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[Kaidran]

So, the wife dragged me to an OH yesterday, mainly because it is the last one we can see before signing another year lease. I thought I'd give you guys a feel for my experience. It was in Newton (dont start!) and was pretty incredible. I was surprised to see it was very busy, there were about 6 other families there when I was there. 5 were Chinese and I later overheard one woman telling the realtor that 228 (the number of the house) was "you will be prosperous" Chinese mythology. I think this skewed the numbers but I dont have anything recent to compare it to.

The house was 1920s and had a nice layout but had obviously been neglected for decades. The current owners had lived there for 15 years. The whole house was sloping very noticeably, though the realtor assured us that the current owners had had a survey done and found that it was early settling, and they had decided not to do anything about it. Paint and wallpaper was peeling off the walls and part of an enclosed basement addition had missing or broken glass panes. The yard was overgrown and the house was being touched by plants on all sides. Given the rotten exterior that I could see, I would not be the least bit surprised to find ants/termites in the places I could not. The family room, or as my wife later described it "piss room" seemed to be a giant litter box. The realtor seems to have successfully convinced the owners to actually vacuum up the litter before showing but the delightful smell remained. The kitchen needed replacing, as did the roof, which showed leaking through in several points in the ceiling. It also had two side by side bathrooms upstairs, which was just weird. One of them needed replacing I think but I was not looking very closely at this point.

So, how much do you think they wanted for this charming "fixer upper"? $450,000 just reduced from half a million. Presumably they think they can do this because it was Newton but it did not even seem to be in a particularly nice part of Newton. To be fair to the realtor she seemed to know it was unlikely that was going to offer that much.

Anyway, my wife and I left laughing.

[Guest]

Yup, that sounds like Newton. My wife and I currently rent in Newton but have decided not to even look for a purchase here. We did however go to an open house yesterday in Holli, NH. If you are unfamiliar, its one of the nicest towns in all of NH, and is located west of Nashua. At the open house we went to, the carpets were thick and filthy, there were cobwebs everywhere, the entire house smelled of pets. It was embarrassing. Oh, and we were the only couple there, and that had been there.

[GenXer]

Let them spend their money. Less for you to worry about. The longer this lasts, the more people will pull the trigger. When time really comes, bargains will be found. I recently drove through Weston, and there are a number of houses for sale. A lot more than I'd think. Probably of the 'old' variety, too. But while people are looking in Newton, they are buying in Waltham (it appears many houses are literally snapped up).

[john p]

Mortgage rates are pretty low and I think that is stimulating the flow, as well as this being the tail end of the Spring Season.

The peak house prices have been seasonally in June, which reflect purchases made in May.

My wife and I got outbid on a couple of houses in the Spring and then in late July we would be the only ones looking at open houses. I think there is a target Spring/Summer selling period which aligns with the school schedule so if you have the flexibility to buy later in the slower months you can take advantage to some degree.

At the $450k price point, I wonder how much one should pay attention to house price versus mortgage rate? I mean if mortgage rates dropped to 4.5% would you pay an extra $50k?

Some of those older homes are built pretty well and have like 10 coats of paint on them by now and the woods are often hardwood. So long as the roof is young, you have positive drainage away from the home (the ground slopes away to direct rain water away from the house), and the windows and walls are insulated and the interior is liveable to your taste, you should be ok, otherwise get an inspector who can also give you an estimate to repair what is wrong so you can negotiate after the inspection and get a sense of comfort with whatever emergency fund you leave available. I know a lot of people that actually live in a home that they can easily afford to give them peace of mind with their savings. Sometimes, however they get into trouble buying a home that needs too many repairs and paying for transaction costs by having to move in a short period...

[Kaidran]

It was just a funny experience and really was only on the cards because it covered the three most likely sites for my company's relocation. It just reminded us that we have a pretty good deal renting. We complain about our kitchen now but it could be a lot worse.

In the past we have generally looked in that price range and seen about $50-100k of work needed. This one stood out because it would be likely closer to $150k, assuming that you dont find anything unexpected. I was just shocked because it is such a huge asset and people let it decay.

I do get the point of older houses often having very good materials and construction. There seems to be so much that inspections do not get a chance to look at though, so it would be nice to have some confidence that it had been treated reasonably well over the years.

[CL]

I tool a brief look at the listing - a couple observations

1) The owners are idiots. It is a short sale. The owner bought it at 1993, at 138.5K, it's currently tax accessed at 413.6K and it's in poor condition, yet it is a short sale?? It means the owner treated the house as an ATM machine.

2) The house, is tax accessed at 413.6K and and the listing price is 450K. So I can see another 10% drop but it probably won't drop much further than that. If it drops below tax accessment (at which point bank probably won't approve the sale), builders will come in and do a gut rehab and flip it for 600K-700K house.

3) Newton is not cheap, esp for a single family house. So for this price range (400K to 600K), if you insist on single family, then Newton is probably not for you. Rent-and-save and hope the market will crash. In any case, Arlington seems to be more realistic.

[Kaidran]

I think you have to wrong listing, my one was not a short sale. Anyway I'm not in any hurry. It seems there a re still plenty of people ahead of me that will pull the trigger earlier and for more money. I will be curious to see what it actually sells for.

[CL]

Kaidran - my apologies for the mistake. I think I found your listing now. I will be curious to see what it sell for too...my guess is if the house is in such poor condition, it will sell at/close to the tax accessed land value, which is around 400K. Anything below that, builder will come in for gut rehab.

And yes 228 is "easy, easy to get rich" in Chinese. Not sure if it's a factor though.

[CC]

I guess Newton is different. The schools make a difference. I went to few OHs, there were all very empty.

[Kaidran]

Since it was mainly Chinese people there and there was the 228 thing. I would be curious to know if it is a "Newton" thing or not. Has anyone else been to any others recently?

[CL]

Re: Chinese thing: It may as well be, though"228" probably is a small factor. Chinese by nature is saver (we have been through too much hell not to be), but willing to spend on housing and education (instead of cars, dining, consumer electronics, etc). Newton fits the bill, specially north of/around mass pike where housing is a tad less expensive but still with good schools. That area of Newton also is racially diverse and have a sizable Asian population which is important for them.

I am Chinese (which also happens to live in Newton on an area that has a lot of Asian). There are 4 houses on my street that were on market, one sold in 1 day to a builder for gut rehab, 1 sold in around 6% discount to listing, another one sold in around 2 weeks at 3% discount. One still on market after 2-3 months (newbuild). All listing prices are fairly reasonable in my opinion.

[Kaidran]

Well it surely looks overpriced to me. Anyway, I only mention it because in the past the OHs I've been to have tended to be Caucasian, Chinese and Indian in about equal proportion. This was the first one I've been to that was almost entirely Chinese. I know it is not statistically relevant but I just found it interesting.

[CL]

Interesting observation - maybe the "228" factor is bigger than I thought (back in Hong Kong, people paid a lot of money to get car license plate that has lucky number like "228").

I too agree the listing price is overpriced (not by a huge amount given the land value, but still overpriced).

[mpr]

[Kaidran]

Based on the amount of work I think needed to go into it I would put it at about 400k to compare to similar fixer uppers. That is assuming nothing was wrong with it structurally that I could not see (other than sloping floors due to settling).

When I made the comment though I was mainly meaning that it was too expensive for me specifically. I've seen a lot of people that would pay a lot more than me and I dont know what is going through their minds at the moment.

I'm looking for houses to tempt me away from renting and so far I'm not really seeing anything.