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admin
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Joined: 14 Jul 2005
Posts: 1826
Location: Greater Boston
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 Posted: Tue Sep 24, 2013 7:13 pm GMT Post subject: |
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| Anonymous wrote: |
A home in an "immune" town recently listed for $790k, 15000 square foot lot, had not been touched in 50 years... So there are 17 bids, accepted offer at over $1million. Cash offer, and one in which they will tear down the home, put in a new $150sqft build and sell for a 1.5mill in 6 months
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Was it in Brookline? It sounds like one that I tried to go see at an open house but ended up skipping because the owner (estate beneficiary, I'm guessing, based on age and attitude) was obnoxiously rude when I got there (I forget about what exactly - I think they weren't ready to let people in on time and reacted angrily when I asked to see if I had perhaps gotten the time or place wrong). I didn't bother sticking around, but I do know that the place went for way, way over asking.
If it was the same house or even around the same time, note that your anecdote predates the surge in mortgage rates. The surge has been reverting to a small extent since The Fed failed to follow through on it's taper talk. However, if the bulk of the surge sticks (a big if), and especially if rates go up (a bigger if), there are reasons to think that this would affect "cash buyers," perhaps even more so than traditional buyers. Mortgage banking expert Mark Hanson has a blog that has touched on why in various recent posts.
I have been obsessively watching the inventory numbers for the Boston area here:
http://www.deptofnumbers.com/asking-prices/massachusetts/boston/
Inventory has been climbing since the rate surge and continues to climb, even though we are past the typical annual peak. The current inventory number is actually higher than it has been for any month this year, with the exception of May. The surge in rates looks like it is helping to restore a little bit of sanity to the market, but who knows if that will last.
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Guest
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| Posted: Tue Sep 24, 2013 11:48 pm GMT Post subject: |
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| actually it was newton... and it was last week |
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dudeman
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| Posted: Wed Sep 25, 2013 2:27 am GMT Post subject: newton |
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| In well developed upscale town like newton or brookline, buildable land is VERY HARD TO FIND. a 15000 SQ FT piece of land in good location, is well worth that million dollar price tag in current market. I live in newton for a few years now, I see so many ugly houses being tear down and rebuilt here recently. Each new built create a new million dollar plus property on Newton's land. This year's property tax revenue will be so high, I guess the town will have to think of creative ways to 'waste' it. |
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Guest
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| Posted: Fri Oct 25, 2013 8:56 pm GMT Post subject: Re: CDFI - Mass Housing Investment Corp - Just One CDFI |
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| Arlingtonian wrote: | In the year 2000 Mass Housing Invesment Corp - Investment for Banks and other Corporations into New England Real Estate - $562 Million on page 31 of their annual report found here:
www.mhic.com/annualreports/2000%20Annual%20Report.pdf
In 2012 - Mass Housing Investment Corp invested - in New England (lots of Massahusetts ) $1.56 BILLION - just in 2012.
This is just one example of a CDFI - there are others operation in Massahusetts and New England - MHIC is the largest-
You'll be happy to know that the CEO of www.mhic.com (THE NON-PROFIT)
has seen his pay go from $387,000 in 2009 to $494,000 in 2011
Joe is so concerned about the Poor folks -he had to get a $100,000 pay raise - after all who can live on a measly $387,0000 |
There are about 4.5 million people in the Boston metro area. Assume 4 people/housing units and you have 1 million housing units. Assume low income houses are about $300 k each and you get 3 homes/$1 million. So your 41.5 billion buys 4,500 homes, which is less than 5% of all units. Some flood. Sheesh!! Chicken little. |
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Dismayed
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| Posted: Fri Oct 25, 2013 8:57 pm GMT Post subject: No edit |
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| Should read $1.5 billion and not 45.5 billion. |
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admin
Site Admin
Joined: 14 Jul 2005
Posts: 1826
Location: Greater Boston
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| Posted: Fri Oct 25, 2013 9:09 pm GMT Post subject: |
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So your [1.5 billion] buys 4,500 homes, which is less than 5% of all units. Some flood. Sheesh!! Chicken little.
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I'm not familiar with the program in question, but somehow I doubt they are just buying homes outright. I would assume they are subsidizing loans or something equivalent, which would impact far more units (100% of units if you use a very naive model where they hand out 5% down payments). I also believe "Arlingtonian" was using that as one example of a larger set of programs and not saying that particular program on its own constitutes a flood (though I could be wrong).
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admin
Site Admin
Joined: 14 Jul 2005
Posts: 1826
Location: Greater Boston
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| Posted: Fri Oct 25, 2013 9:38 pm GMT Post subject: |
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PS - The $1.56B was also an annual number, whereas only a fraction of units are sold annually. With an average owning period of 7 years, if I recall, that should drop the number of units in your model from 1M down to 143K.
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Arlingtonian
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| Posted: Sat Oct 26, 2013 2:12 am GMT Post subject: Lots of Government Money pumping up Real Estate |
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Two common themes in Real Estate and the Colleges/Universities around Greater Boston is Government Money.
Can anyone name a College or University in Boston area that doesn't have a major construction project under way.
The U-6 Unemployment rate is 13.6 % and is close to its recent high of 14%. All of the major Industry require massive government subsidies and this includes real estate.
In the days of old you had to have 20% down payment in the Bank for Months to be considered a downpayment and your Bank would have keep your loan. Today a loan is made by a Mortgage Broker and sold off to Fannie or Freddie. The US Government is the Mortgage market.
The result is people are borrowing more money and real estate is more expensive for the next generation. |
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