Our Market Has Bottomed!

Tuesday, June 16, 2009

The real estate market has been a roller coaster ride downward for the past 6 months but we are finally leveling off in price declines and inventory is selling. The past 5 weeks or so have seen an unprecedented increase in number of properties going under agreement (Pending Sales). I'm not talking about foreclosures or short sales, which have sold in large number during the past year, but summer vacation homes are now selling and even some regular, solid, "family" homes are going under agreement. It means that buyers, who had put their lives on hold for so long after the Wall Street financial collapses, are now getting on with the business of living. People are buying properties that fit their needs--whether bigger or smaller--near the water--or moving to condominiums. We, as a country, are getting used to the "doom" and "gloom" rhetoric and learning to cope with lower expectations, but still moving on with major decisions--like buying a home. There is a $8000 first time buyer tax credit that must be used before December 1, 2009, and mortgage rates, although still low, are beginning to climb with the increase in the cost of oil. With declining inventories, homes will sell in fewer "days on the market," and prices will stabilize. Smart sellers know that they should maintain their homes in excellent condition to sell in this market or they will be passed over or called upon to give credits to the buyer after home inspections. At least our local real estate market is now dynamic -no longer stagnant, and sellers who want and need to sell, will have a chance at a fair deal. Pricing is still key. Don't over-price your home or it will sit, and it will be passed over. Use a professional real estate broker to carefully give you the latest comparables for your neighborhood---not from 3 years ago, but for the past 3 months, if possible.

Interest Rates Are At 4.79%!!!

The Spring Market is set to take off--- fueled by tempting interest rates, a first time Buyer's credit of $8000 and lower housing prices. Would-be buyers who are waiting for the bottom of the market may miss out of truly getting the deal of a life-time if they wait much longer. Inventory of homes is still large enough for there to be a good selection and most economists think that inflation may rear its ugly head by the end of 2009, forcing up the price of new homes, interest rates, and energy. When there were similarly low interest rates in the past---there was little selection, higher housing prices, no seller cooperation in repairing problems with the homes, and never a direct gift from the government of $8000. Prices in Bristol County, MA are down 18% over a year ago--at least the median for all homes sold is down that much. Sellers are also ready to negotiate on price and are willing to make some improvements to the home, if needed.
Working with a trained Buyer's Agent is extremely important for today's Buyers who need to be aware of all the financing options as well as neighborhood information, especially price-declines and foreclosures. Sellers, likewise, need agents who can keep them aware of changing house values as "days on market" increase. Lenders and their loan officers have categorized towns by their declining ratios and are reluctant to lend loans where the foreclosure rates are high and/or where prices are in a sharp decline. The unemployment rate in area towns is also a factor for lenders. (The unemployment rate in the Greater South Coast area is now upwards of 15%---twice the rate for Massachusetts as a whole.) Buyers who are self-employed will find it much more difficult to get financing. An experienced Buyer's Agent will know the local bankers and lenders as well as the sales information, by neighborhood. So, let us help you find a home, find a lender, and not over-pay for your deal of a life-time. Give us a call at 508.996.6562.

Buyers See Value in Today's Market

Housing is more than an investment. It is a basic need. You have to live somewhere. Why not in a place you can call your own? Where you can change the wall color if you want? Where you can have a cat or dog or children? Where you can plant a garden? I, for one, am tired hearing about the merits of renting over owning a home. It seems to me that renting is just throwing your money away down a deep hole. Buyers need to be careful not to overpay in a down housing market, but the advantages of owning your own home still far out weigh paying rent. "Location" and "condition of property" are the two most important variables for selecting a home. Pick out the town and community that you like best--for the quality of life, closeness to work, school system or other criteria you think most important. Then carefully select you home based on location inside the community and look closely at the condition. Have a thorough home inspection and check out the basics--like whether it is connected to public sewer or age of the septic system--what the quality of the drinking water is--town or well. Also, you are well-advised to also check with the local police to find out what the crime activity has been in the neighborhood and take a look at any sex-offenders, nearby. Of course, you would want to know this information even if you were renting in the neighborhood.
President Obama and the congress have enacted a stimulus bill that includes a $8,000 tax credit for first time homebuyers or for others who have not owned a home for the past 3 years. This is a credit---not a deduction---and it does not need to be paid back. Homes must be purchased before December 31, 2009 to qualify and they must be single family homes where the taxpayer will live. If you have a job and good credit, you may qualify for as little as 3% down under the FHA guidelines. Homes will also need to qualify as to being priced fairly in the down market. So, there are great resources to help new buyers--great selection--and more cooperative sellers, than in the past years. If you are considering purchasing a home this year, give us a call to help you with the process, make sure you have access to all the financing options and most importantly---that you are not over-paying. There should be more and more great, new homes coming on the market as the spring months progress. What a great time to buy a home!

Short Sales Are a Sign of the Times

So, What exactly is a short sale? A short sale is the name given to selling a home for less than what is owed on the mortgage(s). The lender(s) have to agree to take less than what is owed them and usually there are lengthy negotiations between the lender and the seller (and his/her attorney) before a short sale can be authorized. The difference between what the house sells for and what is owed the lender is "forgiven" by the lender and the seller can walk away without debt after a short sale. Because many properties were bought during the boom years of 2004 and 2005 at the height of the market with modest down payments, many home owners find themselves "upside down" in their mortgages in today's declining real estate market. These homeowners owe more on their mortgages than they can realistically resell their homes for. To qualify for a short sale, home owners must already be delinquent in paying their mortgage(s) and the lender needs to agree that allowing a short sale is in the interest of the lender instead of the alternative---which is foreclosing on the property. In 2006, when the real estate market first began to decline, lenders were more than happy to let properties foreclose. The lenders had insurance which paid the expenses and they could deal with the number of problem mortgages. However, in 2007 the number of foreclosures doubled and the number doubled once again in 2008. Banks could no longer keep up with the shear number and side effects---broken pipes, missing copper tubing, tall grass, and neighborhood blight--- making foreclosures disturbing to communities and the public in general. The banks were no longer the good guys---they were seen as tricksters, unsavory and dishonest. Short sales became more common and easier to agree to by the banks and attorneys specializing in short sales found their niche in a down market. Short sales are now a way of life for all of us in real estate---even the luxury market. We now most partner with specialists who can negotiate with banks for our clients. Only those specialists with the most experience and patience are successful in reaching the proper people and getting the permissions in a timely fashion. Short sales delay the selling process by 90 days or more. Banks are bought by others and personnel keep changing. We at Olde Dartmouth Sotheby's International Realty have partnered with a short sales specialist, an attorney, who handles short sales for our clients. In addition to sellers, we have buyers who are interested in purchasing homes in a short sale. Clearing the title and getting the required permissions are key.
This process is tedious and the closing period is long and stressful. It really helps to have someone who can reach the lender and get the information needed. Let us help you navigate this path if you have the interest in buying a short sale or if you find that selling "short" is the best answer for you. We will make the process as pleasant and speedy as possible.

Let a Buyer's Agent Help You with your Home Purchase!

It is a great time to buy a home, even if you are concerned about the decline in the stock market and the global financial markets. How else can you personally enjoy an investment while having it provide you with one of life's primary human needs---shelter? (It is not the time for "flipping"---buying homes that need lots of improvements--especially cosmetic in nature--and trying to resell them again at a profit in the near future.) But, with the help of a good buyer's agent, you can find a primary or secondary home that fits your needs, at the price you want to spend, and you can get financing if you have a deposit (10-20%) and good credit. Some local banks and credit unions are virtually unaffected from the Freddie Mac and Fannie Mae losses as they have never resold their mortgage loans to a secondary market. These local institutions have always been conservative in their lending practices and they are still healthy and without major losses. A good buyer's agent will connect you with one of these lenders and will not let you overpay for a home. Not overpaying is key because home values have eroded over the past two years by 10-20%, depending on community, location of property, and its condition. There is good to excellent inventory in most South Coast towns and most sellers are willing to negotiate in price and terms with you. Call us at 508.996.6562 to arrange for a private consultation with one of our dedicated real estate professionals.

Why Sotheby's?

Since the founding of the Sotheby's Auction House in 1744 in London, the Sotheby's name has earned renown as a marketer of the world's most valuable possessions. Sotheby's International Realty began in 1976, in part to serve clients desiring a complete package of estate disposition services, and soon became known for representing extraordinary estates throughout the world. Presently, Sotheby's has 18 auction locations worldwide, each with a real estate desk featuring the inventory of the Sotheby's International Realty network. This network, with 525 offices, in 38 countries, begain in Massachusetts in 2005 and now boasts 26 offices, including Greater Boston, Cape Cod, the South Shore, and the South Coast. Olde Dartmouth Sotheby's International Realty with an office in South Dartmouth was the first independent brokerage to affiliate with the Sotheby's network. The Sotheby's reputation is built as much upon exceptional service to clients as on the notable art, antiques, jewelry and luxury real estate that pass through Sotheby's offices around the world.

Through the Sotheby's network, Sotheby's International Realty, including Olde Dartmouth Sotheby's International Realty, is teamed with marketing leaders like the Wall Street Journal, New York Times, Boston Globe, International Herald Tribune, Previews Magazine, Robb Report, Reside Magazine, Country Life, the Irish Times, and the Financial Times. Our on-line presence is second to none with sothebysrealty.com and locally, oldedartmouthSIR.com.
Olde Dartmouth Sotheby's International Realty listings are showcased on multiple web sites and search engine portals, including: Google, Yahoo, MSN, Ask.com, RealEstateJournal.com, Trulia.com, YahooRealEstate.com, NYTimes.com/RealEstate, GreatHomesandDestinations.com, IHT.com, FrontDoor.com, Openhouse.com, Cyberhomes.com and AOL.com.

Savvy clientele have always understood that owning a portfolio of homes is an essential ingredient toward building strong financial wealth. Home values have on average doubled at least every 10 years and are a sound investment if purchased with the help of a Sotheby's International Realty professional. Contact us on-line at, first name of agent@oldedartmouthSIR.com or visit us in our new Padanaram Village office at 294 Elm Street, South Dartmouth. Our phone number is 508.996.6562

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