Breaking: people buying homes b/c they want to own a home
Jan 2011 14

The Massachusetts Association of Realtors® has released results of a study on the reasons that people give for wanting to buy a home.

A new study on Massachusetts home buyers and sellers found that the top motivating factor cited by home buyers for the purchase of a home in 2010 was simply the “desire to own a home” and not some of the other well-known benefits …

When first-time and repeat home buyers were asked “what was the primary reason they purchased a home in 2010,” 36 percent responded it was the “desire to own a home”. The other top reasons included the “desire for a larger home” (8 percent); a “change in family situation” (8 percent); the “desire for a home in a better location” (8 percent); and the “home buyer tax credit” (7 percent).

So, the answer to the question, “Why did you buy a home?” is, “Because I wanted to own a home,” which seems pretty obvious but of course there’s more to that answer than that.

The study also reported that 55 percent of all homes purchased in the Bay State in 2010 were made by first-time home buyers (compared to 50 percent nationally).

Wow. More than half of purchases made last year were by first-time home-buyers, which surprises even me. I had no idea it was that high, and it’s going to make me think long and hard about my marketing and advertising campaigns. (Having said that, I think that people making purchases inside downtown Boston are more-likely to be repeat buyers, because of prices, for one thing.)

The MAR report included a lot of helpful data (for real estate agents) as well as those looking to buy or sell a home.

  • The median income of buyers (which is reported from 2009 household data) was down to $82,100 compared to $94,800 in 2008 and higher than the $72,200 national median income.
  • Fifty-five percent of home buyers were married couples, 19 percent single females, 12 percent single males, and 13 percent unmarried couples.
  • The median age of the first-time home buyer was 32. Fifty-four percent of first-time home buyers were between 25 and 34 years old, while 28 percent were 35-44 years. Only eight percent were 18-24 year years.
  • In 2010, 92 percent of buyers still financed their home purchase (98 percent of first-time buyers compared to 84 percent of repeat buyers). Savings was the chief source of the down-payment for 85 percent of first-time buyers with 48 percent of repeat buyers using proceeds from the sale of their primary residence.
  • Ninety-four percent of home-sellers in Massachusetts chose to work with a real estate professional. So much for “for-sale-by-owner”.
  • On the seller side, the most-interesting statistic is this:

    Thirty-seven percent of home sellers reported the main reason for deciding to sell was either a change in family situation (e.g., marriage, birth of child, divorce) or their home was too small. Only three percent reported selling their house because they could not afford the mortgage and other expenses of owning a home.

    Mortgage loan rates down during past week
    Jan 2011 14

    Mortgage loan rates fell during the past week according to a survey of lenders nationwide.

    According to data collected by Freddie Mac and reported by the Wall Street Journal:

    The average 30-year fixed-rate mortgage fell to 4.71% in the week ended Jan. 13, reaching a four-week low, Freddie Mac said. The rate was 4.77% in the prior week and 5.06% in the prior year, according to Freddie Mac, a buyer of residential mortgages.

    To obtain the latest rate, the mortgage required payment of an average 0.8 point. A point is 1% of the mortgage amount, charged as prepaid interest.

    As mentioned in the column, rates are a quarter of a percentage point lower than a year ago, which is good news for those looking to buy.

    More: Mortgage Rates Decline to 4-Week Low

    Back Bay and Beacon Hill Sunday Open Houses for January 16, 2011
    Jan 2011 14

    A complete list of all open houses scheduled for the weekend of January 16, 2011 in the downtown Boston neighborhoods of the Back Bay and Beacon Hill.

    Please contact me for more information and to arrange a private showing.

    MLS # Address Description List Price Time/Date
    71176951 26 Garden St. 10 room, 4 bed, 3 bath Other (See Remarks) $1,099,000 Jan 16 11:00 AM to 12:00 PM
    71149728 4 Pinckney 10 room, 4 bed, 4.5 bath Other (See Remarks) $2,895,000 Jan 16 1:30 PM to 2:30 PM
    71177859 534 Beacon St U:603 3 room, 1 bed, 1 bath Mid-Rise $365,000 Jan 16 2:30 PM to 3:30 PM
    71177987 105 Beacon Street U:10/PH 5 room, 2 bed, 1 bath Rowhouse $699,000 Jan 16 1:30 PM to 2:30 PM
    71177320 413-415 Commonwealth Ave U:5 6 room, 2 bed, 2.5 bath Mid-Rise $1,799,000 Jan 16 1:00 PM to 3:00 PM
    71177388 29 Brimmer St U:4&5 6 room, 2 bed, 2.5 bath Rowhouse $1,495,000 Jan 16 12:00 PM to 1:30 PM
    71177677 280 Beacon Street U:6 5 room, 2 bed, 2 bath Mid-Rise $749,000 Jan 16 12:00 PM to 2:00 PM
    71176890 133 Marlborough St U:8 3 room, 1 bed, 1 bath Rowhouse $589,000 Jan 16 11:00 AM to 12:45 PM
    71175041 145 Pinckney St. U:507 3 room, 1 bed, 1 bath Mid-Rise $419,000 Jan 16 2:00 PM to 3:00 PM
    71174847 465 Commonwealth Ave. U:2 6 room, 2 bed, 1.5 bath Brownstone $749,000 Jan 16 12:00 PM to 2:00 PM
    71169704 45-47 Mt. Vernon U:3B 6 room, 3 bed, 3 bath Rowhouse $1,699,000 Jan 16 12:00 PM to 1:00 PM
    71167744 145 Pinckney St. U:222 2 room, 1 bed, 1 bath Mid-Rise $395,000 Jan 16 11:30 AM to 1:00 PM
    71160417 303 Columbus U:1005 4 room, 3 bed, 3 bath Mid-Rise $1,799,000 Jan 16 2:00 PM to 3:00 PM
    71160643 11 Irving St U:4 3 room, 1 bed, 1 bath Rowhouse $315,000 Jan 16 12:00 PM to 1:00 PM
    71158552 10 Charlesgate East U:404 4 room, 2 bed, 2 bath Mid-Rise $649,000 Jan 16 12:00 PM to 1:30 PM
    71153516 109 Beacon St U:4 6 room, 2 bed, 1.5 bath Brownstone $799,000 Jan 16 11:00 AM to 12:00 PM
    71153586 271 Beacon Street U:A 3 room, 2 bed, 1 bath Townhouse $524,000 Jan 16 12:00 PM to 1:00 PM
    71153100 60 Myrtle St U:2 4 room, 2 bed, 1 bath Rowhouse $424,900 Jan 16 12:00 PM to 2:00 PM
    71149991 311 Commonwealth Ave U:81 5 room, 2 bed, 2 bath Townhouse $849,900 Jan 16 12:00 PM to 1:30 PM
    71138607 326 Dartmouth U:1R 3 room, 1 bed, 1 bath Brownstone $499,000 Jan 16 12:00 PM to 1:30 PM
    71141172 271 Dartmouth Street U:1H 3 room, 1 bed, 1 bath Mid-Rise $549,000 Jan 16 12:00 PM to 1:30 PM
    71140423 412 Beacon St U:2 4 room, 2 bed, 2 bath Mid-Rise $749,900 Jan 16 1:30 PM to 2:30 PM
    71132987 226 Marlborough Street U:5 5 room, 2 bed, 2 bath Brownstone $899,000 Jan 16 11:30 AM to 1:00 PM
    71138224 199 Marlborough St U:701 5 room, 3 bed, 2 bath Mid-Rise $845,000 Jan 16 12:00 PM to 1:00 PM
    71174959 103 Beacon Street U:6 7 room, 3 bed, 3 bath Brownstone $1,799,000 Jan 16 12:00 PM to 1:30 PM
    71151544 36 Joy Street U:D 3 room, 1 bed, 1 bath Loft $419,000 Jan 16 11:00 AM to 12:00 PM
    71133191 405 Commonwealth Avenue U:5 4 room, 2 bed, 1 bath Brownstone $599,000 Jan 16 11:00 AM to 12:00 PM
    71130715 63 Myrtle Street U:#5 5 room, 3 bed, 2 bath Rowhouse $750,000 Jan 16 11:30 AM to 1:00 PM
    71171114 295-297 Beacon St U:32 6 room, 2 bed, 2 bath Mid-Rise $725,000 Jan 16 12:30 PM to 2:00 PM
    71117645 246 Marlborough Street U:3 2 room, 1 bed, 1 bath Brownstone $324,000 Jan 16 12:00 PM to 1:00 PM
    71101266 106 Myrtle St U:4 5 room, 2 bed, 1 bath Mid-Rise $549,000 Jan 16 12:00 PM to 1:00 PM
    71176915 51 Commonwealth U:B 10 room, 4 bed, 4.5 bath Townhouse $4,950,000 Jan 16 12:00 PM to 2:00 PM
    71083408 349 Marlborough U:2 4 room, 2 bed, 1 bath Brownstone $749,900 Jan 16 12:00 PM to 1:00 PM
    71064709 43 Commonwealth Avenue U:PH 5 room, 2 bed, 2 bath Brownstone $1,990,000 Jan 16 1:30 PM to 2:30 PM
    71059771 45 Commonwealth Avenue U:2 8 room, 3 bed, 3.5 bath Brownstone $4,500,000 Jan 16 12:00 PM to 2:00 PM
    71059793 45 Commonwealth Avenue U:3 8 room, 3 bed, 3.5 bath Brownstone $4,450,000 Jan 16 12:00 PM to 2:00 PM
    71059854 45 Commonwealth Avenue U:4 8 room, 3 bed, 3.5 bath Brownstone $4,475,000 Jan 16 12:00 PM to 2:00 PM
    71141253 411 Marlborough St U:8 5 room, 2 bed, 2 bath Mid-Rise $625,000 Jan 16 1:00 PM to 2:00 PM
    71160414 303 Columbus U:901 3 room, 2 bed, 2 bath Mid-Rise $1,399,000 Jan 16 2:00 PM to 3:00 PM
    71110272 121 Marlborough St U:3 4 room, 2 bed, 2 bath Brownstone $974,000 Jan 16 12:00 PM to 2:00 PM
    71160416 303 Columbus U:1002 3 room, 2 bed, 2 bath Mid-Rise $1,599,000 Jan 16 2:00 PM to 3:00 PM

    Above, 413-415 Commonwealth Ave #5, Back Bay, Boston, Massachusetts. Jan Boyce of Coldwell Banker Residential Brokerage is the listing agent.

    Boston snowstorm photos, January 12, 2011
    Jan 2011 13

    Several photos of the Boston Common and Public Garden and surroundings taken last night after the Blizzard of 12 January.

    Click any image for pop-up gallery.

    IMG01046-20110112-1824
    IMG01044-20110112-1820
    IMG01039-20110112-1817
    IMG01028-20110112-1715
    IMG01027-20110112-1714
    New condo lending guidelines may add add’l hurdle
    Jan 2011 13

    A good job, a big down payment, and great credit will go a long way to getting you approved for your mortgage loan.

    There’s just one other thing you’ll need and it’s completely out of your control.

    If you’re thinking of buying a condo in a new project, you will have to hope that the project is able to qualify for third-party approval or you’ll likely find your options to be limited when looking for a lender.

    The New York Times has a great article on this in yesterday’s newspaper.

    The guidelines and approvals come from Fannie Mae, the buyer of home mortgages; Freddie Mac, its smaller competitor; and the Federal Housing Administration, which insures loans. The rules were meant to help strengthen their balance sheets as they faced a surge of loan defaults in the condo market.

    “If a condo project is not approved, it makes it very difficult to get financing for a first-time purchase or refinancing,” said David Adamo, the chief executive of the Luxury Mortgage Corporation in Stamford, Conn.

    According to the article, the National Association of Realtors estimates that as many as 23,000 condo projects nationwide may lose FHA approval over the coming months.

    In order to qualify for FHA approval, generally the project has to have 30 percent of its units sold, the condo association must have a certain amount of money set aside in reserves, and there are limits on how many units can be investor-owned. Fannie Mae’s and Freddie Mac’s guidelines tend to be stricter.

    If you can’t get a loan the “traditional” way, you can always use a local lender or through something like your work’s credit union. You may end up having to pay a higher interest rate, however.

    What it means to you is that you should do a good amount of due diligence before making an offer on a condo in a new development. Find out if it qualifies for approval. Make sure your offer is contingent upon getting mortgage loan approval by a lender and that you can withdraw without risking your money, if it doesn’t.

    Talk with a mortgage loan professional.

    More: Stricter Lending Guidelines for Condos

    Underwater mortgage stats under question
    Jan 2011 13

    You hear in the news everyday that a lot of people, as much of 25% of loan borrowers, owe more on their home mortgage loans than their properties are worth. These mortgages are called “underwater”. The term is used whether the owner is estimated to owe $1 more on his/her loan than his/her home is worth or $1 million.

    But, further analysis of the data collected and reported has some wondering if the number is wildly inflated. Stopping for a moment from considering does it even matter, the idea that what we’ve heard is not based on any sort of reality, is startling.

    Wall Street Journal columnist Carl Bialik discusses it in his weekly column and on his WSJ ‘Numbers Guy’ blog.

    [I]n a rare instance of mild good news in the housing market, the 1-in-4 figure, and the fear it provokes, seem overblown. It is calculated using assumptions in ways that inflate the number of underwater homes. And more than half of these homes are underwater by a small margin, meaning that for various reasons those homes are unlikely to trigger an epidemic of defaults.

    First off, consider that a third of Americans who own their homes actually “own” them – they have no mortgage loan outstanding. So, they’re in no danger of default.

    As he says, Mr Bialik estimates, based on data he collected from the very same sources* that report the high number of underwaters, half of these underwaters would owe a small amount if they had to sell. (Of course, why would anyone have to sell unless he/she was having financial difficulty?)

    So you need to do all these calculations before you get even close to the number everyone wants: how many homeowners currently with mortgage loans outstanding are likely to default – to walk away from their mortgages?

    The “real” number is much smaller than you hear in the news.

    What’s even more important to us, in Boston and Massachusetts and New England, is that the majority of owners with underwater loans are far, far away from here.

    The problem also is concentrated in several states. Arizona, California, Florida, Michigan and Nevada had about 31% of mortgaged homes but 53% of underwater ones.

    Information is useful, most of the time. It helps us form opinions, from which we can act. So, the WSJ provides more information to consider.

    The point about “does it even matter” is that, until the economic meltdown, almost all homeowners with mortgages were “above water”. Only with the cataclysmic events of the past two-three years have so many people ended up with what are, at least for now, “bad” investments. Whether the number 5%, 15%, 25% or even 50% doesn’t really matter, if it means people aren’t free to do whatever they please in regard to holding on or selling their homes.

    More: Underwater Homes Estimate of One in Four Springs Leaks

    Also: Housing Statistics Hit Rough Waters

    *Those sources are CoreLogic and Zillow.com

    Welcome to the Boston Condo Blog
    Jan 2011 13

    Hello, new visitors to the Boston Condo Blog.

    WRG is full-service brokerage firm located in the Back Bay. We help buyers and sellers of residential real estate in all of Boston’s neighborhoods. We also have a team of rental leasing agents located in the Back Bay and in Allston, at the corners of Commonwealth and Brighton avenues.

    This blog will be helpful for anyone looking to buy or sell a condo or single-family home in Boston. News about pricing, listings, neighborhood developments, and quality of life issues. It will also include news and information on new residential, commercial, institutional, and educational construction projects and developments.

    Please bookmark the Boston Condo Blog website and track us on facebook and twitter.

    Thank you.

    Beacon Hill condo for sale includes famous neighbors
    Jan 2011 11

    A Beacon Hill condominium home has hit the market. Its location, in Louisburg Square, means the new owner will have some famous and interesting neighbors.

    The condo, located at 1 Louisburg Square, #5, is a one-bedroom, one and ½-bathroom, ~683-square foot home, priced at $925,000.

    Louisburg Square is one of Boston’s most-historic addresses, home to the city’s hoi-polloi since the 17th-century. Current residents include US Senator John Kerry and wife, Teresa Heinz, and past-gubernatorial candidate, successful businessman, and all-around good guy Chris Gabrieli, among others.

    Much has been made of the exclusivity of the Square; it’s actually a private way, meaning the street surrounding the square, as well as the Square itself, is private property. Parking is prohibited except to abutting residents; the new owner at #1 Louisburg will get to enjoy a space, according to the real estate listing.

    The Boston Herald had a long article about Louisburg Square just the other day, with the reporter and nearby residents bemoaning the fact (fact) that the Square is off-limits to those who live nearby.

    My take? So what? There are plenty of private places in the city and anyone who’s ever had a backyard can comprehend the concept of “private property”.

    If you’re interested in seeing the condo, I’d be happy to show it to you. Be forewarned, however; it looks to be in need of a rehab. The listing included no photos and the description reads, “Come customize this into into a perfect pied-a-terre,” leading me to think you might need to bring a hammer and some nails to the closing.

    Above, the exterior of 1 Louisburg Square, #1, Beacon Hill, Boston, Massachusetts. Brad Rowell of Coldwell Banker Residential Brokerage is the listing agent.

    Foreclosure lawsuit throws segment of housing market into turmoil
    Jan 2011 11

    As you probably heard, the Massachusetts Supreme Court handed down a decision last week that affects the entire US residential real estate market.

    Without retreading all the news, basically all you need to know is that the Ibanez ruling means lenders need to do a much-better job of filing all their paperwork before trying to foreclose on anyone’s home. In the Massachusetts’ case, it didn’t. The lender didn’t track its loan from origination through securitization, so it couldn’t prove it actually owned the loan, that it owned the house, so it shouldn’t have been able to foreclose.

    So, banks will need to take a breather while they do all the research and pull together all the papers.

    The (un?)intended result of this is, I think, foreclosures will slow down, by a lot. While this seems like a nice thing, for those who are about to lose their homes, all it does for the rest of us is delay any housing recovery, and, by association, any improvement in the economy.

    That’s the worst fear, of course.

    There’s another, related issue. Suppose you are an investor or even a home-buyer who is interested in a property currently in foreclosure. You’d like to buy it. However, why would you risk your money if the ownership of the home cannot be proven? How much do you trust the bank to have done all the paperwork in order to get a “clean title”. Cases have happened where new owners move into their properties and then the courts come along and say, “sorry, dude, you don’t own this house, because your lender had no right to sell it.”

    That’s a problem! (I feel comfortable making at least one recommendation on this: Make sure you buy homeowners’ title insurance!)

    While I could recommend to you that you never buy a house in foreclosure, that’s for me to say. Many, many people have invested in these properties and made small and huge fortunes off of them.

    Doing so requires more patience than I could ever have and more risk than I could ever handle.

    More on the ruling and its effects:

    Wall Street Journal: Two Banks Lose in Foreclosure Cases

    Boston Globe: Galvin seeks foreclosure tribunal

    Massachusetts Real Estate Law Blog: Ibanez Foreclosure Ruling Upheld

    Fort Point Channel to see residential housing, not offices
    Jan 2011 11

    A project that has been on hold due to the economy looks to be taking at least one step toward eventual construction.

    The Boston Globe is reporting that plans to redevelop as set of buildings on Melcher Street in the Fort Point Channel neighborhood of Boston have been modified.

    The developers’ plan has been overhauled since it was first proposed in February 2008, and consisted of combining all three buildings into a monolith, which would house solely retail and office space. The new proposal, which the developers will present to Fort Point neighbors on next week, will include 38 residential units, including five affordable artist live/work spaces.

    The co-developers are the Archon Group and Goldman Properties, who are also behind the proposal to construct an 180-unit apartment building on nearby A Street.

    Click through to read more about how the two projects are related to one another and how neighbors are wondering if something fishy is happening.

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