Real Estate Information

What exactly is home value?  Some people would say that buying the cheapest home is the best value but that may not be the wisest route to take.  Some buyers have gone against advice and purchased in distant towns with minimal industry just because the price was significantly lower.  However, as the market has downturned, those same areas became foreclosure meccas as people were laid off. 

Home value really is all about the best balance between low price, reasonable taxes and the optimal location.  Most of us cannot "have it all" but we can certainly try to get the best we can for our money.  If a home is structurally sound, well-cared for, in a good location and in a town that has held up to the downturns of the market, a buyer can rest assured that a purchase at a decent price will provide good appreciation within a few years.  This purchase will become a good investment as long as the buyer stays put for at least  3-4 years.

This entry will focus on the typical first time buyer couple who may be searching in the west of Boston suburbs, such as Franklin, Massachusetts for example. Their concerns may be the neighborhood location, tax rates and quality of the schools as well as price affordability.

My advice to a young couple on a tight budget is to focus on the most stable towns regarding appreciation rates and chose the smallest home in the best condition in a good neighborhood.  It does not matter if there is only one bath.  What really matters is that the couple maintain the home, keep the lighting/paint updated so that when it is time to upsize in a few years the sale will be relatively effortless.  It really does not make sense to expand a home when there are many similarly-sized homes in the neighborhood because you will only raise everyone else's valuation.  Many expanded homes seem out of line with the others around them and often do not flow well. It is best to sell when you have outgrown its size and put money into the next purchase.  Of course, any costly roof, window or kitchen improvements will be attractive to the next buyer.

A buyer can be easily enticed by low prices but many other things must be taken into account.  A resale in a few years is likely so a good Buyer agent will always remind a buyer of these important issues.

Please call or email me if you could use guidance as you prepare to search for homes.

Most people know that it is a buyer's market which means the buyer often feels more control over the real estate process than the seller.  There are low interest rates and the Franklin area offers many good homes at reasonable prices to choose from.  Buyers definitely have alot going for them and unfortunately will often not spend too much time thinking about any one house unless it STANDS OUT from the others.

What is a seller to do?  How can a home stand out?  Well, the first and obvious answer is pricing.  The house must be aggressively priced and marketed everywhere possible by the listing agent.  My own marketing includes at least 15 online sites, print ads, mailings, and mass emailing my huge network of agents and buyers weekly.  Well, sorry to digress because I really want to focus on the key to selling when buyers can seem to hold all the cards.  A home must be priced to sell and with the recent depreciating market in mind.  The price cannot be just above what may still be a slight decline in the market.  The comparable homes that sold 6 months ago may not be the price gauge for the present time--the fair market value of your home may now be just below the selling price of 6-9 months ago.

Well price is key of course but almost as important is making the house SHINE above the other competing properties.  When I look at my own home I can walk around inside and out coming up with a list of about 20 things that would need to be done if we were putting the house on the market this spring.  I am not a messy person and our kids may call us neat freaks but anyone needs to tweak their home to give it the best presentation for a quick sale at the highest price.  Every home is different in what is needed for the best look but most homes could use to be made brighter, cleaner and lighter.  When I meet with a seller we walk through the house and carefully note, both outside and in, what needs to be done.  Often hosing and sweeping walkways, inspecting the driveway for ruts or cracks that may need sealing and adding a fresh coat of paint to the front door are the first steps.  Check around the siding for mildew that may need to be hosed off as well.

On the inside, touching up any scuff marks on the walls and fixing any water stain where the kids overflowed the upstairs bathtub onto the kitchen ceiling is crucial.  Any potential problem must be removed from the buyer's mind.  Although you know that it was a tiny overflowed tub leaving a stain that can be easily fixed, the buyer would automatically believe the pipes burst leaving a costly problem that they need to "spend thousands to fix." Believe me, I have seen it happen countless times.  A young buyer who has never been a homeowner does not have a concept of the cost of small repairs and often imagine everything to be complicated and double the likely repair cost!

Back to the concept of brightness, a few of the simple things that can make a big difference is changing light bulbs to a higher wattage, washing all windows and removing heavy drapes.  Once there is a greater level of light the home can be appreciated more.  This is where I need to mention removing excess furnishings from each room.  I can assist you with a plan that is specific to your home and at times I will bring in a professional stager.

Please call if your home sale is not going as you'd like or if you need assistance in preparing for a sale.

So why are the foreclosure rates relatively low in Franklin, Massachusetts as compared to other nearby towns?  Even towns that are only 5-15 minutes away are bogged down by countless short sales and foreclosures.  The answer appears to be related to the close proximity to industry, commuter rail, and highways.  The town has two industrial parks with several successful companies so naturally people go where the jobs are.  As noted in an earlier entry, Franklin has only seen an approximate 10% depreciation rate from 2007-2008 which speaks to the value of homes in the town.  The taxpayers (myself included) will mention that the tax rate did go up slightly while the asessed value went down however we still get alot for our money like newer schools, newer police and fire station, an amazing senior center that for once makes me want to age.  We also have an active community and a great small town feel even though the population is nearing 35,000.

Jay Hummer, Executive Vice President of RE/MAX of New England, summed it up recently. “The foreclosures we saw in 2008 were caused by the sub-prime mortgage crisis.  This year we’re going to see a spike in fixed-rate mortgage foreclosures based on the changed financial circumstances of homeowners,” Hummer said.

Sellers must recognize that buyers are driving the market and should adjust their strategies accordingly, Hummer advised.  The number of foreclosed properties on the market, combined with the drop of net wealth and the effects of layoffs, salary freezes and increases in staples like food and clothing, will keep buyers focused on finding a bargain.  With the inventory high and likely to get higher in the first half of 2009, bargains won’t be difficult to find.

“Sellers have to be realistic in their expectations right from the start, because buyers can afford to be picky.  If buyers don’t think the price is right they’ll move on to the next property very quickly,” Hummer said.

Here is a quick look back one year to see how Franklin, Massachusetts has weathered the economic downturn.  Not bad at all...

(Based on MLS Data)

SINGLE FAMILY HOMES                   2008      2007           Increase/Decrease                                                                                                                   

Well I am so excited to have just heard the news that a new coffeehouse will be opening in March in the downtown of Franklin!  Formerly, Mel Diva's coffeehouse was a big hit with all ages but was forced to close when the old Zeotrope Theater was being torn down to make way for new condos/business.

The town has not had any place where all ages could just stop in to meet with friends, work on a laptop, grab a quick sandwich or drink.  I hear that the new Cafe Dolce is focused on healthy menu choices and wants to hear suggestions from the community regarding what people are looking for in a coffeehouse.  Already the owners plan to have live music and comedy nights on the weekends.

A place like Cafe Dolce is sure to be successful because of its mass appeal--college students, retirees, commuters walking from the train to their car and young mothers will be equally pleased.  I wish them luck and cannot wait to stop in!

The Moody's Economy.com team, headlined by Chief Economist Mark Zandi, has issued a new report titled, Housing in Crisis: When Will Metro Markets Recover? Here's a look at their key findings:

1. House prices will stabilize by the end of this year.

2. The national Case-Shiller house price index will decline by another 11% from the fourth quarter of last year for a total peak-to-trough decline of 36%.

3. By the end of this unprecedented downturn, house prices will have declined by double digits peak to trough in nearly 62% of the nation’s 381 metro areas. In about 10% of metro areas, price declines will exceed 30%.

Of course, this all speaks to the country as a whole, not regions and certainly not neighborhoods.  What happens to the economy in  Wasilla, Alaska or New York City, NY is particular to that area only.  However, overall it does appear that the worst of the housing crisis may be behind us.  In the Franklin, MA area buyers are out and looking to purchase now.  The available inventory of homes is increasing each week and there are great deals even for someone just starting out.  I would say that this area has seen an approximate 15-20% depreciation in home values during the past 1 1/2 years.

Time to find someone else unless you like his ethics and integrity!

I have known of a few people who have been advised to sell their home via "short sale", which means they owe more than the current value of the home, who are thinking that maybe foreclosure is the better option.  Believe me, don't EVER fall into this trap even though things are really, really bad and doing nothing is a real option.  Foreclosure is never the best solution because your home will be taken out from under you, taken by the bank and your credit could take 3-4 years to begin to clear up.  The other downside to foreclosure--there are many--is that the lender can sue you for what you owe and their legal fees. The longer you wait to request a short sale from your bank and the more that you are behind in your payments, the less likely the bank will agree to a short sale.  Don't just sit and wait--yes it is embarrassing and humiliating, especially if you have had good credit to ask for help but it is urgent to make the call to start the process.  Unemployment, illness and other circumstances sometimes happen beyond our control but dealing with things quickly will lessen the blow.  Fortunately, the banks are starting to get faster in processing short sales which allows everyone to move on with life.

The Mortgage Forgiveness Debt Relief Act 0f 2007 that went into effect on January 1st, 2008 essentially eliminates the problem of being expected to pay taxes on the sale amount.  Formerly, the Internal Revenue Service required the difference between the mortgage balance and the amount realized from the short sale to be taxable as income despite the fact that the debtor never saw a dime of it.

Whatever financial situation you are in--especially if you have been advised to short-sell your home, do not go it alone.  You will need the guidance of a real estate agent who specializes in short sales and can provide a lawyer who will negotiate with the bank on your behalf.  Both you and the bank want to move on--but you need to maintain some ability to be able to purchase in the future.  Following a short sale, the legal experts tell us that with steady employment you may be able to buy again within 2 years.

Please call me if you have questions about short sales or need resources.  I have handled many short sales and they definitely happen for a variety of reasons, not necessarily those that could be controlled.

I can be reached by cell phone at 508-369-5131.

Okay, maybe the daffodils are not in bloom and there is another snowstorm in the forecast but a seller can truly capitalize on the buyers that have begun to get back out.  There are six main advantages for a seller to list now (in the winter) instead of waiting until spring:

1. Inventory - In the spring, how many other sellers will end up using the same strategy? They may have been waiting a year or so until the market got better, or just figured it was the best time to list their property. So come March, April and May, there will be that much more competition to potentially compete with. By listing now, you avoid all that potential competition.

2. Motivated buyers - Often, many buyers will just wait until spring to start their search. They will just be starting the process. Believe me - the buyers who are house hunting during the holidays and in the winter are serious and motivated. By listing now, you'll potentially get one of these buyers to write a deal on your property.

3. Mortgage rates- "Rates, rates, rates," as my friend Richard Stabile likes to say. The mortgage rates right now are at three-year lows. The average 30-year mortgage is in the low five-percent range. This is actually causing an uptick in buyer traffic and activity. I think November, December and January will end up being busier months for many agents than July through October 2008, which is an anomaly. By listing now, you'll catch this wave of buyers shopping for houses since mortgage rates are so low.

4. Buyer confidence- Buyer confidence is starting to shift, which is also increasing buyer traffic. Another cause for increased traffic is the $7,500 first-time homebuyer tax credit, which expires in mid-2009. A buyer has to settle on their property before that time-frame. By listing now, you're taking advantage of this trend of increased buyer traffic.

5. Accomplish your goals now - When it's all said and done, wouldn't you rather have your house sold by March or April, and move on with your life rather than just listing your house then? I love it when we accomplish our goals ahead of schedule - it's a great feeling. By listing now, you're positioning yourself to accomplish your goals sooner rather than later.

6. Reverse fear - Not to buy into the media's doom and gloom, but there's always a risk that the housing market could deteriorate more instead of picking up by mid-2009. In addition, the reality of the market getting that much better in a short period of time is remote. I doubt that waiting until spring will yield a sales price that could be higher by 10 percent. In fact, it could even be a little worse if you think the economy is going to deteriorate as the unemployment rate continues to skyrocket. By listing now, you avoid that extra layer of uncertainty.

Well, it seems as if many buyers just woke up from a long winter nap.  Open houses lately bring in 6 or more people and the phone has been ringing--alot.  This is great news since last year's real estate market was rather quiet overall.  The low interest rates and low home prices seem to be prompting buyers to get out and purchase rather than the watch and wait approach of 2008.

On January 27 MAR reported that single-family homes sales were up 3.2 percent in December compared to the same time last year.  While median prices continue to go down, this is the third month in the last four to experience sales increases.  

It is definitely a great time to buy as long as a buyer has sufficient deposit money saved.  The banks are much stricter which should have happened long ago. 

Get out there since great deals are waiting.  Call me if you need help.