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Archive for the ‘Housing Market Updates’ Category

National Real Estate Market Update

September 4th, 2019 by Michael Mahoney

National Snapshot: What’s Ahead for Real Estate

The U.S. unemployment rate is at a 50-year low, and consumer confidence remains high. In fact, the University of Michigan’s latest Surveys of Consumers found that Americans have their most positive personal finance outlook since 2003.1

However, if you follow national news, you’ve probably heard speculation that we could be headed toward a recession. Global trade tensions and a slow down in the GDP growth rate has sparked volatility in the stock market, leading to economic uncertainty.

Given these differing signals, you may be wondering: How has the U.S. housing market been impacted? Where is it headed? And more importantly … what does it mean for me?

Mortgage Rates Are Near Historic Lows

In August, Freddie Mac reported that the average 30-year fixed mortgage rate hit its lowest level since November 2016, falling to 3.6%, down a full percentage point from a year earlier.Variable mortgage rates also fell when the Federal Reserve cut interest rates at the end of July for the first time since 2008.3

This was welcome news for many in the real estate industry. Freddie Mac predicts that low interest rates and a robust job market will help the housing market remain strong despite the threat of recession.

“There is a tug of war in the financial markets between weaker business sentiment and consumer sentiment,” said Sam Khater, Freddie Mac’s chief economist. “Business sentiment is declining on negative trade and manufacturing headlines, but consumer sentiment remains buoyed by a strong labor market and low rates that will continue to drive home sales into the fall.”2

See the report on mortgage rates from last week by Freddie Mac

What does it mean for you?

If you’re looking to buy a home, now is a great time to lock in a low mortgage rate. It will shrink your monthly payment and could save you a bundle over the long term. Or if you plan to stay in your current home for a while, consider whether it makes sense to refinance your mortgage at today’s lower rates.

If you would like a referral to a qualified mortgage partner for a  referral, please reach out.

 

 

Prices Continue to Rise at a Modest Pace

According to the S&P CoreLogic Case-Shiller Indices, housing prices continue to rise. But the rate at which prices are rising is slowing down. For May 2019, the National Home Price Index rose by 3.4%, down from 3.5% the previous month.4

Of course, national averages often don’t present the whole picture. Some markets have seen modest declines, while other areas are witnessing double-digit increases. The key differentiating factor in most cases? Housing affordability.5

Since 2012, home prices have increased at about three times the pace of wages, according to National Association of Realtors chief economist Lawrence Yun.6

“Housing unaffordability will hinder sales irrespective of the local job market conditions,” said Yun. “This is evident in the very expensive markets as home prices are either topping off or slightly falling.”5

But what about all this talk of a recession? Will we see housing values plummet like they did in 2008? Economists say no.

If we look at history, the real estate crash experienced during the Great Recession isn’t typical.

The recent Housing and Mortgage Market Review report from Arch Mortgage Insurance provides data to support this. “What we found is that the next recession is likely to be far less severe on the housing market than the last one. It’s not that this time is different; it’s that last time was really different from historic norms.”6

“A large decline in national home prices is unlikely in the next recession,” Arch economists write. “A persistent housing shortage should help cushion home price declines.”6

Real estate is a local business and you need to look at the picture being painted locally. If you are considering a purchase or sale, you will want to drill down to the local market level or even perhaps the neighborhood. National news is one thing, but things vary from neighborhood to neighborhood.

 

What does it mean for you?

If you have the ability and desire to buy a home now, don’t let the threat of a recession hold you in limbo. The market is cyclical, and it will experience ups and downs. But over the long term, real estate has consistently proven to be a good investment.

Now is is amazing time to purchase a home. Rents are at record highs. There are plenty of options in the market where you could work with a good Realtor to negotiate a purchase with a very small down payment and possibly a closing cost credit which would allow you to make a purchase with same amount of money it would take to sign a lease on a rental property.

 

 

 

Starter Inventory Remains Tight While Luxury Market Softens

As we’ve seen in the past, it’s become a tale of two sectors.

The low-end of the market remains highly competitive as buyers compete for affordable housing. A lack of new construction during the last recession led to an undersupply of starter homes. This trend continues—despite growing demand—due to a lack of skilled workers, rising land and material costs, and a slow permitting process in many areas.7

The result? There’s a shortage of homes for sale that Americans can actually afford to buy.

The luxury market, on the other hand, has softened. Economic uncertainty, changes to tax laws, and rising prices have slowed demand. Plus, to recoup their higher costs, builders flocked to this segment—causing an overabundance of supply in some areas.

“If you’re selling an entry level home, you’re probably still looking at a pretty competitive market in most places,” according to Danielle Hale, chief economist at Realtor.com. “But if you’re selling a more expensive home you probably have to adjust your expectations.”8

 

What does it mean for you?

Move-up buyers, you’re in luck! If you’re ready to trade in your starter home for something more luxurious, you may get the best of both sectors. We’re still witnessing strong demand for entry-level homes, giving sellers the upper hand. At the same time, buyers of high-end homes are finding a greater selection (and more negotiating power) than they’ve had in years.

 

Investors Are Buying Homes at Record Levels

There’s one group that hasn’t been slowed down by lack of affordability or economic uncertainty: investors.

According to CoreLogic, investors are purchasing homes at a record pace. In 2018, the share of U.S. homes bought by investors reached 11.3%—the highest level since the company began tracking nearly 20 years ago.9

Notably, this increased activity wasn’t led by institutional investors, but instead by small and individual investors focused on the starter-home segment.Declining interest rates and an uncertain stock market has led investors to flock to real estate as they seek out greater stability and higher returns.

“With declining mortgage rates … they’re searching for a better return for their money,” said NAR chief economist Lawrence Yun.10

 

What does it mean for you?

If you’re looking for a way to “recession proof” your money, you might want to consider investing in real estate. People will always need a place to live, and (unlike the stock market) a rental property can provide a steady source of cash flow during uncertain economic times.

 

We Are Here to Guide You

While national real estate numbers can provide a “big picture” outlook, real estate is local. As local market experts, we can guide you through the ins and outs of our market and the issues most likely to impact sales and home values in your particular neighborhood.

If you have specific questions or would like more information about how market changes could affect you, contact us to schedule a free consultation. We’re here to help you navigate this shifting real estate landscape.

 

 

Sources:

  1. University of Michigan Surveys of Consumers – http://www.sca.isr.umich.edu/
  2. Freddie Mac – https://freddiemac.gcs-web.com/news-releases/news-release-details/mortgage-rates-drop-significantly?_ga=2.29332539.689041222.1565464527-928629548.1565464527
  3. CNN – https://www.cnn.com/2019/07/31/business/fed-rate-cut-july-meeting/index.html
  4. S&P Dow Jones Indices – https://us.spindices.com/documents/indexnews/announcements/20190730-965771/965771_cshomeprice-release-0730.pdf?force_download=true
  5. National Association of Realtors – https://www.nar.realtor/newsroom/metro-home-prices-increase-in-91-of-metro-areas-in-second-quarter-of-2019
  6. Forbes – https://www.forbes.com/sites/alyyale/2019/04/18/with-a-recession-looming-is-now-the-time-to-sell-your-home/#7d3a21665bce
  7. CNN – https://www.cnn.com/2019/08/09/economy/mortgages-home-buyers/index.html
  8. Forbes – https://www.forbes.com/sites/carolinefeeney/2019/07/01/halfway-into-2019-how-is-the-housing-market-holding-up/#7e656e3ec5d8
  9. CoreLogic – https://www.corelogic.com/blog/2019/06/special-report-investor-home-buying.aspx
  10. Fox Business – https://www.foxbusiness.com/economy/investors-snapping-up-homes-at-record-levels

May 2019 Closed Residential Real Estate Sales Massachusetts Association Realtors

July 1st, 2019 by Michael Mahoney

May 2019 Closed Residential Real Estate Sales Massachusetts Association Realtors

WALTHAM, Mass. – June 26, 2019 – The Massachusetts Association of Realtors® (MAR) reported today that median price for both single-family homes and condominiums was over $400,000 in May, with condominiums hitting an all-time high at $413,000. Despite these high median prices, closed sales for single-family homes and condominiums increased year-over-year from May of 2018. Last month marked the lowest number of single-family homes for sale in the month of May since MAR began reporting the data in 2004. However, this is the fifth month in a row of year-over year condominium inventory increases.  Download the full Massachusetts Association of Realtors Closed Sales Report

 

 

 

Emerging Buyer’s Market Lifts Home Sales in May

June 24th, 2019 by Michael Mahoney

Emerging Buyer’s Market Lifts Home Sales in May

May Home Sales Up According to National Association of Realtors

For the first time in two months, existing-home sales rose in May as consumers rushed to take advantage of lower mortgage rates and greater inventory. Total existing-home sales—completed transactions including single-family homes, townhomes, condos, and co-ops—jumped 2.5% month over month in May, reaching a seasonally adjusted annual rate of 5.34 million, the National Association of REALTORS® reported Friday. All four major regions of the U.S. saw an increase in sales last month, led by the Northeast.

“The purchasing power to buy a home has been bolstered by falling mortgage rates, and buyers are responding,” says NAR Chief Economist Lawrence Yun. However, total sales are still down 1.1% compared to a year ago. Read the full article on Realtor Magazine

 

 

April 2019 Sales Report

May 29th, 2019 by Michael Mahoney

April 2019 Sales Report from The Massachusetts Association of Realtors

Want to know what is going on in residential real estate in Greater Boston?

This is the latest closed sales report from the Massachusetts Association of Realtors

The Massachusetts Association of Realtors® (MAR) reported today that closed sales for single-family homes and condominiums increased year-over-year from April of 2018. This month saw a two and a half percent increase in median price for single-family homes and less than a one percent increase in median price for condominiums compared to last year. April also saw the lowest number of single-family homes for sale in the month of April since MAR began reporting the data in 2004. However, this is the fourth month in a row of year-over year condominium inventory increases.

 

Download ►Massachusetts Association of Realtors Closed Sales Report April 2019◄

 

Q1 Residential Real Estate Report Greater Boston

May 25th, 2019 by Michael Mahoney

Q1 Residential Real Estate Report Greater Boston

The results are out. Some towns are up. Some down.
How is your town performing? Download this important report from The Greater Boston Real Estate Board by clicking below

What Do All the Recent Price Reductions Mean to the Real Estate Market?

August 25th, 2018 by Michael Mahoney

What Do All the Recent Price Reductions Mean to the Real Estate Market?

by Michael Mahoney of eXp Realty
617-615-9435 | mike@mmahoney.com

 

Last week, in a new report from Zillow, it was revealed that there has been a rash of price reductions across the country.

According to the report:

  • There are more price cuts now than a year ago in over two-thirds of the nation’s largest metros
  • About 14% of all listings had a price cut in June
  • Since the beginning of the year, the share of listings with a price cut increased 1.2%
  • This is the greatest January-to-June increase ever reported, and more than double the January-to-June increase last year

Senior Economist Aaron Terrazas from Zillow further explained:

“A rising share of on-market listings are seeing price cuts, though these price cuts are concentrated at the most expensive price-points and primarily in markets that have seen outsized price gains in recent years.”

 

Price Reductions and the Boston real estate market…

If you are planning to sell your home, you want to price the money at the market price. You do not want to price the property above the market price and hope that someone will come in and overpay.

Many homeowners think that pricing their homes a little OVER market value will leave them with room for negotiation when, in actuality, it just dramatically lessens the demand for their houses.

Instead of the seller trying to ‘win’ the negotiation with one buyer, they should price their house so that demand for the home is maximized. By doing so, the seller will not be fighting with a buyer over the price but will instead have multiple buyers fighting with each other over the house.

Sellers should be more conservative when it comes to the price at which they list their homes – especially sellers in the upper end of each market.

Bottomline…

Sellers have been listing their homes at inflated prices hoping a super-hot market will deliver a buyer willing to pay virtually any price to ensure they don’t lose the house. That strategy has worked somewhat successfully over the last two years. However, the time that strategy would have worked may have passed.

 

The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Realtor Michael Mahoney does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any real estate investment decision. Michael Mahoney will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.

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This is the second property I have sold in Weymouth MA with Mike as my broker. He research the area and give you all the information you need to decide what to list your property for, so it sells timely. He also helps review and negotiate all offers and is... (more)

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