Tuesday, August 31, 2010

5 Reasons Why Massachusetts Home Sales Will Continue To Rise

 Debunking The July 2010 Housing Report: 5 Reasons Why Massachusetts Home Sales Will Continue To Rise
by Marc Canner on August 27, 2010

A National Association of Realtor’s report released Wednesday indicated that home purchases fell 27% in July, a drop that jolted the real estate industry, according to the Wall Street Journal, and sent shock waves through the broader economy. As a result, a number of economists provided dire warnings of a continued down slide in real estate prices.
At first blush, this news could have the “echo chamber” effect of  turning the purported downturn into a self-fulfilling prophecy, discourage consumer confidence, and sidelining a number of prospective Massachusetts home buyers from the fall housing market.  Here are 5 reasons why the national housing report won’t impact the Massachusetts real estate market.
1.  Massachusetts Has a Strong Housing Market.
Massachusetts has bucked the national trend as its housing market has remained strong. Indeed, parts of the Massachusetts housing market actually saw a surge in activity in July 2010:
  • From July ’09 to July ’10, these towns had an increase in sales:
  1. Norwood (+117%)
  2. Bedford  (+78%)
  3. Easton (+27%)
  4. Brookline (+20%)
  5. Melrose (+20%)
  • Several towns saw an  increase in year-to-date median home prices in July, including:
  1. Cohasset (+25%)
  2. Marblehead (+12%)
  3. Dennis (+6%)
  4. Norwood (+5.9%)
  5. Melrose (+4%)
2.  The June 1st Time Tax Buyer Credit Caused An Artificial Decrease in July Purchases.
The government stimulus program brought out the seasonal first time buyer’s in full force during June. Thus, the normal sales cycle was altered which skewed the July numbers
3.  Massachusetts Is Always Out In Front Of The National Numbers
The national housing report gives equal weight to markets blighted with foreclosures and economically hard hit areas like Detroit, Las Vegas, Florida, Arizona and parts of Southern California. Greater Boston has historically been a unique “inelastic” market along the lines of Washington, D.C. and San Francisco. Negative national trends do not necessarily correlate to the Massachusetts real estate market.
4.  “It’s the Economy, Stupid.”
Massachusetts has a strong and diverse economy, a number of high paying jobs (no, I’m not running for governor), a very limited number of new housing starts, and several industries that have constant employment turnover- a tried and true recipe for a hot housing market.
5.  Historically Low Interest Rates
The average rate for a 30 year mortgage has fallen to 4.5%, a 50 year low! Prospective borrowers who pass on this- caveat emptor “buyer beware.” A number of economists predict that the Fed will gradually ease rates back up to counter inflation.

Reprinted with permission from The Massachusetts Real Estate Blog

Tuesday, August 10, 2010

Fewer Home Owners Are Under Water

Fewer Home Owners Are Under Water
In the second quarter of 2010, 21.5 percent of borrowers owed more than their homes were worth. That’s down 7.7 percent from the first quarter of the year when 23.3 percent of home owner with mortgages were under water.

Much of the improvement came from homes falling into foreclosure, wiping away negative equity. Rising home values also improved the situation in 45 of the metropolitan statistical areas, including the northeast region of the United States.

Monday, August 09, 2010

Mortgage Rates for Massachusetts at All-Time Lows...Again!

Mortgage Rates are at all-time lows right now; 30 year fixed, 20 year fixed, 15 year fixed and even Jumbo Rates, and they're showing no signs of rising! I don’t see them going any lower, but staying down at these levels for a while.

What’s moving Mortgage Rates? No one really knows right now but this is usually what happens, bonds go up, stocks go down.  Stocks go up, bonds go down. It’s really pretty easy to understand. However this mortgage market that we are in  is no where near normal.  In fact, it’s the total opposite, it’s like nothing we’ve ever experienced.

Refinance loans account for the majority of all present loan production, but home buyers are getting these incredible rates, too! What I don't understand is why there are not more home buyers placing offers, and why some properties just languish on the market when they are priced competitively. I have to think that the home buying consumer just does not have enough confidence in the overall economic outlook yet. I'm just afraid these same people may miss out on a rare real estate buying opportunity...low home prices and rock bottom mortgage interest rates.

30 year fixed mortgage rates remain in the 4.375% to 4.625% range.  The 30 year fixed rate mortgage is 4.375% for a qualified borrower.