy sub-prime lending, such as California, Florida, Las Vegas, and Phoenix. While the Boston area did see a sharp increase in prices over the last decade, those increases still pale in comparison to other areas of the country, which experienced gains of up to 20% PER YEAR.

Denk also cautioned against paying too much attention to national real estate trends and statistcs. "What's going in national trends is important, and it's valuable, and it's meaningful, but it's not always going to help people in the local markets to really understand what's going on there."

If you're thinking of buying or selling on the South Shore in 2008, give The Stikeleather Team a call. We'd be happy to meet with you to discuss what's happening right now in our local market, and to answer any other questions you may have.

Final 2007 Numbers Are In

2008-01-18T12:03:00.000-05:00

Here are the final 2007 sales figures for various local towns as reported in the January 14 issue of Banker & Tradesman. Data is for single-family homes only.

Median Sale Price

Abington - $290,500 (-6% from 2006)
Avon - $267,500 (-9%)
Braintree - $355,000 (-4%)
Brockton - $223,000 (-17%)
Holbrook - $266,000 (-12%)
Randolph - $282,000 (-12%)
Weymouth - $310,550 (-6%)

Total Number of Sales

Abington - 115 (-4%)
Avon - 44 (-12%)
Braintree - 288 (-15%)
Brockton - 641 (-30%)
Holbrook - 103 (-31%)
Randolph - 275 (-26%)
Weymouth - 444 (-10%)

As you can see, every town saw a decline in both the median sale price AND the total number of homes sold. Our hometown of Holbrook was particularly hard hit, with prices down 12% and the total number of sales down 31%.

Great Rates!

2008-01-11T08:26:00.000-05:00

Mortgate rates are at their lowest point in more than two years, according to bankrate.com. The average rate in the US for a 30-year fixed rate mortgage dropped to 5.88% this week, the lowest it's been since September 2005.

If you're in the market for a new home, now is a GREAT time to buy. Rates are low, and you'll have plenty of properties to choose from. The only trick is making sure you qualify for a loan. According to one estimate, 60% of buyers who got mortgages last year couldn't qualify for those same loans today, thanks to tighter lending and appraisal standards in the mortgage industry.

Looking Ahead

2008-01-08T14:38:00.001-05:00

What's the real estate forecast for 2008? According to Banker & Tradesman (a weekly newspaper that focuses on the Massachusetts real estate market), it's mixed.

In a January 7 article, B&T reported that "those hoping for a housing market recovery in 2008 may be disappointed." A particular area of concern is steadily increasing foreclosure activity, which increases the supply of available homes, and puts additional downward pressure on prices.

In the same article, however, the head of the Massachusetts of Association of Realtors (MAR) was quoted as saying "the Massachusetts market has good underpinnings and is poised to recover." Officially, MAR projects that 2008 sales and prices will be about the same as they were in 2007.

How accurate are these projections? Well, let's just say that if anyone could REALLY predict what the real estate market would look like in 6, 12, or 24 months, they'd be very rich and living on an island in the Caribbean already.

From our vantagepoint, we are already seeing more activity this winter (in terms of showing appointments, offers, and actual sales) than is typical for December and January. Prices aren't increasing (yet), but as more buyers decide that it is finally time to buy, they should begin to stabilize.

Stay tuned...

The Year in Review

2008-01-04T20:22:00.000-05:00

How was the local real estate market in 2007? That depends on who you ask.

If you were selling a home, 2007 was a challenging year. Sale prices were down. Average time on market was up. And the total number of homes sold was down. For buyers, however, 2007 meant lots of properties to choose from, more affordable prices, and mortgage interest rates near historic lows.

So, if 2007 was such a "Buyer's Market", why weren't more people buying? Some buyers seem to be waiting for prices to drop even further, while others have discovered that tighter mortgage rules mean they can no longer qualify for the loan they need - either because their income or credit scores are too low. or they do not have enough saved for a down payment. (We'll post more on the mortgage mess in the coming weeks.)

No matter how you slice the data, 2007 was a down year for real estate sales. Here's a quick look at the 2007 median sale price in several local communities, and how that figure compares to 2006:

Avon - $290,500 (-7.8% from 2006)
Braintree - $367,500 (-3.3%)
Brockton - $245,00 (-10.9%)
Holbrook - $285,900 (-7.5%)
Randolph - $303,000 (-7.9%)
Weymouth - $330,000 (-1.5%)

It's also important to keep in mind that sale prices are only part of the picture. In Holbrook, for example, there were only 92 single family homes sold in 2007, down from 119 in 2006. As a result, TOTAL market volume in Holbrook fell 27% from 2006 to 2007.

(All data in this section is from the Multiple Listing Service Property Information Network (MLSPIN) and is for single-family homes only.)

Happy New Year!

2008-01-03T12:15:00.001-05:00

And welcome to The Stike Report - the official "blog" of Stikeleather Real Estate.

One of our resolutions for 2008 is to improve our Internet presence, through our own website (www.stikehomes.com), email newsletters, and this blog, which will provide up-to-the-minute information about news and trends in the Boston-area real estate market, and more specifically in Holbrook and around the South Shore.

Check back often, and feel free to pass along this link to anyone else you think might be interested. And if you have any comments or questions, feel free to post them here.

Happy New Year, and best wishes for a prosperous 2008!