Thursday, December 11, 2008


Interest Rates For Last 6 Weeks
December 18, 2008 - The current mortgage interest rates have just fell to under 5.0%! Mortgage rates have never been lower, with the good news that the trend will probably hold or fall a little more in the next couple of weeks, but who knows how long that will continue. The fact is that we have historically extremely low interest rates. You would be crazy not to take advantage of this situation, with home prices that are at 2002 prices in many cases, and still a great supply of homes to choose from like you haven't seen in 2 decades.

Well this combination has been spurring Home Buyers to start making offers left & right. The number of homes going under agreement has been steady in eastern Massachusetts. We have been getting our Buyers some really great deals on real estate. We even have out-of-state clients who are buying up multiple properties as investments - sight unseen! (except for photos from MLS)

Click Here to Apply for a Pre-Approval from Eastern Bank Mortgage

Thursday, December 04, 2008

Home Sales up for the Second Straight Month as Affordability Drives Activity

On Tuesday, November 25, 2008, the Massachusetts Association of REALTORS reported that single-family home sales were up 6.6 percent in October 2008 compared to the same time last year. This is the second straight month of year-over-year increases in monthly home sales in 2008. Condominium sales were only down 1.0 percent in October compared to the same time last year. The median price for a single-family home in October was $294,950, while the median price for a condominium was $250,000.

Tuesday, October 28, 2008

Still Waiting to Buy a Home?
6 Reasons Why Now is the Ideal Time to Jump!

  1. The number of homes available on the market is dropping significantly.

  2. Home prices are lower than they have been in the last 3 years, but seem to be bottoming out.

  3. Interest Rates are still historically at their lowest.

  4. The Home Sellers are very motivated.

  5. You can deduct your mortgage interest (plus other costs) on your tax return, something you can't do with rent.

  6. There is a limited time $7500 tax credit for first-time homebuyers.

Many potential homebuyers have been sitting on the sidelines waiting for the real estate market to bottom out. It's not a bad plan, as long as you have perfect timing. The experts can't even agree among themselves as to whether prices have reached the floor, so trying to time the market can be tricky. Though there are plenty of people who are buying properties right now, it will be nothing like it the rush there will be once prices start to rise again and everyone decides to jump into the mosh pit of buyers making offers!

OK, so there will be more competition in the next 6 to 12 months, but you want to make sure that you don't overpay for a home that you may be able to get for less in 6 months. So if you wait, you will get a better deal, right?

Not necessarily. First of all the inventory (number of properties on the market) has gone down considerably in the last few months, giving you less choices. When supply goes down, demand goes up. When demand goes up, prices tend to rise. It's a basic law of economics. Compared to last year, there are 23% fewer property on the market today, and the number of sold listings are up. The good news for you is that the median on-market home price is down 5.8% compared to October 2007 (for Essex County). But with selection dropping, can it be long before the market turns around?
Mortgage rates are still historically low (take it from someone who paid 14% in the early 90's), with rates hovering around the 6% mark. But rates are extremely volatile, especially with the shape of the financial market and everything that is happening with Wall Street lately. A couple of weeks ago the rates dipped into the 5%'s, but that only lasted a week before jumping up to 6.5% (they have settled a little since). It is likely that rates will trend up, according to most experts. With each jump in interest, you will be paying more in your monthly payment, which would negate any (potential) savings you would make by waiting to buy.

Another reason to buy now is that you are losing all your potential tax benefit of home ownership. You are able to deduct all of your mortgage interest, PMI & closing costs when you buy a home. This would result in a significant tax savings for you. On a $250,000 mortgage that could mean $4600 in tax savings, or about $380 per month over renting. Try out the Rent vs. Buy and Tax Savings calculators here.

One of the recent incentives initiated by the Feds is the First-Time Homebuyer Tax Credit. It gives a 1st time buyer up to a $7,500 credit on your taxes when you buy any home purchased between April 9, 2008 and July 1, 2009. This is not a deduction, this is an actual credit. So if you owed $6,000 in taxes next year, not only would you not have to pay them, the IRS would give you an additional $1,500 refund. If you don't owe any taxes and you are expecting a refund, then the $7,500 would be added to your refund. How cool is that? The caveat is that this is really a refundable credit, so it would be repaid, but only at the rate of around $500 per year starting in 2011. It is basically a no interest loan payable over 15 years. Everyone should take advantage of this credit! Go here for some FAQ on this credit.
One thing I want to point out about what you hear in the media. All real estate conditions are local. What is happening in another part of the country has no bearing on what's the market is like here in Massachusetts, and especially the North Shore.

*All mortgage calculations and tax savings are estimates and are examples for informational purposes only. Please contact your financial, tax or mortgage advisor for more information.

Saturday, October 25, 2008

What's Really Happening with Real Estate Market
I'll be the first one to tell you that I'm no expert on the national real estate market. All I am concerned about is what is happening in the local market and how it will affect my clients, my agents, and business. Keep in mind that real estate is local. What is happening in California, Florida or Texas has no bearing on what is happening in the real estate market on the north shore of Massachusetts.
During the first 2 quarters of this year (2008), things were looking dismal, with a continued downward slide in prices, number of units sold, and traffic (number of inquiries received, open house attendees, web site visits, etc.). But something happened in the third quarter beginning in July. Buyers started making offers...and suddenly our business is up 85% year to date over 2007, and over 200% for the quarter. The fourth quarter has started off with the same gusto.
What has caused this complete change? I believe it is the result of several ideal buying factors all occurring at once:
  • Home prices have come down to a point where they haven't been in years. Add in the bank owned and short sale properties that are on the market and there are literally hundreds of bargains out there. The price that homes are selling at are equal to 2002.
  • The inventory of homes on the market is still high. Though the number has come down compared to last year, it is still considered historically high, giving the home buyer plenty to choose from.
  • Home sellers (including banks) have come to realize that if they want to sell their property, not only will they need to price it aggressively, they need to give some concessions to the buyer. You can get pretty much ANY seller to pay your closing costs, and even prepay your mortgage insurance to reduce your monthly payment!
  • Banks and Mortgage companies have money to loan...still at historically low interest rates. (under 6% just a couple of weeks ago) And you do not have to have perfect credit! You do have to come up with 3% down, but this can come from a gift (from a relative, etc.) or your retirement account (401K, etc). There are several government programs that will also match your down payment, so you only have to come up with 1.5% down.

The local real estate stats show that the number of units sold during the last 3 months is about equal to last year, with the average price down from last year (single family) but up from the previous 3 month period this year.

The smart home buyers are going out and looking at potential properties, and jumping on the ones that meet their needs and budget. You could wait another year to see if prices will drop any further, but in the meantime you continue to pay rent and will not be reaping the tax benefits of home ownership.

Jim Armstrong

Tuesday, August 19, 2008

The Real Estate Market is Trending Up! (Just don't let anyone know)
It's just amazing to me that there is still gloom & doom appearing everyday in the news about the real estate market despite the encouraging statistics that have been coming in since earlier this year. The National Association of Realtors® has now reported four straight months of rising housing prices, but it seems the media and Wall Street are ignoring it.

According to NAR statistics, the median home price has fallen 15% from a high in July 2006 to a low in February 2008. Since February, however, it has risen steadily every month. By May the index has risen a full 6.6%. Another indicator, the mean home price (otherwise known as the average home price), has also shown strength and has risen 4.5%. It, too, has risen every month since February of this year. "I just don't know where Wall Street's brains are today," said David Michonski, CEO of Coldwell Banker Hunt Kennedy in New York City. "Everyone on the Street is wringing their hands over housing when in fact the average American has been out this spring buying homes and pushing the median price higher.

This has got to go down as one of Wall Street and Main Street's biggest disconnects in history." In addition, on an annualized basis the volume of home sales has also risen somewhat from a low of 4,890,000 homes in January to 4,990,000 in May. "Rising prices on expanding volume should not a crisis make on Wall Street," says Michonski.

So why the crisis? "They say that there are bulls and bears on Wall Street but there are also pigs. Pigs try not just to profit from a crisis but create one to profit from. Today there are just so many people who have positioned themselves to profit from a crisis that they refuse to admit the reality of what is happening on Main Street. It might hurt their positions."

Is this the bottom? "No one can know for sure, but the hard data is clear. The median price has risen four straight months. The average American is out there taking advantage of bargains in their local real estate market. They are not listening to Wall Street but following their own belief that the best time to buy is when no one else is, and they are out there buying. If this keeps up, February may prove to have been the low in prices." "It is possible that it will not be Hank Paulson or Ben Bernanke who will pull this country out of a housing recession, but the good common sense of the average American whose affordability to buy a home is at a five year high and is acting on it."

(Reprinted in part from RISMedia. http//

Friday, June 27, 2008

Massachusetts Home Sales Experience Biggest April-to-May Increase in Past 10 Years

The Massachusetts Association of REALTORS® (MAR) reported that both single-family home sales and condominium sales experienced their biggest April-to-May percentage increase in the past 10 years. While year-over-year single-family home sales were down 10.1 percent in May, this is the smallest decrease since September 2007. May median single-family home prices were also down 9.2 percent compared to last year. The number of condominiums sold in May was down 24.5 percent, with median sales prices down 2.6 percent. On a month-to-month basis, median prices for both single-family homes and condominiums increased by 2.4 percent and 2.7 percent respectively from last month.

“While the number of sales for both single-family homes and condos were down in May, these decreases continue to narrow since the start of the year, which is definitely a move in the right direction,” said MAR President, Susan M. Renfrew, broker/co-owner of Renfrew Real Estate in Greenfield. “It is also a positive sign that median prices on a month-to-month basis continue to move up. However, the 9.2 percent year-to-year median price drop indicates that the growing number of distressed sales continues to have an impact.”

See the rest of the original article at the Massachusetts Association of REALTORS' web site.

Thursday, April 03, 2008

Feedback from my weekly newsletter

Aren't all agents in a real estate transaction are ultimately paid by the buyer. Granted no "extra" money needs to come out of the buyer's pocket at the beginning of a house search, but in the end we are paying for it. Right? - Rachel

Rachel, Thank you for your feedback.

You could look at it that way, but then you would have to say that a person who buys an automobile pays the salesperson's salary, or that you are paying the toll booth worker's salary when you cross the Tobin bridge.

Whenever you buy something, you are ultimately paying for (or at least part of) someone's salary.

A buyer's agent does not get paid directly from the Seller. They are paid by the Listing broker. In most cases the Seller pays the same amount whether there is 1 or 4 agents involved in the sale (and yes, there are many times when there are more than 2 agents invloved in a transaction).

I think what you are inferring to is that if there were no agents involved, a buyer would pay less for a home. A good buyer's agent can actually save you money, whether it is on the price of the home itself, inspection issues, knowing where to get the best mortgage, or any number of things that may be missed by the average homebuyer.

I am always open to hearing some feedback about any of the emails I send out. Please feel free to write to me any time you have a comment, suggestion or question.

Jim Armstrong

Real Estate Outlook: Market is Stirring
by Kenneth R. Harney

April 3, 2008
Affordable mortgage money is the fuel that is going to pull the real estate market out of the woods. And there are some encouraging signs that may be happening right now. Read the rest of the story at:

See the Real Estate Video News here for the latest updates on what is happening in the real estate market.

Video Real Estate Market Conditions for Salem Massachusetts

Saturday, March 29, 2008

Real Estate Outlook: Existing Home Sales Rise

We don't want to overplay the significance of this, but we actually got some positive economic news this week: Sales of existing homes last month rose for the first time in half a year, adding fresh evidence that the housing cycle may finally be bottoming out after nearly three years of correction.
The national gains in resales announced on Monday were not huge -- 2.8 percent for single family homes and 3.7 percent for condominiums. Total sales hit 5.03 million units, though Wall Street economists had predicted another DECLINE to a consensus estimate of around 4.8 million units.
So breaking the 5 million mark is pretty good, given where we are in the overall economy.
Now in fairness, the latest sales gains were accompanied by a decline in the national median price of homes sold -- down by 8.2 percent from year-earlier numbers.
You might think an 8 percent drop in prices is terrible. But let's face it: The only way we're going to burn off that 10-month overhang of unsold houses on the market is through more affordable, more realistic prices pulling buyers off the sidelines.
There's another factor at work pulling down the national median number: Relatively more houses are selling in places like Texas, North Carolina and Utah, where prices are moderate and affordable, while there are relatively fewer sales in ultra-high-cost California.
So the median price may be lower, but it's not just because home values across the country are crashing. The mix is different, so the median price is a lower number.
Low-cost mortgage money is also definitely helping to fire up sales. Average 30-year rates declined to 5.875 percent last week -- and any time mortgage money is under 6 percent, you're going to see more homebuying.
By the way, sales in California, which have been a leaden weight dragging down national market numbers for more than a year, are likely to improve in the coming months as the new "super-jumbo" FHA, Fannie Mae and Freddie Mac mortgages start hitting the street.
FHA's mortgages should be especially popular in California, where the median home price in some local areas like San Francisco exceeds $700,000. Thanks to FHA's low 3 percent minimum downpayment requirement, Californians should be able to buy a $700,000 house with just $21,000 down -- and walk away with a 6.5 percent 30-year fixed rate.
Fannie Mae and Freddie Mac, by contrast, want a minimum 10 percent down for their new jumbos.
So let's take our good news about sales and interest rates … and look to better days as the Spring buying season kicks off.
By Kenneth R. HarneyMarch 27, 2008
Copyright © 2008 Realty Times. All Rights Reserved.

Tuesday, March 11, 2008

Is State Crawling Out Of Housing Slump?

National Expert Says Region Moving In Positive Direction
UPDATED: 6:53 pm EST March 3, 2008

BOSTON -- A national real estate expert said Monday that the Massachusetts region could soon start moving in a positive direction. The chief economist for the National Association of Realtors offered a ray of sunshine to his New England members.
"The worst in the sub-prime foreclosures is probably peaking at this point, but most of the mortgages -- 90 percent of the homeowners -- are not exposed to sub-prime loans. A vast number of neighborhoods are doing fine," said Lawrence Yun, of the National Association of Realtors.

Massachusetts is just below the national average when it comes to foreclosures due to sub-prime mortgages.

Read the full story at The Boston Channel

Tuesday, March 04, 2008


When do you drop the price on your home?

If you are receiving a lot of buyers through your home but aren't receiving offers, then it is either priced too high or shows poorly. In this market, orice is the driving force. If you have receive offers, but they have been low-ball offers, then maybe you should look at the price. It's impossible to say when you should consider reducing your price without knowing all the circumstances, but if you haven't received an offer in 30 days, it's time to re-evaluate your price.

I just attended meeting of all the mortgage officers for one of the larger regional banks, and their treasurer and ecomomist was finding home prices dropping at 1-2% per month, and expected it to continue through this year. While I think this is a pessermistic outlook, what it could mean to you is that for every month your home sits on the market, it is worth 1-2% less. If you have a $400,000 home and it doesn't sell in 2 months, it could be worth $16,000 less. So even if you dropped the price by $10,000 you are still behind the eightball. You could be playing catch-up with the market for months.

An example of this is someone I know who was selling a condo in Florida (be glad you are not trying to sell there). They placed their property on the market in 2005 at just above what others had recently sold for (at the height of the market). Other units came on priced lower, and sold. They lowered their price to that level, but now the market had dropped even more. This scenario went on for 2 years until they dropped the price fast enough to catch up with the market. The bottom line - they originally listed their condo at $280,000 when they could have sold it for $250,000. Instead they played the waiting game and ending up selling for $140,000! This is an extreme example in a market that is much worst then we have here on the North Shore of Massachusetts (we actually have it pretty good for the most part)., but I have seen this same thing happen locally.

If you home is not selling, there is only one reason - marketing... and pricing your home correctly is an intergral part of marketing. Determining the correct price in a declining market isn't easy, though. But if your home is not getting many showings, or a lot of showings without offers, drop the price quickly if you are really serious about selling.

- Jim

Saturday, March 01, 2008


It's possible, but there are so many variables that it is impossible to give you a definate answer. I will give you a couple of hints, though.

  1. Buy low. Nobody can predict what is going to happen with the market in the next 2 year. Yes, some people try, many with very impressive credentials, but there are so many different opinions, who do you believe? The fact is, real estate will always go up in value over time. How much time is the big unknown right now. But if you buy low enough, you have a better chance of selling for a profit. And by low, I don't mean low-priced. I mean below current market value. Look at bank owned (REO) properties to find some great deals.
  2. FInd homes that mainly need cosmetics. A coat of paint, new flooring, and a spruce up of the kitchen and baths will dramtically raise the value and lower market time. Don't buy a home that needs major renovations unless you can do most of the work yourself to keep the costs down.
  3. Make sure the home is located in a desirable, fast-selling neighborhood. It doesn't matter how nice you make the place, if no one likes the neighborhood, they won't even want to see it, let alone buy it.
  4. Concentrate on curb appeal. Make sure the outside of the house is immaculate. Spend some money on landscaping.
  5. Enjoy the tax benefits in the meantime (assuming you are going to live there for the 2 years). Not only can you deduct the mortgage interest and some other expenses, when you sell you can make up to $250,000 profit and not pay any taxes on it! ($500,000 for couples). Please talk to your tax advisor for full details.

Remember - real estate is more than an investment when you are living in it. It is also your home. Whether you live there for 2 years or 30 years, buy something that you really like.

- Jim