November 17, 2005
Holiday homebuyers: 1 in 5 homes sells for at least 10% off, expect more this year!
How much excess housing inventory is on the market in Massachusetts compared to past years, and what will that mean to holiday homebuyers? According a Boston Globe article entitled, Season can leave buyers in good cheer (November 30, 2003)
"...November and December are typically the two months with the fewest number of houses for sale. Between 1997 and 2002, the average number of homes on the market in Massachusetts in any given month was 33,636. The November average was 29,733, and the December average was 28,378."
Two years later, a simple tally of MLS listings in Massachusetts shows 44,646 single family, condominium, and multi-family properties currently on the market. Add land parcels, and that number rises to 47,476 listings. If you use the first figure, the inventory is up by 50% over November 2003. If you use the second, inventory is up over 60%.
What's that mean for the average homebuyer? As The Real Estate Cafe told the Boston Globe in November 2003, end of season markdowns make the holidays an ideal time for homebuyers to bargain hunt:
According to [our] analysis of listing data between 1996 and 2002, one in five Massachusetts properties that went under agreement between Thanksgiving and New Year's Day sold for at least 10 percent below the original asking price.
Larger savings are possible this year because of the oversupply of inventory and the soaring number of expired listings as shown in the graph above (click on image for larger view). If you'd like to learn how you can time the market to maximize your savings and stretch your savings enough further with our unrivaled commission rebates, give us a call at 617-661-4046 or email us RECafe@mac.com.
November 14, 2005
Mass. Exodus: A generation & housing market in transition
MassInc, a public interest research group, released their newest report this morning, "A Generation in Transition: A Survey of Bay State Baby Boomers." The survey asked 1,000 baby boomers in Massachusetts about "their current circumstances and future plans for work, retirement, [and] housing..."
One key finding parallels a phenomena The Real Estate Cafe has witnessed working with home buyers in suburban Boston, where it sometimes appears that neighborhoods are "turning over:"
"The survey also foreshadows a new boomer exodus from Massachusetts – exacerbating the state’s population loss challenge. More than one-third of baby boomers (35 percent), roughly 650,000 people or 10 percent of the state’s population, want to retire outside of Massachusetts."
"There are 1.83 million boomers in Massachusetts, accounting for nearly 30 percent of the state’s population and roughly 45 percent of its workforce. The first baby boomers turn 60 in January 2006."
About a decade ago, 2006 was the date some economists predicted would be a tipping point in the housing market. More recently industry observers have said that housing demand from baby boomers is increasing, and that traditional assumptions about downsizing and relocating are obsolete. MassInc's report demands closer reading to make more sense of those conflicting scenarios.
While I've yet to read the full report, my working hypothesis is that the "Mass. exodus" -- pun intended -- is bad news for sellers who are already confronting falling prices, a record number of expired listings, and the first buyers' market in a decade. 650,000 people represents about ten years worth of housing inventory. Granted, not all baby boomers live alone, so cut that number by half or one third. That still leaves five to seven years supply of housing, presumably single family homes. How fast will they come on to the market? What impact will those units have on sales prices, especially if energy prices and interest rates continue to rise?
My guess is that those kind of questions are addressed in the report, and will be discussed in a roundtable discussion on Friday, December 2, 2005, 8:00 to 10:00am at the Westin Copley Place Boston. Until then, your comments are welcome here online, or on The Real Estate Cafe's readers' line, 617-876-2117.
November 02, 2005
Spring forward, fall back: Resetting the Foreclosure Clock
There was a time when CENTURY 21, the world's largest real estate organization with 110,000 brokers and agents in more than 25 countries, used the slogan, "We sell a home every minute of every day." On the day after Halloween, transactions per minute have come back into the real estate vocabulary with a frightening, downward spin that could make recent and potential homebuyers run for cover, at least in the UK. There, an article entitled, Increase in repossessions show housing bubble is close to bursting, published this stunning statement and the statistics on the link below: "in England and Wales a repossession order is made every seven minutes and an action is entered into every four minutes."
Think It could never happen here? Don't be so sure... check out the nearly 1.5 million foreclosures, foreclosures, bankruptcies, and tax liens already recorded nationwide on Foreclosure.com and speculation earlier this summer about the prospect of "repossession riots" in the future. (The Real Estate Cafe's predecessor, the Massachusetts Homebuyers Club helped the federal government sell foreclosed properties in 50 major cities across 25 states in the last real estate recession from 1991 to 1995.)
Regionally an action is entered into every:
- London: 24 minutes
- South East: 30 minutes
- West Midlands: 43 minutes
- North West: 42 minutes
- Eastern Region: 45 minutes
- Yorks and Humber: 47 minutes
- East Midlands: 58 minutes
- South West: 64 minutes
- Wales: 81 minutes
- North East: 87 minutes
- Merseyside: 153 minutes
Regionally a repossession order is made every:
- London: 37 minutes
- South East: 45 minutes
- West Midlands: 61 minutes
- North West: 66 minutes
- Eastern Region: 68 minutes
- Yorks and Humber: 80 minutes
- East Midlands: 88 minutes
- South West: 90 minutes
- Wales: 122 minutes
- North East: 140 minutes
- Merseyside: 207 minutes
Commenting on the figures Vince Cable MP, Liberal Democrat Shadow Chancellor said:
"These figures are deeply worrying. While they are at low levels compared to the early 1990's there are clearly big problems ahead."
"Banks and building societies need to ensure that when individuals take out mortgages they are fully aware of the risks that are involved and of the relevant insurance products."
"At long last the Chancellor has now accepted there is a bubble in the housing market. Now he needs to recognise that for many homeowners it is sadly bursting and that he needs to take action."