December 31, 2006

Waiting game? Prices in 2007 vs 2010

21thru2010all_data1Turn off pop-up blocker, and click on table for larger image.

The Boston Globe is asking readers whether prices will keep falling, remain steady, or begin to rise again in 2007.  We asked our blog readers a similar question last year, but as the responses above show, wanted them to graph price changes through the end of the decade.  We'd be glad to repeat that survey, but for now, just want to know whether you will make your own 2007 real estate resolutions based on where prices will be over the next 12 months or five years?  Does it make a difference?  Let us know what you think about what one industry spokesperson says about playing the "Waiting game."

09:04 AM in Consumer surveys, Falling prices, Housing forecasts, Protecting yourself | Permalink | Comments (0)

August 23, 2006

Industry's seller bias understates risk to homebuyers

Herald_082306_1Kudos to the Boston Herald for asking "Has the Mass. housing bubble burst?" on their front page this morning.

If homebuyers focus on median sales prices, they might reach the same conclusion the Massachusetts Massachusetts Association of Realtors (MAR) did three months ago when they told the public that a "New study finds no evidence of a “housing bubble” in metro Boston."

Afterall, according to MAR's report on existing home sales during July 2006, median single-family home prices decreased just 3.5 percent from the previous year, despite declining sales during 17 of the past 18 months.  To their credit, MAR also disclosed:  (1) that is the largest annual price decline since March 1993; (2) median sales prices have declined for six consecutive months, and (3) that is the longest slump since housing prices fell 13 straight months from March 1992 to March 1993.

What raises questions is that The Warren Group reported that median sales prices for single-family homes fell by 6.1% or 74% more than MAR's figure.  Maybe that's because MAR based their assessment on a median single-family price of $361,750; in contrast, The Warren Group's median (which includes sales outside the MLS) was $339,000 or $22,750 (6%) less.  Far more alarming is that The Warren Group figure is $1,000 less than their median sales price two years ago, $340,000.

So, despite the lowest prices in two years and the sharpest drop in sales since 1995, what's distressing -- as a buyer's agent -- is that MAR's talking points continue to understate the risk for homebuyers:

"Today’s lower prices reflect softening buyer demand and rising in inventory levels, which have started to trigger modest price adjustments on the part of sellers. With demand still historical strong though, major price corrections are unlikely."

If homebuyers look beyond median prices to individual transactions, they'll see that major price corrections are already underway.  The Real Estate Cafe has already mapped nearly 400 sales below assessed value across 27 of the most expensive cities & towns in Greater Boston. In coming days, we'll post another 200 sales to our real estate bubble map including 50 in Greater Boston plus another 150 from Southeastern Massachusetts, primarily on Cape Cod courtesy of RealtyInsite.com.  If you see evidence that prices are falling, please post them to the real estate bubble map or create your own.  If you're one of our clients, we'll reward you for each property (see "Tipping Policy" for more detail.)

09:18 PM in Bubble map, Falling prices, Housing forecasts, In the News, Market Trends, Predictions prices will fall, Protecting yourself, Sales falling | Permalink | Comments (0) | TrackBack

August 19, 2006

CAUTION: You are entering "The Bubble Spin Zone"

Nospinzone750x1000_1 "You're traveling to another dimension, a dimension not only of sight and sound... but of mind. A journey into a wondrous land, whose boundaries are only that of the imagination... you're entering... the Bubble Spin Zone."

Reading some assessments of the current Massachusetts housing market, one wonders if industry spokespersons are taking their cues from Rod Serling classic, "The Twilight Zone."  Arguing "that prices are not declining sharply in response to falling sales," one recently told the Boston Globe that "I'm seeing some concessions from sellers, but not a whole lot." Last August when the same spokesperson was asked by WBZ-AM radio talk show host Paul Sullivan if buyers were in danger of buying at the height of the market, he said no.

So, to help inform homebuyers and protect them from overpaying in overvalued housing markets, The Real Estate Cafe has developed an interactive map to involve homebuyers (and fellow buyer agents) in the process of documenting falling housing prices, in Massachusetts and beyond.  Beyond price concessions, we are particularly interested in mapping sales below assessed value.  Would you believe that some buyer agents first began chatting privately about homes selling below appraised value this time last year?

If you are actively looking for a home, please visit our real estate bubble map before making an offer.  Working with site users, we've already mapped nearly 300 properties sold recently below their assessed value in 27 of the most expensive cities and towns in Greater Boston. We assume our readers know more than we do, so we've made it easy for you to post comments, add new properties, or start your own local bubble map.  Some consumers have begun documenting sales below assessed value in highly desirable towns like Cambridge, Brookline, Newton, and suburban communities near Route 495.

Shortly, we'll add another 150 sales below assessed value which occurred during the past six weeks.  Some of the properties already mapped have sold for at least $100,000 off, but don't let that cause you to rush into an offer.  The largest price reductions could be between Thanksgiving and New Year's Day; when historically, one in five properties sells for at least 10 percent off.  This year, we'll track how many sell for 10 percent below their assessed value, but we'll need your help to do it.

If you're one of our paying clients in Massachusetts, we'll reward you for each property you add to the one of our regional bubble maps.  See our Tipping Policy for more detail. (Get it?  Real Estate Cafe, Tipping policy?)

11:24 AM in Bubble map, Falling prices, Housing forecasts, Market Trends, Predictions prices will fall | Permalink | Comments (0) | TrackBack

February 17, 2006

Survey results: Where are housing prices headed in 2006?

2pricesheadedall_1

It's good to be posting original content to The Real Estate Cafe's blog again after our second bout of bloggers block. Like the first time, the slump lasted for nearly 50 days but this time we had an excuse:  we've been waiting for enough responses to go public with our 2006 homebuyer survey.  The first of them appears above, and if you click on the image to enlarge it, the results speak for themselves. 

We'll post more results in coming days, as well as commentary on the findings and their potential implications for homebuyers and sellers in Greater Boston.  The survey is closed at this point, but you can comment online or by record a sound bite, for potential use our real estate bubble audio time capsule (a.k.a. podcast), by calling on our reader line:  617-876-2117.

Event planning:  Discuss housing bubble and survey results in person with other homebuyers & sellers

More than 40% of the survey respondents said they would like a monthly (or bi-weekly) update on the real estate bubble, and we have already corresponded with several other bloggers in New England -- LowellDeeds.com, BostonBubble.com, and MassHouseMarket.blogspot.com -- about getting together offline to exchange perspectives with the public.  Would Thursday night meetings in Cambridge work for everyone?  Your feedback is welcome below or by emailing us privately at [email protected]

12:31 PM in Consumer surveys, Downward pressures, Housing forecasts, Podcasts, Predictions prices will fall, Protecting yourself | Permalink | Comments (0)

January 10, 2006

Homebuyer survey: Graph prices thru 2010

Graph_pricesthru2010_1During 2005, The Real Estate Cafe tried to keep its clients as well as the general public informed about the real estate bubble through our blog. Now we'd like to invite our blog readers in Greater Boston to give us YOUR opinion on the housing market and homebuying plans for 2006.

The survey takes just a few minutes and we need *** FIVE *** more respondents to reach our goal of 100. Your feedback will help us provide better services to consumers.

Privacy Policy: Survey responses will be tablulated as a group without attribution to individual respondents. Your identify is so confidential we don't even ask for your name or your email address, so there's no way we can share or, God forbid, sell them to anyone who might send you junk mail or spam.

06:37 PM in Consumer surveys, Housing forecasts, Predictions prices will fall | Permalink | Comments (0)