What Goes Up…A Look at the 2015 Real Estate Market in Greater Boston & Jamaica Plain

It’s never easy to predict what will happen next in any industry.

This year saw many folks in my industry eating their proverbial hats. B After an absolutely booming 2013 it was hard to believe that 2014 could keep up the same intensity. B Well, for most of the same reasons that 2013 was such a strong real estate market, the 2014 market doubled down:

• Inventory remained anemically low.
• The resuscitating economy gave buyers a reason to feel good about making a purchase.
• The mortgage interest rates mostly stayed below 5%.

Mostly it was the inventory. B Much of the state and many parts of the country saw the same improvements in the economy and the interest rates are largely universal, but the inventory in Metro-Boston remained low which, of course, elevated the demand.

Here’s a look at the past 8 years in Boston. B The amount of properties pended and sold has been much more consistent. B Compare this chart to value changes of the same period.

Inventory for all of Boston (condos, single families and residential multi-families) since 2006.

 

Same time period. Same area and property types. But this shows average sale price (and list price). It spikes when the inventory tanks. Pretty easy to see.

 

So what’s the story for the year ahead? B What if, all of a sudden, the market is flooded with inventory? B Will the prices drop as precipitously as they had risen?

I don’t think so–at least in not around these parts.

But let’s narrow the focus down a bit from all of Greater Boston. B If we’re going to open a can of worms, let’s open Jamaica Plain.

The perception of Jamaica Plain has been, for several years, that it is a strong, resilient, recession-resistant market. B The numbers validate this perception.

And here’s what we can expect in 2015:

Since 2003-2004, Jamaica Plain has gone from a real estate market with plenty of upside and lots of potential to a bona fide blue chip real estate market for Metro Boston. B Few other areas or neighborhoods have seen as much growth in property value, nor have they experienced the growth and development of commercial spaces. B Sure, the Fenway has, overnight, become its own mini-metropolis, and the Seaport district has gone from industrial wasteland to Innovation wonderland. B But these were largely created from empty space and comparatively unlimited zoning restrictions. B B JP’s growth has been a bit more organic. B B We’ve seen delicious new restaurants, nifty shops, local markets, and community related events that, with each new addition, make Jamaica Plain more attractive, more desirable and (for better or for worse) more trendy compared to its abutters. B This isn’t going to change anytime soon.

Next, the Mayor’s office has, at least on paper, committed to developing many of the “blighted” areas of Jamaica Plain: B The stretch along Washington Street between Forest Hills Station and Green Street, Egelston Square, the stretch of land on Hyde Park Ave beyond Forest Hills. B The area around Heath Street Station along South Huntington is already underway and there are several more, smaller but significant developments in the works (and still work to do). B The Mayor has also made some radical changes with the way the city disburses liquor licenses–essentially giving small business owners a fighting chance to create small, thriving centers of commerce in these areas. B B So with the promise of more shops, pubs and tasty restaurants, Jamaica Plain still has plenty of room for growth.

The housing stock in Jamaica Plain is one ofB the most diverse in the city. B There are properties of all shapes and sizes. B Sale prices this year (excluding multi-families) have ranged from $150,000 (76 Elm Unit 318) to $2,375,000 (40 Greenough Street). B Coincidentally, 76 Elm is RIGHT across the street from 40 Greenough. B This diversity in housing stock is also reflected in its community. B I don’t have any real data on this, but I am betting that Jamaica Plain has more community groups, meetings, and forums than any other neighborhood in Boston. B Regardless, the perception of Jamaica Plain being a locally supportive, sustainable and conscientious community is alive and well. B And THAT’s not going to change anytime soon either.

The rising rents in Jamaica Plain haven’t slowed down either. B 4 years ago, no one would have imagined paying $2200 for a two-bedroom/one bathroom unit in Jamaica Plain. B In 2010, according to MLS, the average rent in JP was about $1700.

In 2014 the average rent has increased nearly 50% to over $2400 since 2010.

Maybe. B Just MAYBE when the hundreds of proposed units (many of which will be for lease) are built around JP will rents soften. B But soften usually means ‘not increasing’ for 3 or 4 years.

It doesn’t appear that Greater Boston’s appeal isB diminishing at all. B In fact, manyB are calling for an ‘epic’ year in real estate in Boston for 2015. B B Not to mention, in spite of the rising property values, it’s STILL more sensible to buy than to rent in Boston.

Then there’s the money. B Since 2008, the mortgage lending industry has really clamped down on lending with heavy restrictions for first time buyers. B Of course, this was a response to a system that was so loose, almost ANYONE could buy a home whether or not they could afford it. B Finally in 2015, government backed mortgage powerhouses, Fannie Mae and Freddie Mac have said that they’ll loosen some restrictions, especially for first time home buyers. B Listen to NPR’s Chris Arnold break it all down.

While the JP market is less of a first-time home buyer’s paradise than it used to be, it will at least help to bolster surrounding markets like Roslindale, Hyde Park and Roxbury–effectively insulating the JP market further from any future downturns and validating its blue-chip status even more.

Some would say that we’re hitting a high water mark in Jamaica Plain–that the property value can’t get any higher. B I still don’t believe this is true. B Compared to other nearby fellow blue-chip neighborhoods, JP is still relatively affordable:

2014
	# sales	Average Sale PriceB of Condo, SF & MF
Jamaica Plain	203	$524,331
South End	180	$910,917
Back Bay	138	$1,415,542
Newton	301	$971,034
Brookline	255	$1,054,331
Cambridge	297	$823,418

On the topic of property value, take the annual averages for cost per square foot (an important metric in comparing values for condominium properties):B B B From 2007 through 2012, the average cost per square foot for a condo in Jamaica Plain averaged roughly $315. B Its change from year to year (between 2007 and 2012) averaged LESS than 1%. B Then from 2012 to 2013 the value jumped almost 10% to $347/sqft. B Then AGAIN between last year and this year the average costB jumped again more than 10% to $384.

That’s nearly 25% higher than it had been for 5 years. B B

And while we’ve seen a smattering of properties sell for much higher (several Pondside properties, especially on Burroughs, have been averaging in the mid-$500’s for a square foot for a few years) recently, THIS year a much larger percentage have eclipsed the $500/sqft mark and in locations that weren’t even on the radar for prospective buyers a few years ago (Stonybrook, Parkside, Brookside, and Hyde Square).

Roslindale, for its part, also saw double digit increases (over 25%) B in cost per square foot since 2012 as well.

Even with this mind, my jaw still hit the floor when I saw that a unit at 156 Green Street (in Bartlett Square), sold at $600/sqft. B That’s a record for JP since 2006 (and probably for all time). B $600/sqft. B In 2006, $600/sqft was on the higher end of affordable in the South End (the average was $770/sqft this year in the South End). B B And that’s just the beginning. B With so many new developments coming to JP, many of them considered “luxurious”, by the end of 2015, getting $500/sqft or considerably more won’t be so uncommon.

In the final analysis, the Greater Boston market looks solid for 2015 and Jamaica Plain looks practically bullet-proof. B Believe me, I’d like to find a crack in the armor, a loose stitch in the fabric, if only to give hope to first time home buyers who are being priced out of JP. B But by the numbers it’s hard to say otherwise: B JP still has room to grow and there’s really no telling when we’ll hit the next peak.

Lastly, if you live in the area and you’re thinking about selling BUT also thinking about making a lateral move in the neighborhood: B it’s okay to sell and buy something else. B If the market does, in fact, continue to show gains, you’ll still have some wiggle room for equity after the fact. B B And if you’re looking to buy this year, call me: B while values are red hot, not all property was created or renovated equally–if you’re going to pay top dollar, you’d better be getting top quality too.

Now 2016. B That’s another story.

Thanks for reading.

 

Quick Hits

Today’s Quick Ten: B Thoughts, facts, rumors & opinions from trenches of the local real estate market.

Here’s a top ten list of sorts relating to the local real estate market.

1. Home prices are still climbing!

Comparing average sale prices from May-July 2014 versus the same period in 2013 the condo and single family market has made a precipitous jump. B Here are a few areas:

• Jamaica Plain – 19.58%
• Roslindale – 5.56%
• Somerville – 16.09%
• Brookline – 17.54%
• Cambridge 19.38%

 

2. B How much for just one, square foot that is?

As you might imagine, with the prices B on the rise, the average cost per square foot is UP too. B Here are top five most expensive places to buy a square foot of real estate (on average) in Boston in 2014:

1. Theatre District – $1,236/sqft
2. Midtown – $1,008/sqft
3. Back Bay – $996/sqft
4. Beacon Hill – $924/sqft
5. Waterfront – $843/sqft.

Jamaica Plain condos came in averaging $377/sqft for the year–that’s up from $346 in 2013. 12 inches by 12 inches in Somerville is running $433 and in Cambridge it is $581. B Where is the best deal for a square B foot in Boston? B Answer: B Mattapan or Hyde Park, coming in respectively at $175/sqft and $209/sqft.

 

3. B The average cost for a square foot in JP is $377, but here are some outliers worth noting.

The top five most expensive properties in price per square feet in JP this year.

$544/sqft B – B 11 Cerina Road #11B B (1453 sqft, (3 levels) 3 beds / 2.5 baths B w/ GRG pkg )B

$542/sqft – 88 Dunster Road #1 B (1107 sqft, 2 beds / 2 baths B w/ 1 parking spot )

$539/sqft – 772 Centre Street #1B B (710 sqft, 1 bed / 1 bath B w/ B 1 spot )B

$536/sqft – 300-302 Chestnut Avenue #2B B (1100 sqft, 3 beds / 2 baths B w/ B 2 spots )

$522/sqft – 20 Paul Gore Street #2B B (1034 sqft, 2 beds / 2 baths B w/ B 1 spot )

B

B

4. B Uno, Due, Tre: B Mangiamo!!

The new and improved “Centre Street Cafe” is making great progress. B After completely gutting the space, owner David Doyle and his team have begun the build-out for the restaurant. B I am told that their menu will feature small plate B Italian/Mediterranean fusion. B Can’t wait!

I love how JP is slowly becoming a little foodie paradise.

5. B Rozzie Square in medias makeover

The project to renovate the old substation in Roslindale Village is finally coming to life. B I hear that they’ll have several community-oriented spaces that will include a year-round version of the Roslindale Farmer’s Market and possibly a restaurant too. B If you haven’t been to the farmer’s market in Roslindale you simply must. B While the market’s regular location, Adams Park, is being renovated by the city, the temporary market location is in the commuter rail parking lot on South Street. B It’s every Saturday from late morning to early afternoon.

The plans for the old substation from an aerial view.

6. B Hundreds (and hundreds) of NEW units for rent and for sale coming to Forest Hills area between 2015-2016.

Word on the street is the Forest Hills Commons project is right around the corner. B As far as I can tell all the buildings that currently sit on the site are vacant and probably awaiting demolition. B With the arrival of this, the units at Parcel U, B the development at Burnett and McBride and the Casey Bridge Overpass redevelopment, that half-mile stretch of Washington Street/Hyde Park Ave won’t be recognizable in a few years.

300,000 square feet of commercial and residential space coming soon.

7. JP Porchfest ROCKED!!

The Jamaica Plain Porchfest is my new favorite JP Holiday. B Don’t get me wrong, I love the Wake Up the Earth Festival, but there was something special and very grass roots with the Porch Fest. B First, many people were dancing and drinking alcoholic beverages (among other things) in the streets and no one was reported to hurt, arrested. B People cleaned up after themselves and were entirely well-behaved. B The folks who organized it did a bang up job getting the word out and making sure everyone was on the map too! B It was even good for local business. B Can’t wait for next year.

8. B Bikes not Buses

Why hasn’t HUBWAY come to Roslindale Village yet? B It seems like an obvious place. B Folks could use the bikes to access Forest Hills Station and skip waiting on a bus and get there faster all the while burning 100-200 calories. B Rozzie deserves a HUBWAY of its very own.

This seems so obviously necessary for Rozzie!

9. “I’m just gonna go and find a cash machine.”

One of the four buildings offered in the sale on Beacon Hill.

What are the most expensive properties that sold in our market (on MLS) this year? B In Boston it was The Beacon (4 buildings in lower Beacon the Public Gardens) for $23,600,000–listed for $47M. B B Cambridge? B 72 Hamilton (a 3 fam) sold at $7.95M. B In Brookline it was a nearly 5000 sqft single family at 96 Ivy Street that topped the list at $5.7M B Newton’s top dog was a much larger 8000+ sqft single family house on Claremont Street (#20) that sold for $3.925M. B The comparatively blue-collar city, Somerville had its highest sale register at $1.73M for a 3 family at 12 Harrison Road.

10. B Scapegoat vs. Goatscape

We all know what a scapegoat is. B But have you heard of goatscaping? B Me neither. B Until I saw this. B Spending a great deal of time in Franklin Park, I have come to HATE the invasive plants like Japanese Knotweed. B This sounds like a brilliant idea. B Where will the goats go for the winter?

Thanks for reading. B See you next time!

 

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How much over asking?

Well here’s a fun list! B Everyone is talking about “over-asking” and how far buyers are willing to go. B It’s like asking for a cheeseburger and a small fry and getting a super-sized Big Mac combo in return. B Sort of.

So far in 2014, more than 28% of the properties that have sold, have sold OVER asking and another 16% have sold at asking. B And 5% more are within 1% of asking price. B That’s unheard of. B Compare that to 11% in 2011 selling over asking and only 7% selling at asking. B Yikes.

It’s still early yet in 2014. I wonder if we’ll eclipse last year.

So how much over asking are people paying? B The average is 102.23% but some are selling for much higher. B I’m just remembering that this phenomenon started in JP in 2012.

I looked at Boston, Cambridge, Brookline, Somerville & Newton for sales so far this year and these are the top 25 highest list-to-sell ratios.

ADDRESS	LIST PRICE	SALE PRICE	LIST-to-SALE RATIO
18 Park Lane – Jamaica Plain (single)	$224.9K	$381K	169.4%
92 Bird St – Dorchester (multi)	$199K	$335K	168.3%
204 Temple St – West Roxbury (single)	$258K	$380K	147.3%
6 Newbury Street, unit 502 – Boston (condo)	$5.03M	$7.12M	141.7%
9 Neponset Avenue – Dorchester (single)	$175K	$247.3K	141.3%
998 Tremont Street – Roxbury/South End (multi)	$1.08M	$1.46M	135.3%
35 Trowbridge Street, unit 35A – Cambridge (condo)	$980K	$1.31M	133.7%
9 Gould Avenue – Somerville (multi)	$679K	$855K	125.9%
61 Babcock Street, unit 4 – Brookline (condo)	$799.9K	$1M	125%
23 Sherrin St – Hyde Park (single)	$189.1K	$235K	124.3%
716 E 6th Street – South Boston (multi)	$849K	$1.04M	122.5%
15 Burr Rd – Newton (single)	$999K	$1.21M	121.1%
30 Ardale St – Roslindale (multi)	$469K	$560K	119.4%
16 Revere St – Jamaica Plain (single)	$1.2M	$1.43M	118.9%
24 Cambridge Terrace, unit 3 – Cambridge (condo)	$509K	$605K	118.9%
187 Harvard Street, unit 2 -Cambridge (condo)	$515K	$610K	118.4%
15 Concord Street – Charlestown (single)	$979K	$1.15M	117.8%
25 Adams StB – Coolidge CornerB (single)	$1.15M	$1.35M	117.4%
235 Melrose StB – Auberndale, Newton (single)	$799.9K	$939K	117.4%
12-16 Ellery St, unit 501 – Cambridge (condo)	$469K	$550K	117.3%
400 Savin Hill Ave, unit 8B – Savin HillB (condo)	$155K	$180K	116.1%
46 Elmwood St, unit 1B – Davis SquareB (condo)	$279.9K	$325K	116.1%
16 River StB – Beacon Hill (multi)	$3.9M	$4.5M	115.4%
73 Park St, unit 1B – Coolidge CornerB (condo)	$599K	$691K	115.4%
33-35 Columbia St. – Brookline (multi)	$1.26M	$1.45M	115.2%

 

As always, if you are thinking about buying or selling or you know someone who might be, I’m available for consult anytime. B 857.288.8980.

Affordability is a 4-letter word: When rates & prices climb

Affordability in real estate translates to a four letter word: B Rate.

As prices have begun to climb steadily, rates are sure to follow. B In fact, from January 2013 we’ve seen an increase of about 1% point (or about 30%) in mortgage rates which, at the moment, are in the mid-4% range. B What happens if they jump another point? B In terms of affordability, it’s adding another 12% to the property value.

Let’s look at Jamaica Plain. B Condo values have surged by 18% since the beginning of last year. B That’s no small increase.

Essentially, a condo that may have been valued at $350,000 in the fall of 2012 would be valued at around $413,000 today. B If you bought this condo in November 2012, you might have been paying 3.35% (20% down over 30 years) and your payments (not including taxes and HOA fees) would be somewhere around $1,234 per month. B If you’re buying the same condo now, at $413,000 at 4.5%, your payments are roughly $1,670 per month. B That’s an increase in monthly payments of more than 30%.

If the average household income for folks who can afford these mortgages is $70,000, that increase represents more than 7% of your total annual income. B That’s a big deal.

Now, factor in that the values, due to the scarcity of inventory, are still on the rise and the interest rates could conceivably rise another point to 5.5%, B the affordability index shrinks dramatically.

Using our same imaginary condo, let’s say the values rise another 3% (that’s what a bunch of Realtors think–take it or leave it) B by summer 2014. B That means we’ll be at $425,000 which, at 5.5% (same terms otherwise), means monthly payments of $1,930. B Add in taxes, insurance and HOA fees (approx $400-$500/month) and all of sudden, a household income of $70,000 can’t afford the same unit it could have easily afforded 18 months before.

So let’s talk about the market. B If the inventory continues to trickle (as opposed to flow like a spring market should) but the interest rates DO NOT rise, we would likely see an increase in value of perhaps MORE than 3-5% this year. B Then add 2 points (remember we’re still well below the historical AVERAGE of B interest rates) to the mortgage rates. B Crash, boom, hiss. B There just isn’t enough income in Boston to support this shift. B B

What do I hope will happen?

For one, I hope that more property comes to market. B With more inventory it will obviously quell the demand to the point where we’re not seeing properties bid up 10-15% over their asking prices.

Inventory plateau.

With more inventory, buyers won’t feel like they have to make rash decisions to buy something without really taking a moment to think about it. B Aside: B Over the years, I’ve seen many a buyer get really excited about a property. B But with days to spare before needing to make a decision, often times, this once exuberant would-be buyer processes the full scope of the property, its location, it’s relevance to his/her/their lifestyle and makes the sometimes painful decision not to pursue. B These days, I’ve seen people make some fairly big decisions over hours and minutes compared to days or even weeks.

I hope the interest rates stay within a reasonable range. B Out of my hands, I know, but a guy can hope. B Ideally, I’d like to see the rates stay under 5%. B Why not 3%? B Well because if the rates hit 3% now with such low inventory, it will drive the prices so far up the eventual crash would be hard to sustain.

Here’s the last 20 years of average mortgage rates. Care to bet on whether that number goes up or down?

For years, I was bemoaning the lack of activity and trumpeting the unbelievably pro-consumer conditions that existed in the market. B In 2011, the rates were around 4% and the values were nearly 75% of what they are today (in Greater Boston). B However, when a Realtor yells it’s a great time to buy, many cynical ears will only hear the self-serving clarion call for more business and won’t consider that it may actually be a great time to jump into the market. B Now, when I say it’s a great time to sell, where are the sellers?

So, yes, I’ll say it again:

Now is a great time to sell.

Not six months from now and not six weeks from now. B It’s now.

If you think there’s no basis for this statement, perhaps I got my numbers all wrong.

Call me for a no-strings attached, honest evaluation of your property’s market worth. B 857-288-8980.

New East Cambridge 1 Bedroom in the Glass Factory

Welcome to the Glass Factory in Cambridge’s bustling East side. B Located just across the street from Lechmere Station, and a few blocks away from Cambridge-side Galleria and the Museum of Science, The Glass Factory is convenient to Boston & Cambridge.

169 Monsignor O’Brien Hwy #504

Listed at $319,000

This week we’re introducing a new listing in the Glass Factory: B Unit 504. B An efficiently apportioned 530 sqft 1 bedroom unit with a nice floor plan and plenty of sun. B Custom renovated in 2010, this unit offers hardwood flooring, a granite and stainless steel kitchen and a gorgeous tiled bathroom.

This bright, condo is located on the 5th floor of the Glass Factory’s southwestern (sunny) side, and boasts REAL city views. B With nicely renovated custom hardwood floors, a stainless/granite kitchen and tiled bath (including in-unit W/D), this unit’s new owner can breath deeply and enjoy all the amenities the Glass Factory offers.

The building features a gym, a media/work room, a conference/television room, an additional laundry room, and weekend concierge. Transit friendly living: Steps from Lechmere Station B (green line). I93, routes 99, 1, 28 and 16 are all seconds away.

Enjoy biking or walking? The Glass Factory is conveniently close (just about 1 mile) to the Mass General medical area, Cambridgeside Galleria, Museum of Science and Boston’s historic Charlestown & North End neighborhoods.

For more information click here. B Or download the brochure here. B Open houses this weekend! B Call BJ Ray @ 857.288.8980 for more details and open house times.

Download theB MLSB sheet here.

 

Selling & Buying in One Fell Swoop

The nuances of selling and buying residential property in one transaction: B What to expect, how to prepare and when to get the ball rolling.

It may seem like a daunting prospect: B getting your current home sold while lining up and buying a new home. B There are many balls in the air and, depending on your situation, the interdependence can be unnerving.

Join us in Jamaica Plain or Brookline on Tuesday, February 25th at 6 pm.

At what point during the selling process (e.g. Purchase & Sale, inspection) is it safe to make an offer on a new property?

Does it make sense to incorporate a “must sell contingency” into the offer on the new property?

What is a Use & Occupancy and how could that come into play?

One thing is for sure, the sell/buy transaction takes planning and requires a deftness in negotiating with all parties.

If you’re not prepared, dropping the wrong ball could bring disastrous results. (One of my favorite stories to tell comes from a sell-buy transaction).

Over the past several months, many folks have asked me about potentially selling their home and buying another and what it would take.

The short answer is that it takes having an agent (or agents) who is sharp and well-rehearsed at conducting these transactions. B B The long answer is that everyone’s situation is different; B there is no prescribed system for ensuring a smooth transaction on both the sell and buy sides of your deal. B In all cases, it’s best to leave the juggling to a seasoned pro.

At my office, Prudential Unlimited, we’ll be hosting a seminar on this very topic. B We’ll have at attorney and a lender on hand as well to cover the basics of the sell-buy transaction. B And while it is true that each person’s situation will have its own nuances to consider when strategizing, there are some helpful fundamentals that will go a long way to preserving your sanity and possibly your wallet.

Sign up in advance here or call/email me for more details. B If you cannot make the seminar, that’s okay too. B I’ll be happy to send a copy of the presentation along with any Q&A highlights we’ll cover.

Look before you list: 4 things to consider before you sell

Selling property isn’t necessarily an A-to-B proposition; there is much to consider along the way.

For anyone considering selling their home this coming year, here are some things you HAVE to do BEFORE you list. B Admittedly, I saw this infographic on Boston.com today and thought about what I would say to sellers thinking about listing their homes.

1. Summarize and quantify upgrades, repairs and improvements. B This will be very helpful for your agent, both in deriving the value and pricing strategy AND helping buyers see what may not be readily apparent at the showings.

2. Have a handle on how much you owe and to whom. B Loans are consolidated, bought and sold all the time. B If you’re not keeping track you may need to get up to speed B on the status of your current loan.

3. Find a good agent. B How to define a good agent? B Just because you get a postcard in the mail every other day from an agent telling you how successful they are doesn’t mean they’re successful. B First would be to ask any friends or neighbors who have recently sold. B Ask them if they’d recommend that agent again and why or why not. B Then find some listings in your neighborhood that may be comparable to yours and visit their open houses, check out their marketing and ask the agent to keep you abreast of the listing’s status. B Finally, if you have a few candidates you’re planning to interview BE SURE to ask them to provide answers to the following questions:

a. “What is your ratio of sold versus not sold over the past 12-18 months?” B This is important as many agents are REALLY good at getting listings. B In fact, they spend all their time winning their sellers’ confidence and very little time actually working to sell your home. B Their model is to list many and if 25-50% of these sell, they’re successful. B Trust me, there are more than a few of these agents out there.

b. “What is your “list price to sale price ratio”? B This is an important statistic as well. B How well an agent prices property is indicative of how well they know the market. B Some agents will suggest a favorable asking price that won’t reflect reality and potentially cost you money and time down the road. B No agent is perfect, but certainly some are much better than others. B Days on market is also important, but not as important as different agents have different ways of categorizing their status changes. B It’s a long story, but trust me again, days on market isn’t always as transparent as you’d think. B A while back, I wrote a blog about quantifying agents with these metrics, you can read it here.

This actually happened on MLS. Doesn’t exactly give you a warm and fuzzy feeling, does it?

c. Ask the agent how they would sell your home and your neighborhood. B When I see how some otherwise really great properties in otherwise great neighborhoods are so poorly (and blandly) represented, it breaks my heart.

d. Ask about team coverage. B No one (except for my Realtor friend Stephen) can be everywhere all the time. B How an agent deals with coverage during those times when they may not be available is key. B And if they tell you that their solution is using a lock box, move on! B A lock box can’t give you feed back or sell the buyer on the finer points of the home or the area.

e. Ask them what upgrades/improvements they would recommend versus what may not make sense. B In other words, you may have a list of things you intend to tackle before listing the property but not enough time (in this lifetime) to accomplish this list. B A good agent will help you prioritize and pare down your list to bite-sized and efficient. B After all, your goal is doing the least for the best return; don’t let hubris rule in favor of what’s best for you and your property.

4. Find liens & disputes that may involve your property. B Your agent and/or attorney will be able to help with this, but it’s important. B Essentially, if the title to your property isn’t “clean”, you’ll want to know as early in the process as possible to save you time and money down the road.

Essentially, even though the market is hot, there are still properties sitting on the market and failing to garner offers in every part of town. B This is mostly due to overpricing and ineffective marketing which falls squarely on the agent. B So choose wisely and take your time. B Your quality of life depends on it!

If you are thinking about selling and looking for a top-notch listing agent in Greater Boston, interview me! B Or check out my pages on selling real estate or client testimonials.

How will the new Dodd-Frank regulations affect you?

As of January 10th, 2014, the Consumer Financial Protection Board (CFPB) will be enforcing some new guidelines put forth by the Dodd-Frank Act.

Know before you spend.

Most lenders are already well-informed and prepared to abide by these new regulations established to protect the consumer. B If you’re a consumer who may be affected by these rules, you’ll probably want to know before you get too deep in the purchase process.

Of course, as a Realtor, I am better qualified to talk about market shifts, value, comparing neighborhoods and locations than I would be to discuss the, at times, mercurial mortgage industry. B For that I have asked local mortgage expert and loan officer, Andrew Marquis of Prospect Mortgage what he has to say on the topic.

(If you have any specific questions, I encourage you to email Andrew directly.)

Here’s what Andrew has to say:

As of January 10, 2014, if mortgage lenders want to benefit from protections from consumer lawsuits, they will have to abide by specific lending guidelines set by the Dodd-Frank Act and enforced by the Consumer Financial Protection Board (CFPB).

The first portion of this legislation is named by ATR or Ability-to-Repay.B The ATR rule requires lenders to make a good faith determination that the consumer has a reasonable ability to repay the loan, considering such factors as the consumerbs income or assets and employed status if relied on, or against.B Looking at factors such as:

• Mortgage loan payment
• Ongoing expenses related to the mortgage loan or the property that secures it, such as property taxes and insurance required by the lender
• Payments on simultaneous loan secured by the same property
• Other debt obligations, alimony and child support payments

If the lender fails to obey the requirements of the ATR rule they can be subject to buyer recourse if the buyer cannot afford his/her obligations shortly after the commencement of the loan term assuming no major changes in his/her financial position.

The good news is that certain loans carry a presumption of compliance with the ATR rule and this is the key to understanding the legislation.B The loans that carry this presumption are called Qualified Mortgages or herein referred to as QMbs.

In order to fall into the category of a QM the loan must contain several features:

• No negative amortization or balloon periods
• No term over 30 years
• 3% cap on point and fees
• Debt to income ratio capped at 43%
• Verification of all income/asset/debt

So looking at this list you quickly see that most lenders donbt write negative amortization, balloon period or mortgage terms over 30 years.B You will also notice that we already verify income/assets/debt as stated income loans rarely exist in this day & age.

However, there are a few stated income lenders still in existence that will likely re-consider their use of this product in 2014 or otherwise be open to potential liability from the consumer later should he be unable to keep up his mortgage payments in a timely fashion.

The next piece to consider is the fee cap of 3%.B This includes all finance costs in the transaction unpaid to a 3^rd party for reasonable cost services.B It would also include any points paid by the borrower that are not considered viable discount points to buy down his/her interest rate.

Working directly for a lender I donbt see a major impact here as the fees rarely come close to exceeding this figure and compensation from the mortgage bank to the employee loan officer is not included in the 3% cap.

Where I might be leery of this ruling is on the broker side of the business:

Typically brokers receives fee compensation from the lender whom which they place the loan in the amount of 1-3% depending on the relationship.B Using an average broker compensation on a deal to be 1.75%, you can see that they are already approaching the 3% cap without considering any attorney fee, title expenses , or points the borrower would like to pay due to a lower credit score.B This is something lenders/brokers will have to pay special attention to.

The next point to mention here is the 43%B cap on debt-to-income ratio.B There is a common misconception in the marketplace at this time that this is the new debt to income ceiling for all loans originated in 2014.B This is simply not the case.

Certain loans in the marketplace fall under the category of Temporary Qualified Mortgage.B These are loans purchased by the GSEbs (Fannie Mae/Freddie Mac), guaranteed by FHA, VA, & USDA.B It would also include state bond loans purchased by MA Housing.B Because these loans fall under the temporary QM ruling they must abide by all previously set forth guidelines with the exception of 43% debt-to-income ceiling.

Typically conventional loans allow up to approximately 45% and in some cases higher while FHA is 50% and sometimes higher.B As longs as these loans are approved through the Automated Underwriting System for the applicable Government Entity and sold for purchase to this entity they are exempt from the 43% cap.B The Temporary QM ruling is in place for 7 years, 1/10/2021, or until any of the GSEbs fall out of conservatorship.

The 43% however will apply to jumbo loans so you may see a tightening here on the debt to income ratio on these loans and will see a tightening on the interest only feature of these loans which could be considered riskier and therefore outside the scope of the Qualified Mortgage Definition.

In summary, I donbt think anyone will see major changes on 90% of the mortgage loans funded.B The other 10% (jumbo, portfolio, or any other loans not resold/guaranteed to/by the GSEbs) will show a slightly more conservative approach on interest-only, debt-to-income, etc.

Big thanks to Mr. Marquis for his contribution to this article and for his continued expertise & wise counsel in all things mortgage-related.

As always, please consider me your best and most informed real estate resource in and around Greater Boston!

 

What's Sold in Your Neighborhood? December 2013

Monthly Residential Sales Statistics Report for Greater Boston including Somerville, Cambridge, Newton and Brookline.

The final sales from 2013 are in and this is what we’ve got. B For what it’s worth, I’ll no longer be posting all the specific property sales on this blog. B Rather, I’ll be linking a PDF report on my website to a special market reports page. B December 2013’s sales PDF is here.

In this post, you’ll find the summary of December’s sales, broken down by area & town. B Again, these are statistics reported from MLS, so the accuracy depends on how each agent or brokerage entered the data. B I’d say it’s 98.5% reliable–but that’s just an off-the-cuff number.

Clearly, with some of the locations there just isn’t enough data to consider any improvement or devaluation accurate. B Nonetheless, we’re working with what MLS gave us.

It’s also worth noting that many of the properties that sold in, for example, the Leather District, weren’t labelled as such when the broker entered the property into MLS. B My parsing system can catch this sometimes, but not reliably. B It’s often the case that agents don’t utilize the “area/neighborhood” field when they’re listing properties. B Sometimes brokers will put “Boston” and not distinguish that the property is in Jamaica Plain, Roslindale or Roxbury.

Also, the South End IS in Roxbury, but a broker listing property in the South End, especially a condominium, would be beyond remiss if he/she didn’t check off the “South End”. B I’ve seen this happen in JP sometimes. B Brokers, for whatever their reasons, neglect to include Jamaica Plain. B If you do a search for “02130” versus “Jamaica Plain” you may get slightly different results. B Also, as it happens, there is a small part of 02119 that is considered Jamaica Plain. B Confused yet? B If you’re not confused, I may want to hire you to solve some of the data parsing issues these anomalies have created.

Here are two graphics. B The first is a chart detailing the average prices from areas around Greater Boston (including Somerville, Newton, Brookline & Cambridge) and compares this past December sales averages to the previous year. B The second is a total year over year look at the cost of a square foot of living space in a condominium. B You’ll not be surprised by the results of either.

The takeaway from the graph below is that just about everywhere in Greater Boston property value has increased. B We know this by now. B But it’s also important to note that in the vast majority of cases, less is selling.

There are a few exceptions, but mostly we can conclude that less is selling for more.

	2012		2013
	Avg Sale Price	# Sales	Avg Sale Price	# Sales	% Price Difference (Year/Year)
Jamaica Plain
Condo	$358,466	29	$437,138	24	21.95%
Multi-Family	$729,833	6	$632,500	1	-13.34%
Single Family	$693,929	7	$848,714	7	22.31%
Roslindale
Condo	$247,031	13	$300,938	8	21.82%
Multi-Family	$517,000	6	$536,000	4	3.68%
Single Family	$328,200	2	$431,518	11	31.48%
West Roxbury
Condo	$238,391	11	$324,343	7	36.06%
Multi-Family	$487,420	6	$507,667	3	4.15%
Single Family	$415,043	21	$420,183	18	1.24%
Allston
Condo	$234,767	9	$322,543	7	37.39%
Multi-Family	$549,667	3	$800,000	1	45.54%
Back Bay
Condo	$1,479,210	47	$1,602,553	30	8.34%
Multi-Family	$3,250,000	1
Single Family			$4,900,000	1
Bay Village
Condo	$287,000	1	$636,000	1	121.60%
Single Family			$1,175,000	1
Beacon Hill
Condo	$806,320	25	$952,100	10	18.08%
Multi-Family	$2,225,000	1
Single Family	$1,960,000	1	$2,126,667	3	8.50%
Brighton
Condo	$310,321	14	$358,200	32	15.43%
Multi-Family	$664,000	4	$849,167	6	27.89%
Single Family	$560,000	3	$456,339	7	-18.51%
Charlestown
Condo	$530,500	20	$592,228	29	11.64%
Multi-Family	$915,000	2
Single Family	$859,043	6	$662,667	6	-22.86%
Dorchester
Condo	$231,442	30	$293,443	30	26.79%
Multi-Family	$355,170	23	$409,600	24	15.33%
Single Family	$313,125	12	$320,725	12	2.43%
East Boston
Condo	$174,350	10	$278,111	9	59.51%
Multi-Family	$329,000	5	$407,714	7	23.93%
Single Family			$495,000	1
Hyde Park
Condo	$127,400	5	$217,700	5	70.88%
Multi-Family	$323,400	5	$378,000	4	16.88%
Single Family	$274,133	15	$323,775	16	18.11%
Leather District
Condo	$529,700	5	$621,500	2	17.33%
Mattapan
Condo			$195,000	2
Multi-Family	$293,333	3	$388,900	5	32.58%
Single Family	$200,250	4	$219,667	3	9.70%
Mission Hill
Condo	$263,500	3
Multi-Family	$1,575,000	1			#NULL!
North End
Condo	$403,750	6	$325,625	2	-19.35%
Multi-Family	$1,600,000	2
Roxbury
Condo	$247,000	2	$270,500	2	9.51%
Multi-Family	$393,500	4
Single Family	$265,000	1	$328,100	2	23.81%
Seaport District
Condo	$572,415	6	$1,209,750	2	111.34%
South Boston
Condo	$435,239	34	$487,134	54	11.92%
Multi-Family	$618,500	5	$810,000	4	30.96%
Single Family	$481,125	4	$770,667	3	60.18%
South End
Condo	$728,819	44	$771,895	41	5.91%
Multi-Family	$1,713,333	3	$910,000	1	-46.89%
Single Family	$2,675,625	4	$2,763,025	5	3.27%
Waterfront
Condo	$862,700	12	$1,150,364	11	33.34%
Somerville
Condo	$401,272	31	$463,839	41	15.59%
Multi-Family	$594,863	19	$758,778	9	27.56%
Single Family	$661,250	8	$569,300	8	-13.91%
Cambridge
Condo	$584,704	70	$684,564	39	17.08%
Multi-Family	$4,569,333	9	$1,018,750	4	-77.70%
Single Family	$1,172,167	15	$1,209,896	12	3.22%
Brookline
Condo	$651,873	31	$729,285	30	11.88%
Multi-Family			$1,393,667	3
Single Family	$1,753,889	9	$1,440,324	11	-17.88%
Newton
Condo	$523,469	27	$541,239	26	3.39%
Multi-Family	$620,833	3	$686,333	3	10.55%
Single Family	$979,288	37	$1,144,572	53	16.88%

 

Also, for the condo market followers, I’ve graphed the year over year change in cost per square foot. B In this case there were no exceptions. B In 2013 you got less for your dollar than you did in 2012.

A square foot will cost more anywhere you go in Greater Boston. How will 2014 compare?

I thank you for tuning in and for taking a moment to read through. B As always, I ask you to please make me your number one and most reliable source for any and all residential real estate matters in Greater Boston–that includes just about everywhere from Milton to Malden. B I work with buyers & sellers as my specialty is getting you the best deal, buying or selling.

 

–>

Don't Call it a Comeback: The Greater Boston Real Estate Market 2013 Review

In a nutshell: B The 2013 Real Estate Market in Greater Boston was simply volcanic.

So the local housing market in 2013 was both predictable and unexpected. B Predictable in that all indications seemed to suggest an uptick after 2012 turned out to be so healthy. B Unexpected in that no one could have foreseen such a mad dash for property where bidding wars were the norm and properties selling over asking price became ordinary.

A photographic depiction of the 2013 real estate market. Guess who was holding the cards?

Bottom line: 2013 was a seller’s market and as robust as they come.

Let’s look a little more closely at the numbers and take a stab at how 2014 will shape up. B For this study, I am using MLS sales data from Boston, Cambridge, Newton, Brookline, and Somerville (five of the markets I follow most closely).

For starters, in a year over year comparison, Boston, Cambridge, Brookline, Somerville, and Newton, property value saw a 13% increase on average.

To put that 13% in perspective, the average annual year-over-year growth from the previous 4 years was just over 2%.

The Great Thaw of 2012

By all accounts 2012 was a great year, averaging 2-4% increases in value from the previous year, sale to list ratios averaging 1-1.5% over the average (@98.2%), and total sales volume increased by more than 10% from 2011.

It became clear by early 2012 that the market had turned and things were on the up. B Rents were still rising and the mortgage rates were dropping. B Well priced property sold fast and the absorption rates (i.e. new properties compared to properties being sold or pended over a period of time) were back to healthy levels of 30-40%.

This time last year, with 2012 almost in the can, I remember thinking we could expect much of the same in 2013, except there should be a surge in inventory. B So it only made sense that sellers would collectively decide, after 2012, that it was safe to come to market. B I expected the floodgates to open and all the new inventory to ballast the market.

A Vesuvian 2013

Then came 2013. B The bell rang, the flood gates opened, but nothing came out. B Yet the buyers’ demand only intensified; they stood ready to buy, starved for new housing stock. B The result: B 2013 was a blowout, B a binge, an eruption of market confidence. B B If 2012 was blazing hot, 2013 was nuclear. B Look at the meteoric rise in absorption rates in Jamaica Plain:

Even when the market was booming (and incidentally nearing its collapse), it barely touched 50%.

And that wasn’t exclusive to Jamaica Plain. B Here’s a look at Somerville:

It’s the same story in Somerville. B Basically, things were coming off the shelves faster than they could be replaced.

Everything was selling above the asking price–at least that was how it seemed to buyers. B Things were moving fast and buyers had little time to make big decisions. B A property that came to market on a Tuesday was frequently under agreement by the end of the weekend and sometimes before.B

The AVERAGE list price to sell price ratio in 2013 was over 101%. B That’s almost 4% over the norm. B I witnessed several occasions where offers exceeded 110% of the asking price.

How many properties did sell for over asking? B Well it’s typical to expect 10-11% of all listings to sell at more than asking, 5-8% to sell at asking price and the remainder (80-85%) to sell for less than asking.

Here’s a look at the percentage of home sales that sold over, under, and at the asking price for the past three years:

Historically, the percentage of property selling above asking price is around 10%. We neared 50% in 2013.

 

List Price Be Damned!

For multi-family markets in Jamaica Plain and Cambridge, for example, the AVERAGE list to sell ratio was over 107%. B B Some multi-family properties sold for more than 150% of list price! B For example, I remember seeing 133 Erie Street in Cambridgeport this past spring. B It was a 3 family listed at $499K. B Rumor had it that it saw more than 70 offers. B I’ll repeat that. B More than 70 offers. B It sold at $760K, which was just over 153% of the list price. B In Jamaica Plain, 16-18 Ophir Street (a multi-family on a develop-able lot) sold for more 163% of asking price. B 57 Wachusett was listed at $999K and sold for a whopping $1.6M. B As the kids say: B cray cray.

45% of all the multi-families sold ABOVE asking price. B 47% sold below asking price and about 8% sold at asking price.

Here’s a list of the top 15 multi-family sales by list to sell ratio:

Most of these sales were cash deals.

 

Comparatively, the Brookline single family market performed “marginally” at 99.01% list to sell!!

So what happened in 2013?

Here are the top reasons why it erupted:

1. Interest rates were bottoming out at HISTORIC lows. B B
2. The economy in Massachusetts and specifically Eastern Mass was booming compared to the rest of the country. B There were once again jobs to be had.
3. The average rents have risen more than 30% since 2007.
4. The population rose. B (Here’s an interesting interactive map too)
5. B 2012 established the highest level of consumer confidence seen in years.B
6. Foreclosures were DOWN considerably. B Petitions to foreclose were down in many areas by as much as 70% compared to last year.
7. The available inventory diminished to almost nothing. B Essentially the supply was overwhelmed by the demand.

So what does this mean for 2014? B Can we sustain this growth?

Personally, I don’t think we can and I don’t think we should. B Here’s why:

Looking at the trends, the average 2+ bed, 1.5 bath 1350 sqft condo in Jamaica Plain would be valued at around $450K. B That means with a mortgage interest rate of 4.75% at 10% down, the monthly payments will exceed $2,100 and that won’t include the roughly $500-$750/month due additionally in taxes and HOA fees (for a condo). B If the interest rate touches 5%, it will overwhelmingly make sense to rent and save your cash.

So, this growth isn’t sustainable. B But we still need property to sell. B Without inventory, the rental market will continue to heat up until the disparity of rent paid eclipses the monthly costs for ownership.

Comparing 2013 to 2012

Here are some charts detailing the market changes from last year B through 2013. B B You’ll notice the volume (# of property sold) didn’t change much while the prices in almost every category went up.

There are a few exceptions B (e.g. multi-families in Allston or Mission Hill) where sales anomalies were contributing factors–suffice to say that real estate in either of those locations did not in fact lose value.

In some cases, and especially with multi-families, there just aren’t enough sales through the year to achieve an accurate sense of the value. B B Mutli-family analysis requires a whole additional look at total units, rooms per unit, income, expenes, etc. B We’ll tackle that one another day, perhaps?

B	2012		2013		B
B	# Sales	Avg. Sale Price	# Sales	Avg. Sale Price	Year over Year %
Jamaica Plain	450	$421,722	536	$483,573	14.67%
Condo	346	$367,897	417	$407,096	10.65%
Multi-Family	45	$619,392	50	$827,852	33.66%
Single Family	59	$586,609	69	$696,288	18.70%
Roslindale	232	$314,763	288	$360,999	14.69%
Condo	76	$246,699	142	$292,354	18.51%
Multi-Family	39	$387,769	31	$513,545	32.44%
Single Family	117	$334,641	115	$404,639	20.92%
West Roxbury	329	$374,483	342	$397,445	6.13%
Condo	106	$276,026	91	$261,372	-5.31%
Multi-Family	15	$427,173	19	$504,388	18.08%
Single Family	208	$420,858	232	$442,060	5.04%
Allston	92	$569,233	117	$393,861	-30.81%
Condo	65	$264,897	90	$310,163	17.09%
Multi-Family	19	$1,651,553	19	$735,053	-55.49%
Single Family	8	$471,450	8	$525,130	11.39%
Dorchester	597	$285,054	684	$353,691	24.08%
Condo	250	$225,998	311	$292,908	29.61%
Multi-Family	239	$343,620	266	$428,848	24.80%
Single Family	108	$292,153	107	$343,519	17.58%
East Boston	165	$254,578	196	$327,160	28.51%
Condo	79	$212,228	81	$287,932	35.67%
Multi-Family	62	$308,459	81	$378,843	22.82%
Single Family	24	$254,788	34	$297,490	16.76%
Charlestown	369	$518,168	417	$605,011	16.76%
Condo	298	$466,230	344	$562,807	20.71%
Multi-Family	4	$1,077,000	11	$937,650	-12.94%
Single Family	67	$715,813	62	$780,156	8.99%
South End	529	$762,106	594	$902,035	18.36%
Condo	493	$694,819	544	$801,473	15.35%
Multi-Family	13	$1,426,538	16	$1,923,294	34.82%
Single Family	23	$1,828,826	34	$2,030,435	11.02%
Hyde Park	174	$267,611	182	$293,784	9.78%
Condo	24	$160,290	36	$192,346	20.00%
Multi-Family	37	$310,026	41	$332,595	7.28%
Single Family	113	$276,518	105	$313,407	13.34%
Kenmore	4	$291,500	4	$362,134	24.23%
Condo	4	$291,500	4	$362,134	24.23%
Back Bay	494	$1,242,817	462	$1,360,098	9.44%
Condo	478	$1,150,710	447	$1,200,874	4.36%
Multi-Family	4	$3,037,500	8	$5,394,938	77.61%
Single Family	12	$4,313,500	7	$6,916,429	60.34%
Brighton	323	$345,995	393	$371,763	7.45%
Condo	249	$265,897	326	$311,990	17.33%
Multi-Family	45	$722,213	36	$782,920	8.41%
Single Family	29	$449,945	31	$522,877	16.21%
North End	78	$574,878	95	$603,357	4.95%
Condo	70	$436,186	90	$470,932	7.97%
Multi-Family	7	$1,896,071	5	$2,987,000	57.54%
Single Family	1	$1,035,000	B	B	#NULL!
Leather District	34	$581,159	28	$819,951	41.09%
Condo	34	$581,159	28	$819,951	41.09%
Mattapan	85	$227,192	72	$299,203	31.70%
Condo	16	$109,444	11	$95,955	-12.33%
Multi-Family	38	$302,436	36	$389,933	28.93%
Single Family	31	$195,731	25	$257,980	31.80%
Roxbury	67	$299,583	86	$307,745	2.72%
Condo	26	$174,396	28	$249,227	42.91%
Multi-Family	27	$464,870	38	$366,952	-21.06%
Single Family	14	$213,302	20	$277,178	29.95%
South Boston	626	$427,678	706	$484,087	13.19%
Condo	559	$415,338	607	$462,712	11.41%
Multi-Family	19	$643,303	39	$700,513	8.89%
Single Family	48	$486,025	60	$559,652	15.15%
Chestnut Hill	22	$530,522	29	$716,860	35.12%
Condo	20	$533,374	26	$746,325	39.93%
Single Family	2	$502,000	3	$461,500	-8.07%
Mission Hill	28	$719,771	20	$997,700	38.61%
Condo	8	$354,763	13	$399,923	12.73%
Multi-Family	17	$943,529	6	$2,362,167	150.35%
Single Family	3	$425,167	1	$582,000	36.89%
Beacon Hill	184	$1,047,421	158	$1,292,880	23.43%
Condo	161	$800,105	131	$874,070	9.24%
Multi-Family	B	B	2	$5,775,000	B
Single Family	23	$2,778,630	25	$3,128,872	12.60%

B	B	B	B	B	B
B	2012		2013		B
B	# Sales	Avg. Sale Price	# Sales	Avg. Sale Price	Year over Year %
Newton	894	$813,185	972	$877,058	7.85%
Condo	274	$504,963	340	$560,496	11.00%
Multi-Family	58	$653,356	65	$734,518	12.42%
Single Family	562	$979,952	567	$1,083,223	10.54%
Brookline	683	$771,297	697	$882,019	14.36%
Condo	510	$571,141	505	$633,124	10.85%
Multi-Family	23	$1,177,670	24	$1,434,211	21.78%
Single Family	150	$1,389,518	168	$1,551,301	11.64%
Cambridge	911	$622,253	981	$726,139	16.70%
Condo	724	$501,297	784	$586,832	17.06%
Multi-Family	75	$936,167	66	$1,288,226	37.61%
Single Family	112	$1,193,940	131	$1,276,668	6.93%
Somerville	624	$446,465	644	$518,918	16.23%
Condo	409	$397,585	425	$447,709	12.61%
Multi-Family	135	$566,961	138	$706,750	24.66%
Single Family	80	$493,028	81	$572,542	16.13%

Just for comparison’s sake, I picked a few areas from 2011 & 2012. B 2011 was a sleepy market overall:

B	2011		2012		%
B	# Sales	Avg. SP	# Sales	Avg SP	Y/Y %
Jamaica Plain	340	$402,229	450	$421,722	4.85%
Condo	275	$355,442	346	$367,897	3.50%
Multi-Family	23	$603,604	45	$619,392	2.62%
Single Family	42	$598,298	59	$586,609	-1.95%
Roslindale	199	$304,922	232	$314,763	3.23%
Condo	85	$256,021	76	$246,699	-3.64%
Multi-Family	37	$359,096	39	$387,769	7.98%
Single Family	77	$332,872	117	$334,641	0.53%
South End	503	$775,659	529	$762,106	-1.75%
Condo	455	$665,886	493	$694,819	4.35%
Multi-Family	13	$1,503,462	13	$1,426,538	-5.12%
Single Family	35	$1,932,390	23	$1,828,826	-5.36%
South Boston	517	$395,538	626	$427,678	8.13%
Condo	435	$381,286	559	$415,338	8.93%
Multi-Family	32	$586,828	19	$643,303	9.62%
Single Family	50	$397,104	48	$486,025	22.39%
Newton	753	$762,230	894	$813,185	6.69%
Condo	223	$478,798	274	$504,963	5.46%
Multi-Family	51	$592,225	58	$653,356	10.32%
Single Family	479	$912,283	562	$979,952	7.42%
Brookline	610	$791,157	683	$771,297	-2.51%
Condo	437	$564,132	510	$571,141	1.24%
Multi-Family	23	$1,040,891	23	$1,177,670	13.14%
Single Family	150	$1,414,264	150	$1,389,518	-1.75%
Cambridge	806	$597,025	911	$622,253	4.23%
Condo	650	$498,087	724	$501,297	0.64%
Multi-Family	53	$886,508	75	$936,167	5.60%
Single Family	103	$1,072,434	112	$1,193,940	11.33%
Somerville	531	$439,704	624	$446,465	1.54%
Condo	332	$394,753	409	$397,585	0.72%
Multi-Family	142	$530,197	135	$566,961	6.93%
Single Family	57	$476,085	80	$493,028	3.56%

Where did all the pretty houses go?

So by almost all accounts, the Greater Boston real estate market had a helluva year in 2013. B And I think we can all agree that the year over year growth we saw from 2012 to 2013 simply cannot repeat itself in 2014. B The only way that could happen is if the available inventory continues to plummet as it has been doing for the past few years. B But this isn’t Zeno’s paradox and there are a limited number of houses–and land to build on.

Here’s a look at the story of B ‘available market inventory’ in Boston since 2004.

Soon there will be nothing left!!

It’s a disappearing act. B As far making any predictions, we can’t just look at the rising average prices. B We have to also consider inventory. B If the inventory remains at the levels we saw in 2013 or, worse, if it dips lower, we may just see the prices climb higher.

Or we may see secondary markets explode. B Markets like Roslindale, Hyde Park, Roxbury and parts of Dorchester are still behind the curve value-wise and have room to grow.

My top pick for a real estate market to explode in 2014 would be Roslindale.

By comparison in 2013 Roslindale under-performed yet it’s local economy seems to be improving with some new restaurants, shops and a re-focus on the Village area that includes the development of the old Trolley substation at 4228 Washington Street (across from Adams Park). B I have also loved Roslindale and the fact that its real estate market hasn’t reached premium status yet makes it even more attractive.

Reaching for the Stars

When property does come to market in 2014, the sellers may be reaching for the stars. B Can you blame them? B Without any competition and no relenting in the demand, it’s a name-your-price type of market.

So yeah, inventory will be the question & answer for 2014. B The market needs it for ballasting.

IF we see the housing inventory rise above last year’s volume by more than 25%, we’ll likely see prices stabilize. B We’ll see sellers (and their agents) over-pricing properties, those properties will sit on the market, and buyers will have some leverage to negotiate. B But. B We. B Need. B More. B Property.

Here are a number of charts showing the inventory and market volume trends over the past several years:

This chart is Jamaica Plain real estate (singles, condos, & multi’s) over 8 years. The wavelength & frequency for pended & sold properties stay relatively consistent. The amount for sale, however, is unmistakably dropping to record lows.

 

 

Here’s Somerville, MA over the same time period. Again, the amount for sale (i.e. available inventory) appears to be evaporating entiSo what happens if the housing market doesn’t loosen up? B Your guess is as good as mine.

Now if you have a property to list, it doesn’t mean that you can just make up a price and hope for the best. B Strategy, with regard to pricing, timing, and marketing is still hugely important. B Getting top dollar–in any market–still requires skill and professional insight.

B

B

I work in Greater Boston as a buyer agent and listing agent. B I am one of the top listing agents in my area; my listings sell for more and sell faster than most agents in the Boston market. B As a buyer agent, I help buyers find and negotiate purchases from Milton to Malden.