Boston is Fortunate
May 2010 12

Boston.  Is.  Fortunate.  Repeat after me.  Boston IS fortunate.

We are all overly aware that the real estate market is not what it used to be.  Since 2006 we have seen a constant decline in home prices throughout the U.S., some cities such as Las Vegas, have even seen over a 55% decline in home values.  But again let me say, Boston. Is. Fortunate.  Take a look at the graph below:

As you can see above, Boston has remained reasonably strong in comparison to most of the country’s larger cities.  Facing a 15% decline from our market’s peak doesn’t seem too terrible compared to the 36% in California cities or even the 21% in New York City.  Every day however, I see reminders as to why we shouldn’t allow ourselves to get lost in our own world of good product and decent market strength.  We are no longer in a seller’s market, we still face foreclosures and we need to adjust accordingly.

At 9:57 last night, I received a frantic phone call:

“Betsy, today is the first time in my life that I’ve missed a mortgage payment.  They’re going to foreclose on my home if I don’t sell it.  I’m putting it up on the market.  Yes, I know it needs some work but I’ll just give the new buyers a credit to do all of the repairs themselves.  I have to sell it RIGHT NOW!”

I reminded my dear, extremely stressed and temporarily irrational friend, of what I mentioned earlier:  ”We are not in a seller’s market, our market is down… you have to work for the sale”.  So she listened, or pretended to listen, to the points I laid out for her and for anyone else in her position:

1. If you miss a mortgage payment, relax, pull yourself out of the world of frantic, impulse decisions and get back on rational ground.  Depending on your bank you may have four to six months before they begin the foreclosure process.

2. Ask yourself whether you’ve done everything you can to avoid selling.  If not, KEEP TRYING, you don’t want to sell if you don’t have to!

3. You have to make your home sell. Competition is tough and you have to stand out. Remember my friend saying that there was work to be done but she would just give the buyers a credit to do it themselves?  BAD IDEA! When a buyer walks into a home, they want to be impressed; they want to be inspired to purchase your home. What they don’t want is to hear that they’ll have work to do after they’ve purchased it.

4.  If you do have work that needs to be done and you’re on a tight budget, prioritize! What’s going to make the best impression on potential buyers? If you have a hazardous material in your home such as asbestos or lead paint, these are high on the priority list.  In some instances, depending on what you owe, the cost may be greater than the benefit but if you can have them removed by a professional, it opens up your home a whole new group of potential buyers: families with young children.

5.  Don’t go through it alone.  Selling your home is a difficult process on its own.  That process will become exponentially harder when you carry the weight of a potential foreclosure.  Ask a real estate agent to work on your behalf.  Real estate agents are experienced in dealing with potential foreclosures and short sales (if it comes to that), have greater marketing capabilities, more resources, access to large networks of potential buyers, time to dedicate to getting your home sold, and most importantly, are there to protect you while getting the deal done.

A real estate blogger I follow recently stated that “Regrettably, most people cannot be 100% sure that they will remain safe from foreclosure because they can’t foresee the unexpected”.   While homeowners in the Boston area remain at risk of foreclosure, the reasonable consistency in our market has bought homeowners some time to refinance, prepare homes for sale, and get them sold.  As with the case of my desperate friend, this strength will fortunately allow her to sell quickly and avoid foreclosure altogether.  So let me say again, Boston. Is. Fortunate.

1 Comment

  1. Boston is fortunate.. Dandy :)

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