Blog :: 02-2021

North of Boston Real Estate Market February 14-20, 2021

We're taking a look at the north of Boston real estate market specifically Middlesex and Essex counties for single-family homes and condominiums during the week of February 14th through the 20th. Last week we had 1,307 homes available on the market just a slight decrease of 1% from the week before.  We had 485 new homes come on the market last week an increase of 11% from the week before. 460 homes went pending last week that is a slight decrease of 2% from the week before and overall 35% of the market did get absorbed through pending listings which again shows it remains a red-hot seller's market.

Now even though some people are saying that this is the best seller's market in our lifetime, there are plenty of people out there that are stuck on the sidelines because buying a home is extremely difficult in today's market. Contingencies simply don't work and even if your home has an accepted offer the likelihood of getting an offer accepted with that contingency is very difficult.  Traditionally there's been two options when buying and selling a home one being able to get financing of buying a home while not needing to sell your current home. Some people simply can't have that option other people sometimes will sell their home first find temporary housing and then move and again for some people that's not an option either.  There is finally a third option where you can buy a home without a contingency and remain in your current home.  If you're considering a move but are concerned about the obstacles out there we can discuss all three.  I can be reached at 617-275-3379.

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    For Sale! 38 Grey Coach Lane, Reading, MA 01867

    Welcome to one of Reading’s most premier locations, Grey Coach Lane! This stately Dutch Colonial proudly sits on a corner lot and offers a layout that is both spacious & practical. The eat-in kitchen is sun-filled with an island for friends to mingle. The generous dining room creates a background ideal for large holiday gatherings. The essential home office is tucked away on the 1st floor.  Anchored by the stone fireplace & with its airy cathedral ceilings, the great room certainly lives up to its name!  Upstairs, the master bedroom comes complete w/ tiled master bath including both jacuzzi tub & shower. Comfortable rec room w/ half bath located in the basement. The walk up attic offers so much potential for additional living space!  Hardwood  throughout, central air & recent updates including a Buderus Boiler. If you're searching for a home to invest in with the ability to personalize & add additional equity, here is your opportunity, with a location that will support it.

    Contact us at 617-275-3379 to learn more about 38 Grey Coach Lane, Reading, MA 01867!

    Click here for details plus a virtual tour of this home!

    See the full video tour below!

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    Community Spotlight The Children's Piazza, Peabody, MA

    Winter with little ones can be tough in the Northeast.  Our Digital Marketing Manager, Liz, recently discovered the perfect indoor play space for her and her little one.  The Children's Piazza is a play cafe located in Peabody, MA.  It's clean, spacious and has a variety of fun rooms, toys and art supplies for a morning or afternoon of play.  Another great feature is the cafe!  Weary-eyed parents and caregivers and purchase coffee and other drinks to sip while their children play.  Their cookies and egg bites are a must try as well!  They also have a fun outdoor area, Liz can't wait to check out this spring!

    The Children's Piazza is offering a $25 gift card to one lucky winner check out our Facebook and Instagram pages for details!

    Watch the video below to learn more about The Children's Piazza in Peabody, MA

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    North of Boston Real Estate Market Update February 2021

    We're taking a look at January of 2021 and comparing it to January of 2020 in the real estate market north of Boston specifically Middlesex and Essex counties for single-family homes, multi-family homes and condominiums.  Right now inventory levels are really low they are down by about 36% compared to last January. The time it's taking homes to sell, days on market, is also down by about 30% compared to last January. The amount of homes sold is up by about 10% from last January and median prices are up by about 7.2%.  For sellers out there that are selling now they're certainly cashing in, with low inventory and high demand, it remains a seller's market. For buyers wondering where they can escape the competition of other buyers, unfortunately we're seeing multiple offer situations in all price points from north of Boston, Middlesex and Essex counties all the way into southern New Hampshire.  If you're thinking about a move over the next 24 months and have questions, feel free to give us a call we'd be happy to give some information we can be reached at 617-275-3379.

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    3 Reasons We're Definitely Not in a Housing Bubble

    3 Reasons Were Definitely Not in a Housing Bubble | MyKCM
     

    Home values appreciated by about ten percent in 2020, and they’re forecast to appreciate by about five percent this year. This has some voicing concern that we may be in another housing bubble like the one we experienced a little over a decade ago. Here are three reasons why this market is totally different.

    1. This time, housing supply is extremely limited

    The price of any market item is determined by supply and demand. If supply is high and demand is low, prices normally decrease. If supply is low and demand is high, prices naturally increase.

    In real estate, supply and demand are measured in “months’ supply of inventory,” which is based on the number of current homes for sale compared to the number of buyers in the market. The normal months’ supply of inventory for the market is about 6 months. Anything above that defines a buyers’ market, indicating prices will soften. Anything below that defines a sellers’ market in which prices normally appreciate.

    Between 2006 and 2008, the months’ supply of inventory increased from just over 5 months to 11 months. The months’ supply was over 7 months in twenty-seven of those thirty-six months, yet home values continued to rise.

    Months’ inventory has been under 5 months for the last 3 years, under 4 for thirteen of the last fourteen months, under 3 for the last six months, and currently stands at 1.9 months – a historic low.

    Remember, if supply is low and demand is high, prices naturally increase.

    2. This time, housing demand is real

    During the housing boom in the mid-2000s, there was what Robert Schiller, a fellow at the Yale School of Management's International Center for Finance, called “irrational exuberance.” The definition of the term is, “unfounded market optimism that lacks a real foundation of fundamental valuation, but instead rests on psychological factors.” Without considering historic market trends, people got caught up in the frenzy and bought houses based on an unrealistic belief that housing values would continue to escalate.

    The mortgage industry fed into this craziness by making mortgage money available to just about anyone, as shown in the Mortgage Credit Availability Index (MCAI) published by the Mortgage Bankers Association. The higher the index, the easier it is to get a mortgage; the lower the index, the more difficult it is to obtain one. Prior to the housing boom, the index stood just below 400. In 2006, the index hit an all-time high of over 868. Again, just about anyone could get a mortgage. Today, the index stands at 122.5, which is well below even the pre-boom level.

    In the current real estate market, demand is real, not fabricated. Millennials, the largest generation in the country, have come of age to marry and have children, which are two major drivers for homeownership. The health crisis is also challenging every household to redefine the meaning of “home” and to re-evaluate whether their current home meets that new definition. This desire to own, coupled with historically low mortgage rates, makes purchasing a home today a strong, sound financial decision. Therefore, today’s demand is very real.

    Remember, if supply is low and demand is high, prices naturally increase.

    3. This time, households have plenty of equity

    Again, during the housing boom, it wasn’t just purchasers who got caught up in the frenzy. Existing homeowners started using their homes like ATM machines. There was a wave of cash-out refinances, which enabled homeowners to leverage the equity in their homes. From 2005 through 2007, Americans pulled out $824 billion dollars in equity. That left many homeowners with little or no equity in their homes at a critical time. As prices began to drop, some homeowners found themselves in a negative equity situation where the mortgage was higher than the value of their home. Many defaulted on their payments, which led to an avalanche of foreclosures.

    Today, the banks and the American people have shown they learned a valuable lesson from the housing crisis a little over a decade ago. Cash-out refinance volume over the last three years was less than a third of what it was compared to the 3 years leading up to the crash.

    This conservative approach has created levels of equity never seen before. According to Census Bureau data, over 38% of owner-occupied housing units are owned ‘free and clear’ (without any mortgage). Also, ATTOM Data Solutions just released their fourth quarter 2020 U.S. Home Equity Report, which revealed:

    “17.8 million residential properties in the United States were considered equity-rich, meaning that the combined estimated amount of loans secured by those properties was 50 percent or less of their estimated market value…The count of equity-rich properties in the fourth quarter of 2020 represented 30.2 percent, or about one in three, of the 59 million mortgaged homes in the United States.”

    If we combine the 38% of homes that are owned free and clear with the 18.7% of all homes that have at least 50% equity (30.2% of the remaining 62% with a mortgage), we realize that 56.7% of all homes in this country have a minimum of 50% equity. That’s significantly better than the equity situation in 2008.

    Bottom Line

    This time, housing supply is at a historic low. Demand is real and rightly motivated. Even if there were to be a drop in prices, homeowners have enough equity to be able to weather a dip in home values. This is nothing like 2008. In fact, it’s the exact opposite.

    North of Boston Real Estate Market Update January 24th-30th

    We're taking a look at the north of Boston real estate market during the week of January 24th through the 30th specifically in  Middlesex and Essex counties for single-family homes and condominiums.  Last week we had 1,376 homes available on the market, very similar to the week before, only a 1% increase. We had 441 homes come on the market last week, an increase of 7% compared to the week before.  494 homes went pending last week, an increase of 17% from the week before. Overall, 36% of the market did get absorbed through pending listings, which shows it remains a very strong seller's market.  To put that into perspective, that was the highest number that we've seen since the seller's market started unfolding as of last year.   For sellers there's very little on the market and buyers are out and looking. If you are considering selling your home this year and wondering if you should wait until the spring the answer is no. Sellers are doing well coming on the market now, before the spring rush. So if you are thinking about a move or are curious as to what your home may be worth give us a call at 617-275-3379.  

     

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      Want to Build Wealth? Buy a Home This Year.

      Want to Build Wealth? Buy a Home This Year. | MyKCM
       

      Every year, households across the country make the decision to rent for another year or take the leap into homeownership. They look at their earnings and savings and then decide what makes the most financial sense. That equation will most likely take into consideration monthly housing costs, tax advantages, and other incremental expenses. Using these measurements, recent studies show that it’s still more affordable to own than rent in most of the country.

      There is, however, another financial advantage to owning a home that’s often forgotten in the analysis – the wealth built through equity when you own a home.

      Odeta Kushi, Deputy Chief Economist for First American, discusses this point in a recent blog post. She explains:

      “Once you include the equity benefit of price appreciation, owning made more financial sense than renting in 48 out of the 50 top markets, with the only exceptions being San Francisco and San Jose, Calif.”

      What has this equity piece meant to homeowners in the past?

      ATTOM Data Solutions, the curator of one of the nation’s premier property databases, just analyzed the typical home-price gain owners nationwide enjoyed when they sold their homes. Here’s a breakdown of their findings:Want to Build Wealth? Buy a Home This Year. | MyKCM

      The typical gain in the sale of the home (equity) has increased significantly over the last five years.

      CoreLogic, another property data curator, also weighed in on the subject. According to their latest Homeowner Equity Insights Report, the average homeowner gained $17,000 in equity in just the last year alone.

      What does the future look like for homeowners when it comes to equity?

      Here are the seven major home price appreciation forecasts for 2021:Want to Build Wealth? Buy a Home This Year. | MyKCM

      The National Association of Realtors (NAR) just reported that today, the median-priced home in the country sells for $309,800. If homes appreciate by 5% this year (the average of the forecasts), the homeowner will increase their wealth by $15,490 in 2021 through increased equity.

      Bottom Line

      As you make your plans for the coming year, be sure to consider the equity benefits of home price appreciation as you weigh the financial advantages of buying over renting. When you do, you may find this is the perfect time to jump into homeownership.