1. Are there a bunch of foreclosures driving down home values in our area?
2. How much of a discount can I get if I buy one of these foreclosure properties?
3. Is the market getting worse or better out there?

Foreclosures in Massachusetts

RealtyTrac reports that Massachusetts is one of the top 5 states in % of foreclosure sales for the 1st quarter of 2010. (June 30th – Not really sure why it took so long to issue these stats??)  As alarming as this sounds, let’s look a bit closer…

Number of foreclosure sales were 2,111 in quarter 1, which is 42% of all sales!  Sounds bad, right? 

How does this compare to other states they reported on?  It works out to .9% of Total foreclosures in the United States.

Still digging a bit deeper, I checked MLS data for number of sales in MA for the 1st quarter.  MLS reports 6628 total single family home sales, which works out to 32% of all single family home sales are foreclosure sales.  Since they report 2,111 were ALL sales, let’s add condos and multifamilies to that number… now it is over 11,000 sales, or about 19% of all sales. 

Remember, this MLS data does not include any For Sale By Owner homes either.

OK, I know what your thinking… It is still a high number, Ed!  I agree.  So, because I am not feeling this strain on the marketplace as a Full Time Realtor in Metrowest Boston, I want to dig even deeper!

In the Metrowest towns of Ashland, Framingham, Holliston, Hopkinton, Natick, and Southborough I pulled data from MLS regarding bank owned property.  Here are the findings using only single family properties since the start of 2010:

17 out of 552 Active homes are labeled Bank Owned (3%)

13 out of 158 Under Agreement homes are Bank Owned (8%)

34 out of 597 Sold homes are Bank Owned (5%)

I don’t know about you, but there are two results from this investigation. 

     Number 1 is that I feel better now than I do after reading RealtyTrac’s data.

     Number 2, where the heck are they getting those numbers from?  

Some explanations is that they classify homes in “pre-foreclosure” or “scheduled for auctions” and MLS is only as good as the agent that enters in the data as “lender owned” or “Short Sale”. 

In my test of RealtyTrac’s data, the 1st property I checked was in Ashland.  It was listed as a fairly new addition to the property site.  Come to find out it was sold months ago on MLS.  So for some reason their data is not updated as it should be.

Discounts when Buying a Foreclosure Property

Realtytrac reported that there is quite a discount that a buyer of a foreclosed property can receive.  Again, take this with a grain of salt since the way they create these numbers is, in my opinion, flawed. 

Massachusetts’ average Foreclosure sales price is reported as $161,089.   This is about a 35% discount to non-foreclosure sales in the marketplace for the 1st quarter.

They seem to compare Average Sales Prices of all Foreclosure Sales to Average Sales Prices of Normal Sales.  Since the majority of Foreclosure properties are on the lower end and are trashed by the past owners or lack of upkeep, OF COURSE they are going to be a discount.  Classify this stat as

“worthless data for people who think for a moment!”

From my experience, if you are handy and have some cash… there are lots of great deals out there to go after.   These are both foreclosures and non-foreclosures!

Local Market Conditions are Improving

The best evaluation of the local marketplace, in my opinion, contains the following:

A Local group of towns

Use a Specific category of housing, such as Single Family Homes

Look at past several years data to compare it to

Use 6 mos. or a year worth of history

When I do this for Metrowest Boston towns (specifics I am happy to share if you wish), I find the marketplace is showing strength even though Home Owners have taken a hit on property values over the past several years.  So, better for Buyers than it is for Sellers.

Here are two tidbits:

     Average Days on Market is 96.  Over the past 5 years this has ranged from 85 days to 119 days, so very reasonable.

     Ratio of Selling Price to Listing Price is 97%.  Over the past 5 years this has ranged from 96-98%, so again, very reasonable number.

I put together a graph of the Selling Prices over the course of the past 5 years for these Metrowest towns.  There is a 17% decrease in Median Home Values over this time frame.   This is data from July to July in each one of these years.

Here is a graph of the Total Number of Sales for these local towns.  Look at that promising increase of sales over the past year!  The area is running 10% fewer sales than we had 5 years ago.

Everyone under the sun is forecasting that the economy is faltering again, and it is very rare to hear that any uptick in this marketplace has legs to it.  Therefore, my report is that the local marketplace numbers right now have strength.  We will have to evaluate in this way, often, to see if this continues.  I will keep you posted on these numbers over the second half of the year.

There’s nothing to sell!!

Compared to 2009, the number of available listings fell 15%.  In 2009 there were 67 listings, today there are only 56.

The Big Picture:

The Warren Group reported on the February real estate market for all of Massachusetts:

• Single Family Median Prices jumped 8.4% vs. Feb 2009
• Single Family# of sales climbed 13.5% vs. Feb 2009
• Year to Date Median Prices are up 9.8%

• Condo Median Prices jumped 6.8% vs. Feb 2009
• Condo # of sales climbed 8.9% vs. Feb 2009
• Year to Date Median Prices are up 10.6%

Is this a trend?

Median home prices have risen for 3 consecutive months (year over year).

Number of Sales in homes have risen year over year for 8 months in a row.

What is happening more recently?

The Massachusetts Association of Realtors tracks Pending Sales.  This tracking of signed Purchase & Sale Agreements provides reliable information about upcoming sales numbers. 

The number of homes put under agreement in March was up 27 percent compared to the same time last year.  Condos jumped 38%.

See full report from MAR on pending numbers.

Specifically Holliston:

Over the 1st 3 months of 2010, there were 20 sales, with a median price of $336,000.

Compared to 2009 sales, there were 15 sales and median price of $315,000.

Average time on market was 97 days.

Compared to 200 average days on market in 2009.

Sellers received 97% of their Listing Price, and 93% of their Original Asking Price last quarter.

That, my friends, is strength in the local real estate market!

This Sunday, April 11th, it is forecasted to rain, so go check them out.  As part of a national push by Realtor associations, 35 states have agreed to increase open house availablity on this weekend. 

As of Friday, there are 27 open houses planned in Ashland, 27 in Holliston, 64 in Framingham, 77 in Natick, 28 in Hopkinton, and 66 in Franklin, to name a few.

Goals are to increase awareness of the available homes, kick off the Spring market, and capture home buyers prior to expiration of generous tax credits.

Many potential first-time home buyers are feeling pressured to find a house because they need a purchase-and-sale agreement by April 30 to qualify for an $8,000 tax credit. A similar deadline confronts so-called “move-up” buyers who want to use a $6,500 credit to help buy their next house.

MassHousing is also holding their annual Home Buyer Fairs called Opportunity Knocks.  Check out the website for locations and times.  The event offers free counseling services for prospective Buyers.

Where are the Open Houses?  Go to www.MARealtorOpenHouses.com for a quick search.

Better yet, call Ed Daniels for a private tour of all the homes available on the market!

Click here for report on National Website Traffic. 

Realtor.com has been on the scene for a long time and has consistantly reported more traffic than all other sites.  Here is a report out that lists the top websites dealing with real estate.  Are you listed there?

Being a home seller in today’s marketplace requires you to be found on most of these.

Because the MLS data is shared with almost all of these sites, just by getting your home listed on MLS will cause it to be found on most of them. 

Do you get added exposure on these sites when you list with your agent?  This includes additional pictures, attaching a virtual tour, links to your listing agent, floor plans, etc.

Ed Daniels of Remax Executive can be found at www.MAhome.com, which just misses the number 1 spot of 7 M unique visitors per month!

You are still frantic getting ready for the first open house.  Looking over the Massachusetts homes for sale on MLS has been a pasttime of yours for at least a month. 

Boy, you are practically famous… your home is there in the real estate section of the local paper.  Thousands of readers are going to be viewing your beautiful home!

Sorry, Reality here! 

The majority of Serious buyers are NOT looking in the real estate section of the newspaper.

Want to hear the top 3 people looking at the real estate section:

• Home sellers
• Real Estate Agents
• Moms of home sellers

If you are serious about hearing where the Home Buyers are coming from, there is one main source to turn to.  The National Association of Realtors  conducts a survey each year and compiles the results in a Profile of Home Buyers and Sellers.  Over 9,000 buyers and sellers of the past year responded to the survey.

The results of this survey:

3% of home buyers used newspapers and buying guides as their first step taken in the buying process.

47% of buyers researched on-line for homes or home buying information.

In response to additional questions about what information sources were used in their home buying search:

90% Internet

87% Real Estate Agent

59% Yard Sign

46% Open House

40% Print Newspaper advertisement

So, as a smart businessman, when I am given the job of marketing your home for sale, where do you think I invest all my time and energy?  Getting a home in the best possible position on the internet and with the local Realtor community is my main focus! 

Great pictures, virtual tours, staging of a property, Featured internet exposure, and broker tours are the ticket to selling a home!

Of course it is nice to see your home in the newspapers, but unfortunately, it is not even close to being as important as presented well on the internet!

Ed Daniels of Remax Executive Realty can be reached at 508-341-7880 or Ed@MAhome.com.  The MAhome Team works with buyers and sellers of real estate in the Metrowest region of Boston, Masschusetts.

Statewide the single family home sales increased 4.1% over 2008.

Single family median selling prices fell 6.8% compared to 2008, falling from $311,000 to $290,000.

MAR separates out these reports into “regions”.  Metrowest area of Massachusetts falls within the region of Greater Boston.  This region saw the following results:

• A 2.6% increase in sales over 2008
• Median prices declined 3.6% compared to 2008
• Median price is $434,000 in this region

Condominium sales statewide also increased slightly compared to 2008.  From 15,039 to 15,361, a 2.1% increase.

Median selling prices for condos fell greater than single family homes, with a statewide decline of 7.2%.  Our Greater Boston region had condos faring better than the state averages with only a 5.4% decline for the area.  The median selling price for a condo in Greater Boston is $330,000.

For the full press release from MAR and podcast review of the marketplace, click here.

One other newsworthy point with this review is regarding inventory in this marketplace.  December 2009 supplies of single family homes and condos were at its lowest level since December 2001.  The December peak was in 2006.  This is the 21st  straight month that inventory has gone down compared to the year before for both homes and condos.

Ed Daniels is with Re/Max Executive Realty of Hopkinton MA.  A Realtor for 12 years, Ed can be reached at 508-341-7880 for any additional questions about the housing market.

Here is a quick bullet of Holliston’s Marketplace:

• Average selling time over the past year has been 122 days on market.
• Median price is $350,000 over the past 12 months. Same as previous year.
• There are currently 36 Active single family homes on market.
• Holliston has 3.2 months of inventory currently – Under 4 months is considered a Seller’s Market
• Sellers are getting 95% of Listing Price over the past year.  91% of Original Asking Price.

 Just so that I am not coming across those readers that think I am a typical Realtor reporting only the “positive” stats, I have reported Median prices as opposed to Average prices.  This is because Average prices create a higher weight to the higher end priced homes and Median prices do not. 

That being said, the average prices for the past 12 months were $388882, down from the 12 months previous of $396328.  This results in a 2% decline in average prices in Holliston.

I have a buyer currently looking to spend up to mid $500K in Holliston, Medway or Hopkinton.  I just mailed a postcard to 400 Holliston households asking them if they were considering a move.  In 12 years as a Realtor, I can say I have never done this before. 

I believe this type of low inventory will result in upward price pressure for Holliston housing stock in 2010.

I was reviewing the Massachusetts Association of Realtors  latest housing data that was posted and came across a nugget.  It was a historical graph for single family home sales.  It shows 18 years of sales data in the month of October.

OK, the MAR reported 3,828 sales of single family homes in October state wide.

This number of sales is very close to the same number in 2005 and about 17% more sales than last year.

Were 2001 and 2002 good years for home sales?  This 2009 number is stronger than both of those years!

I read about all the naysayers out there about the housing market (just look at comments on Boston.com  real estate articles) but the stats above provide perspective.

Sellers don’t fell as good these days to hear that their property has fallen in value over the past few years, but the fact is that the strength of the housing market is there.  Whether this is because of buyers taking advantage of tax credits, distressed properties, or pent up demand, the fact is that houses are still selling.

Ed Daniels is part of The MA Home Team servicing the Metrowest Boston area.  Under Re/Max Executive Realty, he has been a full time Realtor for over 11 years.  Contact him at 508-341-7880 for any questions you may have with the local market.

MarketWatch is reporting this morning that the Senate has struck a deal to expand on this program.

Many Realtors are seeing this tax credit as the main motivation of home sales this year.  In 2008 there was a “tax credit” that was really a no interest loan to First Time Buyers.  This year that was changed to a real tax credit of $8000 for these buyers.

The report is that today’s agreed upon credit would extend to ANY buyer who has lived in their home for 5 consecutive years, as well as the First Time Home Buyer.

Here is the report from MarketWatch:

 By Robert Schroeder, MarketWatch  

WASHINGTON (MarketWatch) — Senators have struck a deal to extend a popular tax credit for home buyers beyond those buying their first house, Senate Majority Leader Harry Reid’s office said Wednesday.

 Legislators also have agreed to extend the tax credit through the end of April, according to a Reuters report.

An $8,000 credit for first-time home buyers is set to expire at the end of November. Under a compromise reached by senators, the credit would be expanded to those who have lived in their home for five consecutive years, a Reid spokeswoman said.

 The credit for repeat buyers would be $6,500.

 The credit reportedly would be available for individuals making up to $125,000 a year and couples earning up to $225,000 per year, up from the current income limits of $75,000 and $150,000, respectively. Reid wants to attach the tax-credit measure to a bill that would extend unemployment benefits.