Salem and North Shore Massachusetts Real Estate

Boston among cities set for a real estate rebound

2012-01-23T08:39:00.002-05:00

The New England hub has a low 5.7 percent unemployment rate thanks to the presence of more than 100 universities and colleges in the metro area and a variety of biotech and financial services companies. “Income is well above average. The housing boom was mild, with a 16 percent rise in prices followed by a 10 percent drop. The recession also was mild, with jobs down just 2 percent,” explains Winzer. Clear Capital and Trulia also have positive forecasts for Beantown this year

See the entire article at: San Jose, Boston among cities set for a real estate rebound

The North Shore Massachusetts Real Estate Market in 2012

2012-01-04T14:51:00.000-05:00

Where is real estate going in 2012?

I know everyone gets confused by all the real estate news that you read about almost every day with each report contradicting the other. Each author usually has an ultimate agenda when writing an article. Those who make their living in real estate try to paint a good (or not so bad) picture of the market because they want to encourage people to buy or sell a home. On the other hand the typical reporter working for a newspaper wants to attract viewers to his/her article, and nothing does that better than doom and gloom - bubble bursting, rising foreclosures, etc. When reading these articles, if you are interested in what is happening with your north shore home's value, or want to know if now is a good time to buy in Massachusetts, then ignore all the national statistics. What is happening in Nevada, Michigan or Florida has almost no bearing on the local market here in Massachusetts.
Trulia.com, a leading internet real estate company, has come out with its top five places slated for a quicker recovery. They are Austin, Houston, San Jose, Boston, and Rochester, NY. The Boston area is home to the technology belt with lots of smart, well-educated people. Highly educated, tech-savvy cities tend to push through the recovery quicker than other parts of the country. 2011 brought a stabilization of prices on the north shore, with the average home selling for $386,251, statistically insignificant from the average of $390,794 in 2010. Even though I predict it will be a robust year, watch for stable prices in 2012 as more foreclosures coming on the market, holding down any valuation increases.

Right now we currently have 5.7 months supply of single family homes on the market. A normal market is considered to have 5 to 6 months worth of inventory, so we are approaching something close to "normality". The average days on market (DOM) for sold single family homes last year was 137 days. I would like to see the days on market below 125 before I feel we are back to a normal market. During the last few years the DOM has been between 125 and 140, while during the "Home Rush" of 2000-2005 it was just 71 to 93 days. Back 15 years ago in 1997, which was what could be could a "normal" year, the average DOM was 102 days.

The total number of homes sold, down slightly last year over 2010, will increase as interest rates stay at record lows, unemployment continues to drop and job security increases, and home affordability remains the highest in decades. Buyers will step off the sidelines and into home ownership as consumer confidence returns and realize that owning is now less expensive than renting on the north shore of Massachusetts.

Jim Armstrong

Broker/President

Armstrong Field Real Estate

But MY House is Worth Much More Than That!

2012-01-01T12:46:00.001-05:00

This weekend, on New Years eve, I place an offer on behalf of one of my buyer clients on a property in Lynn. This home is a 3 family in a nice area and has a good size double lot. It also has new heating systems, a newer (7 years old) roof and a garage. The kitchens and baths are outdated, however, and there is quite a bit of cosmetic work that needs to be done in all three units. The 2nd and 3rd floor units also share a heating system and a hot water heater.

This home is listed in the low $300,000's. I looked up what sold within the last 6 months in Lynn for 3 family homes. There were only 3 sales in Lynn that went just above $300,000 - and those were properties that were completely rehabbed with new kitchens & baths. The average 3 family sold for just over $220,000. Now there are many factors that go into determining the market value of a home, so you can't just take the average price and think that this is what the property is worth. After looking at similar properties, I determined that $280,000 was a fair price to offer to the seller. In fact, there had been only 5 three family homes in Lynn that had sold for more. I submitted my buyers' offer along with an explanation to the seller of how we derived at that price, and a list of all three family homes that had sold showing that his asking price was too high.

The seller rejected the offer without even giving us a counter-offer. The listing agent said the the seller wanted to get a offer very close to his asking price. He didn't care what the reality of the market was, and that he had put a lot of work in the house and it was worth much more than what the statistics showed. Needless to say my buyers were put off by this, and didn't want to submit another offer.

Before this property was listed, the seller's agent showed him all the comparable properties, the market stats, and the properties that were currently listed that would be competing for the same buyers. He chose to ignore all that information and the advice of the professional that he hired, and came up with his own list price.

It will be interesting for me to watch this listing, because if it is follows the usual pattern of overpriced listings this property will have its list price drop until it reaches a point where it is in line with (or below) the market. The multifamily market is hot right now, and if a property is priced right it sells in a matter of days. If it is not priced right, it will just sit on the market for months. This particular property had just come on the market last week, and had it been priced right it would have had several showings. My buyers were the only ones to look at it, and that was because the property suited what they were looking for, even if it was overpriced.

I will probably receive a call from the listing agent in the near future asking me if my buyers are still interested in home because they hadn't received any other offers. Unfortunately for the seller, my buyers will probably have already purchased another home.

- Jim Armstrong
Here is a good article on overpricing a home:
http://www.forbes.com/2002/11/22/cx_bs_1122home.html

Barter Your Goods and Services For Marketing and Selling Your Home

2011-12-08T12:26:00.001-05:00

Armstrong Field Real Estate is now a member of New England Trade - a business bartering group that serves New England with affiliations across the United States. What does that mean for you? If you own a business, and want to sell your home or business, we will represent you and market your Massachusetts home (or business) for no cash out of your pocket! You trade your services or goods for it. Now many of us already do some private bartering with other business owners. But if you are an electrician who does a $1,000 job for someone that owns a dog grooming business, well, you probably don't need $1,000 work of dog shampooing and styling. What happens with New England Trade is the $1000 gets credited to your account, which you can then spend with any of their other members - and there are literally thousands of different products and services available. See a sampling here: http://www.newenglandtrade.com/what-can-i-buy/goods-and-services.aspx

What are some the advantages of bartering through a trade group?

You will receive new customers who would not normally do business with you. New England Trade members tend to travel longer distances then your regular customers because they would rather pay in trade credits.
You can buy things that you need for your business - office equipment and service, printing, advertising, bookkeeping, web design, etc. on trade, and save your cash for the utility bills and rent.
Increase your inventory turnover of billing hours.
Fill up your slow times with business you normally wouldn't receive.
Barter credits can be used regionally and nationally.
Take a vacation on Trade (I've been on a cruise to Bermuda and a trip to Jamaica on trade with a previous business)

There are many more advantages. So if you own a business of any kind, and you want to sell your home, call me and I will explain how it works. If you don't want to sell your Massachusetts home or business (at least not now), but would like more information on joining this trade group, contact Tammy Penny at New England Trade at 781-388-9200.

Jim Armstrong
Broker/President
Armstrong Field Inc.

Cell 978-394-6736

Office 978-740-8700

Homes Sell Better in the Winter?

2011-12-07T10:51:00.001-05:00

RedFin Corporation, a Seattle based real estate company, released some statistics on selling a home in the winter versus other times of the year. The data is from approximately 750,000 homes sold over a year across the country, and then analyzed by season. Here are the basics:

Homes listed in the winter sell faster compared to the summer: 46 days versus 55 days.
Homes listed in the winter are more likely to sell at all: 59.2% versus 53.1%
Homes listed in the winter sell closer to their original list price: a drop of 2.7% in winter versus a 5.2% drop in the summer, which is more than $7,000 on a $300,000 home.

Surprised? Most people would be. But the fact is, there are less homes on the market, which means less competition for qualified home buyers. There are less home buyers in the winter, also, but the ones that are looking are the really serious buyers and not just the lookers and nosey neighbors, who we don't want anyway.

The time of year where a home sells the fastest is still the spring, spending 15% less time on the market than the median for the entire year. Winter takes second place in this category, though (over summer and fall), selling 6% faster than the median.

I'm not guaranteeing that your home will sell quicker and for more money than other times of the year... or even at all. There are too many other factors and variables that come into play to make an across-the-board statement like that. What I am saying is that in most cases, winter is NOT a bad time to list and sell your property, and if you want to sell - don't wait until spring!

- Jim Armstrong
Want to talk? Call me at 978-394-6736
Armstrong Field Real Estate

http://blog.redfin.com/boston/2011/12/should_i_wait_until_spring_to_list_my_home_-_boston_edition.html

Real Estate Facts & Figures

2011-12-01T16:24:00.001-05:00

Below are some facts and figures about the current real estate market, and what people think about it.

81% of Americans view real estate as a good investment
78% of Americans feel that housing prices will hold steady or increase over the next 12 months.
It is cheaper to buy/own a home than to rent in 80% of the major markets in the US.
25% of young Americans plan to buy a home in the next two years.
95% of homeowners are happy they decided to buy a home.
First time home buyers comprise 35% of the total home sales.
67% of first-time home buyers said that the real estate market conditions gave them the opportunity to purchase a home sooner than expected.
50% of buyers found a home in a better neighborhood than expected.
61% purchased their home at a price better than expected.
43% received a mortgage interest rate better than expected.
69% of Americans say that now is the best time to buy a home
88% of people search for homes on the internet, and 40% found the home they eventually purchased on the internet.
87% used a real estate agent to buy a home.
For Sale by Owner homes reach a record low, only accounting for 6% of total sales.
The average home seller was in their home for 9 years, and had 16% increase in equity when they sold it.
The median age of a first-time home buyer was 31. The median age of a home seller was 53
60% of first-time home buyers bought because they "just wanted a home of their own".
The median down payment for first-time home buyers was 5%.

This information was compiled from two surveys, including one just released by the National Association of Realtors.

U.S. Pending Home Sales Show Significant Rebound In October

2011-11-30T12:40:00.002-05:00

Pending home sales rose strongly in October and remain above year-ago levels, according to the National Association of Realtors®.

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, surged 10.4 percent to 93.3 in October from 84.5 in September and is 9.2 percent above October 2010 when it stood at 85.5. The data reflects contracts but not closings.

Lawrence Yun, NAR chief economist, said improved contract activity is a hopeful sign. “Home sales have been plodding along at a sub-par level while interest rates are hovering at record lows and there is a pent-up demand from buyers who normally would have entered the market in recent years. We hope this is indicates more buyers are taking advantage of the excellent affordability conditions,” he said.
“Many consumers are recognizing that home buyers in the past two years have had one of the lowest default rates in history. Moreover, continued inventory declines are another healthy sign for the housing market,” Yun added.

The PHSI in the Northeast surged 17.7 percent to 71.3 in October and is 3.4 percent above October 2010. In the Midwest the index jumped 24.1 percent to 88.7 in October and remains 13.2 percent above a year ago. Pending home sales in the South rose 8.6 percent in October to an index of 99.5 and are 9.7 percent higher than October 2010. In the West the index slipped 0.3 percent to 105.5 in October but is 8.1 percent above a year ago.

“Although contract signings are up, not all contracts lead to closings. Many potential home buyers inadvertently hurt their credit scores and chances of getting a mortgage through easily averted actions, such as cancelling an old credit line while taking on a new one,” Yun said. “Such actions could unwittingly prevent buyers from obtaining a mortgage if their credit score is close the margins of qualifying, or they might get a loan but with less favorable terms.”

Plan now for home improvement throughout the year

2011-11-25T19:42:00.001-05:00

(ARA) - If you've finished making your holiday gift list, don't put the pen and paper away just yet. While the holidays take up a lot of attention right now, it's also a great time to look a bit further into the future. With the new year just around the corner, planning for home improvement projects now can help you prioritize and budget.

Spending more time indoors at home might be bringing some potential projects to your attention. Maybe you've noticed fraying carpet under your toes, chipped paint on a window frame or a paint color that feels outdated - whatever needs to be addressed should get marked down on your fix-it list.
Give yourself a deadline for completing the list and then call a household meeting to start prioritizing. One of the most important things you can bring to that meeting is an idea of how much you can afford to spend. Given that the economy is still lagging - and many people are feeling that pull on their pocketbooks - it's wisest to avoid going into debt to accomplish everything you want to do.

Setting a home improvement budget gives you parameters to work within as you weigh the importance of each project on your list. However, you should also come to the table with a reasonable idea of how much it will cost to complete each of the tasks you want to finish.

Armed with your list and your budgetary figures, go through each item, weighing the pros and cons of both doing it now and letting it wait. You'll inevitably have a lot of options, including putting things off and saving more money throughout the year, or investing some money in repairs now and letting your savings grow for midyear projects. Naturally, you'll also need to consider the constraints of weather on your projects - if you want to put on a new deck, you'll have to wait until at least spring. Consider the fact that an outdoor project might feel a lot more necessary when warmer weather arrives than it does now.

Your long-term plans for your home should also come into play. If you're planning on selling anytime soon, consider carefully whether the projects you plan on doing will pay off at sale time. Additionally, if you plan on catching a buyer's eye, take an objective look at what might help you make the sale. If you're working with a Realtor, you might even want to discuss with them the best fix-ups and repairs within your budget.

New Massachusetts Scrap Metal Law Passes House

2011-11-17T13:49:00.001-05:00

A law that will require scrap metal dealers to obtain a photo ID from anyone that sell metal to them has finally passed the House of Representatives today. This bill (and various forms of it) has been back and promoted by Massachusetts Realtors for the last few years because of the rash of copper thefts from vacant, and sometimes occupied, homes across the commonwealth. Many homes have been broken into by lowlifes who cut out all the copper pipes, tearing apart walls and leaving extensive destruction in their wake, including the flooding of the property in some cases. They then sell the copper to scrap metal dealers who give them cash for it. The rise in the price of copper (and scrap metal in general) has lead to a huge increase in this activity. It has gotten so bad that thieves are stealing manhole covers, iron fences, statues, and just about any metal that they can get their grubby hands on.

This law will require the scrap dealers to get a valid photo ID from anyone selling metal, and record their information along with a description of the metal they are selling. They must also hold onto any scrap metal for at least 24 hours before reselling it. It will make it illegal for any private citizen to sell metals that are obviously not household items such as manhole covers, metal bleachers, fire hydrants, etc. Currently someone can sell those items with no questions asked.

See more information on the law and scrap metal problem below:

http://www.malegislature.gov/Bills/187/House/H03723

http://www.salemnews.com/local/x67365945/Bill-aims-to-end-rash-of-metal-thefts

http://boston.cbslocal.com/2011/07/19/coakley-wants-laws-to-track-scrap-metal-sales/

http://www.tauntongazette.com/news/business_news/x2063885724/Massachusetts-scrap-metal-dealers-push-for-tougher-laws-to-deter-thieves

House Prices: Where They Will Be in the Spring

2011-10-31T17:59:00.001-04:00

Many sellers want to wait until the spring before putting their home on the market. This might be for any of several reasons:

They don’t want to be inconvenienced during the holiday season.

They believe that they will see more potential buyers and as a result will get a higher price.

In the northern part of the country, they might not want people walking through the snow and then into their house.

All of the above

In a normal real estate market, this may make sense. However, this market has been anything but normal. This spring will also see some abnormalities. The biggest difference will be the direction prices will take.

In years past, the spring market would favor the seller because increased demand would outpace any increase in supply: the number of houses coming onto the market would not be as great as the number of buyers newly entering the market. In most situations, when demand is greater than supply, prices increase.

The reason this spring will be different is that the supply of homes coming to the market will be dramatically impacted by foreclosure properties being released by the banks. Many believe this increase in inventory will far outweigh buyer demand. In situations where supply is greater than demand, prices decrease.

Will This Actually Happen?

RealtyTrac, in their latest foreclosure report, explained:

“U.S. foreclosure activity has been mired down since October of last year, when the robo-signing controversy sparked a flurry of investigations into lender foreclosure procedures and paperwork. While foreclosure activity in September and the third quarter continued to register well below levels from a year ago, there is evidence that this temporary downward trend is about to change direction, with foreclosure activity slowly beginning to ramp back up.

This will impact prices.

What Do Experts Believe the Impact Will Be?

Here are the pricing projections by several major entities:

Zillow believes we will not see a bottom in prices until the first quarter of 2012.

Standard & Poors thinks prices will drop %5 in the next few months.

JP Morgan Chase believes prices will depreciate 6 to 7% over the next six months.

Barclays says prices will fall 7% by the end of the first quarter of 2012.

Bottom Line

You may pay a hefty price for the convenience of not having your property on the market right now.

Originally posted at the KCM Blog: House Prices: Where They Will Be in the Spring

Selling your home out of season? A great deck makes a difference

2011-10-12T15:25:00.000-04:00

In a perfect world, no one would ever have to face the challenge of trying to sell a house when there's snow on the ground and the trees are bare. In reality, people have to sell and buy homes throughout the year.

While winter may not be the optimum season to showcase your landscaping, there is one improvement you can make that will help you boost your home's outdoor appeal no matter what the season: a deck.

When potential buyers visit your home in winter, they might not be able to envision how green and lovely your backyard will look come spring. But they will be able to see with their own eyes the square footage that a deck adds to the home's living space.

Decks, patios, sunrooms and porches have always been popular with home buyers, but real estate agents say that too often those spaces are neglected or not used to their best advantage. Yet outdoor improvements like a deck can significantly enhance your home's value and appeal. In fact, at the time of resale, a deck will recoup, on average, about 73 percent of the original cost of building it, according to Remodeling Magazine's Cost vs. Value report.

"Anything that adds living space adds value, and the least expensive way to gain space is to build a deck or turn the one you have into an outdoor room by staging it so that it flows seamlessly with the rest of the house," says Mary Beth Harrison of The Harrison Group, a Dallas-based real estate agency. "A great deck can set your home apart from others with the same interior floor plan or square footage, and deck additions typically add value when it comes time to sell."

The cooler temperatures of fall and early winter make the season a great time to add a deck to your home. Or, if you already have a deck, you can enhance its appeal by adding simple touches and accessories.

A bonus space - for example, a tiny deck or rarely used balcony off a master bedroom - can be transformed into a romantic getaway by staging it with cozy, cushioned seating and a raised firepit. You can safeguard your deck and add designer style with Latitudes deck stones, 16-inch interlocking square tiles made of natural slate or granite. Deck stones can provide an effective fire barrier that's an asset under firepits or grills, or when used to create an outdoor kitchen.

Lighting is another way to boost appeal. LED deck lighting kits, like those offered by Deckorators, are both practical and visually appealing. Adding lighting to a deck can be an important safety feature, and also helps create a warm, welcoming mood for evening entertaining.

Another improvement that speaks to both safety and visual appeal are deck railings. Decorative railings with ornate balusters, post cap and postcovers can give virtually any wood or composite lumber deck a distinctive look for a modest investment.

"More than ever before, people look at their decks as outdoor entertainment areas," says Chris Fox of Universal Forest Products, producers of Latitudes Composite decking and Railing and Deckorators, a leader in decking railing systems and deck accessories. "For some, it's a kitchen; for others, a living room. Decks can be party spaces or quiet retreats. With so many different types of deck materials, lighting, rail systems and decorative accents, it's possible to turn a plain deck into a great outdoor space."

"Potential home buyers always react positively to nice decks that look like a great place to hang out," says Harrison. "From a buyer's perspective, if all else is equal, it's true that the home with the best deck wins."

Common credit myths about buying a home

2011-09-04T18:32:00.000-04:00

(ARA) - Whether your annual earnings range well into six figures or are on the more modest end of national salary averages, you know you'll probably need credit to buy a home. While you likely know how important credit is to your home-buying plans, you may not be aware of the truth behind some common credit myths.

Myth: If your bills are paid and you've never defaulted on a loan, mortgage or credit card bill, you don't need to worry about your credit report or credit score.

Truth: Many factors influence your credit score, and payment history is just one of them. When calculating your score, credit bureaus also consider length of credit history, types of credit used and ratio of credit available to credit used. Even if your payment history is good, scoring lower on one of the other factors could lower your overall credit score.

Myth: As long as you know your credit score, you don't need to look at your credit report before applying for a mortgage.

Truth: A lender will certainly look at your credit report, so you should know what's on it before they do. Errors may occur on a credit report, and if there are any negative marks on your credit history you'll want to know about them - and address them - before a lender asks.

Myth: Checking your credit score is a hassle, and it can't really help you manage your credit in the long run.

Truth: Websites like FreeCreditScore.com make it easy to check your credit score. Keep in mind that lenders use a variety of scores when evaluating credit worthiness, and the one you obtain online will vary from what a lender might see. Still, any score can be a valuable educational tool that helps you better understand how lenders view your credit. FreeCreditScore.com's Credit Score Center can help you understand how your score is calculated, which factors impact it and the best time to apply for credit.

Myth: If your credit is not perfect, you won't be able to get a mortgage.

Truth: Lenders are more strict than they've been in the past and a good credit score and report can certainly make you a more appealing prospect to them. However, a score in the lower range doesn't mean you can't get a mortgage at all. But a higher score is likely to net you more options - and better terms.

Myth: When you apply for a mortgage, the lender could share your personal information (including your credit score and history) with other companies.

Truth: The law limits how banks and other financial institutions can use your information and to whom they can disclose it. If you're not sure how a lender may use your information, ask. Depending on the situation, you may be able to limit disclosure of your information.

Home prices and interest rates are still low across the country, making it a good time to buy a house, real estate experts say. Knowing the truth behind some common credit myths - and understanding your own credit history and score - can help you take advantage of the many opportunities still available for home buyers.

Moving with Children? Here Are Some Tips To Make It Go Smoother.

2011-09-01T12:17:00.001-04:00

When adults decide to move, it's often to pursue an exciting opportunity or discover a new place. But for children, moving can be much harder to understand, as often they've only known one place as home.

As you travel through adulthood, the unknown becomes more alluring, but it's because you've been through major life changes before. That's why it's important to take some steps to make this major transition easier on your kids. Here are some tips from the moving experts at Penske truck rental for helping your children adapt to a new place, along with some practical moving advice for families:

* Open a line of honest communication. It can be hard to tell your kids that they'll be moving, but making sure that they know they can talk about how they're feeling about the move is important. Try to keep the conversation positive by telling them about all the fun things they'll be able to do in their new home, but acknowledge that they'll feel some sadness about leaving their old one.

* Help them say goodbye. Organize a going-away party for your children and their friends, and work with the parents of their friends to gather contact information so they can keep in touch after you move.

* Take inventory. Take a minute with each child to go through toys and clothes to see what can be donated. By letting them help with these decisions, you can eliminate any angst that might come if they realize something they wanted was left behind when you get to your new home.

* Pack a first-day box. Have each child pack a box of things that they will want the first day you move into your new home, like favorite toys, books or stuffed animals. Have the movers pack these boxes last so they are the first thing that is unloaded when you arrive. If you are moving a long distance, have each child pack another bag with items to keep them entertained during the trip.

* Form a moving team. Creating roles for your older children so they can help you move can make your move go quickly and smoothly. If possible, arrange for somebody to watch your younger children so you can focus on moving tasks. Hiring movers can also help take some of the pressure off you so you can tend to your children. Your younger children may also be thrilled by the chance to see the moving truck up close, so take the time to show them.

* Help them feel at home. Showing your children new parks and other attractions in your new community will help them feel excited about their new home. Plan ahead to get them enrolled in activities with other children so they can quickly make new friends. However, be sure to explain to them that making new friends takes time, so they aren't discouraged if it doesn't happen for them right away. Communicate with their teachers to see if there's anything special you can do to help your children feel more comfortable at school.

By doing the little things to help your children cope with the tough parts of moving, you'll put them in a position to acclimate themselves to their new home quickly and easily. For more helpful moving tips, visit www.pensketruckrental.com.

July 2011 Pending Home Sales Up Almost 15% Over 2010

2011-09-01T11:15:00.005-04:00

Pending home sales declined in July but remain well above year-ago levels, according to the National Association of Realtors®. All regions show monthly declines except for the West, which continues to show the highest level of sales contract activity.

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, slipped 1.3 percent to 89.7 in July from 90.9 in June but is 14.4 percent above the 78.4 index in July 2010. The data reflects contracts but not closings.

Lawrence Yun, NAR chief economist, said sales activity is underperforming. “The market can easily move into a healthy expansion if mortgage underwriting standards return to normalcy,” he said. “We also need to be mindful that not all sales contracts are leading to closed existing-home sales. Other market frictions need to be addressed, such as assuring that proper comparables are used in appraisal valuations, and streamlining the short sales process.”

The PHSI in the Northeast declined 2.0 percent to 67.5 in July but is 9.7 percent above July 2010. In the Midwest the index slipped 0.8 percent to 79.1 in July but is 18.8 percent above a year ago. Pending home sales in the South fell 4.8 percent to an index of 94.4 but are 9.5 percent higher than July 2010. In the West the index rose 3.6 percent to 110.8 in July and is 20.6 percent above a year ago.

“Looking at pending home sales over a longer span, contract activity over the past three months is fairly comparable to the first three months of the year, and well above the low seen in April,” Yun said. “The underlying factors for improving sales are developing, such as rising rents, record high affordability conditions and investors buying real estate as a future inflation hedge. It is now a question of lending standards and consumers having the necessary confidence to enter the market.”

New Law for Homes Heated by Oil Effective Goes Into Effect September 30th

2011-09-01T10:01:00.000-04:00

A new law requires that by September 30, 2011, owners of one- to four-unit residences that are heated with oil must already have or will need to install an oil safety valve or an oil supply line with a protective sleeve on their heating equipment. Installation of these devices must be performed by a licensed oil burner technician. Technicians are employed by companies that deliver home heating oil, or they are self-employed. It is important to note that heating oil systems installed on or after January 1, 1990 are most likely already in compliance because state fire codes implemented these requirements on new installations at that time.

For those who need to install this equipment, state officials estimate that the typical cost of installing either an oil safety valve or oil supply line with a protective sleeve ranges from $150 to $350 (including labor, parts, and local permit fees). While it is an expense that is not insignificant, the costs to clean up a leak can be thousands of dollars.

It is important for home owners to remember that this rule applies to all home owners, regardless of whether they are selling their home or not. The Massachusetts Department of Environmental Protection (DEP) has an excellent, easy-to-understand document that explains this new rule. The document can be found at www.mass.gov/dep/cleanup/laws/hhsl.htm.

Question About the Costs if Selling a Home

2011-08-11T18:24:00.003-04:00

Question:
If we sell our house for 245K, and we owe 232K, the Realtor's commission is 5%, and then there are closing costs. How do we do this? Do we just show up with our check book to pay any money owed? Will there be money left over for us to have any small profit? What do we expect? Do we need to be prepared to have several thousand dollars in cash?

Answer:
Here are your typical seller costs:

Marketing Fee/Broker Commission (using 5% as an example*)

$12,250

State Transfer/Stamp Taxes ($4.56 per $1000)

$1117

Deed Preparation

$150

Recording Fees (mortgage discharge)

Misc Charges (tracking, Fedex & payoff fee, etc.)

$200

These fees would total $13,792. Subtract this from the selling price and you end up with $231,208 towards paying off your mortgage, so you would have to bring $792 to the closing table to pay off the balance of your mortgage. Typically, you would have to bring a bank or certified check for that amount to the closing.

These numbers are only examples. Your mortgage balance changes daily. This example also does take into consideration any real estate taxes that are due or paid in advance on the date that the property closes, so the amount could be more... or less. The attorney or title company handling the closing will be computing the final numbers, so that it the best person to talk to.

*The 5% commission rate is used as an example only. Each company or office sets its own fee structure. By law, all real estate commissions are negotiable.

Questions About Commissions and Contracts

2011-08-08T11:03:00.000-04:00

Question:
How much does a real estate agent charge for commission? Is there a grace period in the listing agreement in case I change my mind?

Answer:
By law commissions are negotiable. Each agent or company sets their own commission rate, and each one decides how much, if any they will negotiate. With our company it varies by each property. If a seller wants try "try" a higher selling price than we recommend, we charge a higher commission because it is going to take longer to sell the property. The same goes for properties that is going to be a short sale because it is a lot more work for us and takes longer to close. If the property is in a location that sells very quickly, and the seller listens to our expert opinion on listing price, we may consider lowering our commission.

Before you enter into a listing contract, make sure you really want to sell your home and do not just want to "test" the market. There is typically no "grace period" in a listing contract. However, just like other relationships, sometimes you find out it's just not a good match for the long haul. Make sure the agent (and broker/company) gives you an easy out option if you feel the agent is not meeting your expectations so you can move on (and get it in writing). But remember to give the agent you do choose a chance. Just because you don't receive an offer in the first week or month doesn't mean your agent isn't marketing your property correctly. This is a difficult, unpredictable market for even the most seasoned experts.

Good luck. Contact me through Trulia if you have any questions.

Jim Armstrong
Broker/President
Armstrong Field Real Estate

Mortgage Interest Rates Tick Up

2011-08-01T14:49:00.003-04:00

Rates Tick Up

In Freddie Mac's results of its Primary Mortgage Market Survey the 30-year fixed-rate mortgage averaged 4.55% for the week ending July 28, 2011.

That is up from the previous week when it averaged 4.52%. Last year at this time, the 30-year fixed-rate mortgage averaged 4.54%.

Macroeconomic data released this week were a mixed bag. On the positive side, the index of leading indicators in June rose for the 2nd consecutive month. Partly offsetting this, orders for durable goods were weaker than market expectations for the same month.

Mortgage Rates

U.S. averages as of July 28, 2011:
30 yr. fixed:   4.55%
15 yr. fixed:   3.66%
1 yr. adj:        2.95%

Why Do People Actually Buy a Home?

2011-07-19T13:02:00.001-04:00

It seems that every time we talk about real estate today the conversation immediately goes to the financial aspects of buying a home. Where are prices headed? Where are interest rates headed? Should I wait to try and get a ‘better buy’? Should I wait until I can get a ‘steal’?
The odd thing about all these questions is that survey after survey keeps telling us that price is not the reason families actually buy a home. When money is considered at all, it is in light of not paying rent to a landlord. Let’s look at two recent surveys as examples:
National Housing Survey
The top five reasons given in the survey for buying a home, in order, are:
§                      It means having a good place to raise children and provide them with a good education
§                      You have a physical structure where you and your family feel safe
§                      It allows you to have more space for your family
§                      It gives you control of what you do with your living space (renovations and updates)
§                      Paying rent is not a good investment
The Myers Research and Strategic Services Survey
The top five reasons given in the survey for buying a home, in order, are:
§                      Home ownership provides a stable and safe environment for children and other family members
§                      Home ownership means the money you spend on housing goes towards building equity, rather than to a landlord
§                      Home ownership creates the opportunity to pay off a mortgage and own your home by the time you retire
§                      Home ownership creates the opportunity to live in a neighborhood that you enjoy
§                      Home ownership allows you the right to decorate, modify and renovate your home as you see fit
Bottom Line
Price dominates conversation when we talk about buying a home. However, when it comes down to it, we actually buy for the same reasons our parents and grandparents did – we want a better lifestyle for ourselves and our families.
See the original article here: http://kcmblog.com/2011/07/19/why-do-people-actually-buy-a-home/

Housing Trends eNewsletter- Jim Armstrong

2011-06-01T16:04:00.000-04:00

Here is a link to my newsletter with the latest housing trends in Massachusetts. It includes foreclosure information, employment stats, new housing construction, economic indicators and more.

Massachusetts Housing Trends eNewsletter- Jim Armstrong

U.S. real estate prices see slight monthly rise in April | Inman News

2011-06-01T15:10:00.000-04:00

U.S. real estate prices see slight monthly rise in April | Inman News

Foreclosure rate retreats from record high | Inman News

2011-05-20T14:41:00.002-04:00

MBA: Improvement in performance of 2005-07 loans
By Inman News
Inman News™
Date: Thursday, May 19, 2011

The percentage of homeowners with mortgages who were in foreclosure or seriously delinquent fell during the first three months of the year, and improvement in the performance of loans taken out from 2005-07 suggests a sustainable trend, the Mortgage Bankers Association said today in releasing its quarterly National Delinquency Survey.

The serious delinquency rate -- the percentage of loans in foreclosure or delinquent by 90 days or more -- was 8.1 percent during the first quarter, down from 8.6 percent during the last three months of 2010 and 9.54 percent a year ago.
The percentage of mortgages in foreclosure was 4.52 percent, down from a record high of 4.64 percent in the fourth quarter, and the percentage of loans behind by 90 days or more dropped for the fifth consecutive quarter, to 3.58 percent.
"Of particular importance is that the drop in the percentage of loans 90 days or more past due was driven by improving numbers for loans originated between 2005 and 2007," said MBA chief economist Jay Brinkmann, in a statement.
See the rest of the article at:
http://www.trendmls.com/Guest/News/IndustryNewsShowDoc.aspx?InmanId=143436

Even the Naysayers Are Saying To Buy Now!

2011-05-17T12:23:00.001-04:00

Business School professors Eli Beracha ofEast Carolina University and Ken H. Johnson of Florida International Universityhave done extensive research on which makes more sense financially: to rent or own a home. They published, Lessons from Over 30 Years of Buy versus Rent Decisions: Is the American Dream Always Wise? In their paper, the professors do not dispute the social benefits of homeownership:

“Home ownership is touted as the “American Dream”. It is credited with enhancing wealth, increasing civic pride, improving self-esteem, crime prevention, child development, and better educational outcomes, among other benefits. This paper does not dispute any of these claims.”

What the professors were proposing is that homeownership is not a better investment strategy than renting. The first of the two major findings was:

“After setting the holding period to the average American’s tenure in a residence, renting (not buying) proves to be the superior investment strategy over most of the study period… Individuals, on average, were better off in economic terms to have rented for most of the years in the study period. This first result is strongly dependent upon fiscally disciplined individuals that, without fail,reinvest any residual savings from renting.”

Historically, people do not actually reinvest savings “without fail”. Check here for the findings of a recent study from The Joint Center for Housing Studies at Harvard.

The second major finding says it all. According to both professors Beracha and Johnson, NOW IS THE TIME TO BUY!

“(F)undamental drivers now appear to be in place that favor homeownership over renting in the near term future…
The second finding might seem unwise to many given the recent crash in the real estate markets around the country. However, rent-to-price ratios now seem to be in place along with other fundamental drivers that favor ownership over renting.”

They conclude their research paper with this sentence:

“Conditions (historically low mortgage rates and relatively low rent-to-price ratios) now seem in place to favor future purchases.”

Bottom Line

Two researchers set out to prove that homeownership is not a good financial decision. After completing that research, they have determined that now is the time to buy. What more needs to be said?

Even the Naysayers Are Saying To Buy Now!

Qualified Residential Mortgage Harms Home Buyers With Good Credit and Housing Recovery

2011-05-17T11:02:00.003-04:00

In the midst of a very fragile housing recovery, the government is throwing a devastating, unnecessary and very expensive wrench into the American dream. First time homebuyers will have to choose between higher rates today or a 9-14 year delay while they save up the necessary down payment. And 25 million current homeowners would be locked out of lower refinancing rates because they lack the required 25 percent equity in their homes.

High down payment and equity requirements will not have a meaningful impact on default rates. They will, however, require millions of consumers, who are at low risk of default, to either put off buying a home or pay unnecessarily high rates. The government is penalizing responsible consumers, making homeownership more expensive or simply out of reach for millions. Regulators need to develop a final rule that encourages good lending and borrowing without punishing credit-worthy consumers.

As part of the financial reform legislation, Congress designed a clear framework for improving the quality of mortgage lending and restoring private capital to the housing market. To discourage excessive risk taking, Congress required securitizers to retain five percent of the credit risk on loans packaged and sold as mortgage securities. However, because across-the-board risk retention would impose significant costs on responsible, creditworthy borrowers, legislators also created an exemption for “Qualified Residential Mortgages,” defined to include mortgages with product features and sound underwriting standards that have been proven to reduce default.

Unfortunately, regulators have drafted proposed Qualified Residential Mortgage (QRM) rules that upset the important balance contemplated by Congress. Rather than creating a system of penalties to discourage bad lending and incentives for appropriate lending, regulators have developed a rule that is too narrowly drawn. Of particular concern are the provisions of the proposal mandating high down payments. Other aspects of the proposal – such as the proposed debt-to-income ratios and credit standards – will also raise unnecessary barriers for creditworthy borrowers seeking the lower rates and preferred product features of the QRM.

The proposed QRM exemption requires a high down payment – proposed at 20 percent, with even higher levels of minimum equity required for refinancing – despite the fact that Congress considered and rejected establishing high minimum down payments because they are not a significant factor in reducing defaults compared to other underwriting and product features. In fact, the three sponsors of the QRM provision have sent letters to the regulators saying that they intentionally did not include down payment requirements in the QRM.

Requiring down payments of 20 percent or more is deemed by some as “getting back to basics.” However, well-underwritten low down payment home loans have been a significant and safe part of the mortgage finance system for decades. The proposed QRM exemption ignores these data and imposes minimum down payments of 20 percent, and equity requirements for refinancing borrowers of 25 percent or 30 percent.

As a result, responsible consumers who maintain good credit and seek safe loan products will be forced into more expensive mortgages under the terms of the proposed rule simply because they do not have 20 percent or more in down payment or equity. In other words, the proposal unfortunately penalizes qualified, low-risk borrowers. The QRM should be redesigned to align with Congressional intent: encourage sound lending behaviors that reduce future defaults without harming responsible borrowers and lenders.

http://www.realtor.org/topics/qrm/qrm_whitepaper

Massachusetts Home Buyer Workshops in Salem

2011-03-18T12:01:00.000-04:00

Upcoming Free Real Estate Seminars
Information for Buying Real Estate in Massachusetts

Buying Foreclosures and Short Sales

Date: Wednesday, April 13, 2011
Time: 6:00pm - 7:30pm
Location: Armstrong Field Real Estate Office
281 Essex Street (Crombie Street Entrance), Salem, MA
Cost: FREE

With all the homes that have been taken by banks through the foreclosure process, it's the ideal time to find a home that you can purchase at less than market value. Looking to invest in an income producing property or flip a home... there's no better time to do it than now! Hear from the experts in the field about how to find a foreclosed home or short sale, how to make an offer that will assure you will have instant equity, and how to avoid the issues that can come with these properties.

CLICK HERE FOR MORE INFORMATION

Home Buyer Workshop

Date: Wednesday, April 27, 2011
Time: 6:00pm - 7:30pm
Location: Armstrong Field Real Estate Office
281 Essex Street (Crombie Street Entrance), Salem, MA
Cost: FREE

It is the ideal time to buy your first home. Mortgage interest rates are still at historic lows, the price of homes has bottomed out and the inventory of homes is great. Despite what you read in the media, mortgages are available for anyone with half-decent credit. Live the American Dream by becoming a home owner! Find out how you can qualify, how to find the home of your dreams, and how to avoid the pitfalls.

CLICK HERE FOR MORE INFORMATION