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GBAR: Boston home values have ‘likely peaked’

 
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Agree, prices likely peaked
This is Boston, prices never go down
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RealEstateCafe



Joined: 11 Dec 2007
Posts: 213
Location: Cambridge, MA

PostPosted: Sat Nov 02, 2019 11:42 pm GMT    Post subject: GBAR: Boston home values have ‘likely peaked’ Reply with quote

Summary of BostonAgentMagazine story entitled, GBAR: Boston home values have ‘likely peaked.' Comments welcome below, on Twitter or over beer / coffee:

1. Median sales price of SF homes = record-high $605K in Sept but 1.7% rise YOY marks 5th month in 2019 w/ less 2 % increase YOY;

2. SF Sales off 32.4% from Aug

3. Condo median dropped 3rd consecutive month, off 4.1% record year ago to $549K

Invite homebuyers to crowdsource insights and share price reductions, seller concessions on Twitter using the hashtag #RETippingPoint.

http://bit.ly/BosRE_LikelyPEAK

If you'd like to correspon privately about timing the market, DM to be added to our peer-to-peer collaboration site on Basecamp.com.
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PostPosted: Mon Nov 04, 2019 4:07 am GMT    Post subject: Re: GBAR: Boston home values have ‘likely peaked’ Reply with quote

RealEstateCafe wrote:
Summary of BostonAgentMagazine story entitled, GBAR: Boston home values have ‘likely peaked.' Comments welcome below, on Twitter or over beer / coffee:

1. Median sales price of SF homes = record-high $605K in Sept but 1.7% rise YOY marks 5th month in 2019 w/ less 2 % increase YOY;

2. SF Sales off 32.4% from Aug

3. Condo median dropped 3rd consecutive month, off 4.1% record year ago to $549K

Invite homebuyers to crowdsource insights and share price reductions, seller concessions on Twitter using the hashtag #RETippingPoint.

http://bit.ly/BosRE_LikelyPEAK

If you'd like to correspon privately about timing the market, DM to be added to our peer-to-peer collaboration site on Basecamp.com.


Home prices always peak from April to June and take a dive in the winter months, but spring of 2020 looks to be another year of price increases because rents are still going up. We really need a recession or rent control to truly tank the housing market.

https://boston.curbed.com/2019/10/31/20942220/boston-apartment-rents-november-2019
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RealEstateCafe



Joined: 11 Dec 2007
Posts: 213
Location: Cambridge, MA

PostPosted: Mon Nov 04, 2019 12:35 pm GMT    Post subject: Reply with quote

Thanks for your comment and link from Curbed Boston. Can we invite readers to address your assertions, not to be adversarial, but to inform homebuying and selling decisoins?

ASSERTION #1. Prices are seasonal, don't mistake the margin movements this Fall with softening overall.

REBUTTAL #1: Agree prices are seasonal and changes month to month are easily documented by graphs. However, the median prices cited by GBAR are Year over Year and inspired this quote:

"These conditions have the realtors association suggesting the once unthinkable: That the Boston-area housing market—so long the domain of ceaseless escalating prices, vicious bidding wars, and often paltry inventory—might be turning in favor of buyers.

'The sellers’ market is likely over, or at least the balance has shifted,' Jim Major, president of the Greater Boston Association of Realtors."

http://bit.ly/CurbCoolBosRE

ASSERTION #2. Rents are still going up so sales prices will likely increase in Spring 2020.

REBUTTAL #2: Rising rents do not increase purchasing power, they deplete it.
Further, the Curbed Boston article you shared ends by suggesting rents may begin to fall in 2020. "Perhaps now that the Boston area’s for-sale market is cooling a bit more tenants will jump into that and free up space in the rental market, thereby bringing rents down."

ASSERTION #3. We really need a recession or rent control to truly tank the housing market.

REBUTTAL #3: The lowest interest rates in three years juiced purchasing power and prices earlier this year, but there's only so much demand you can pull forward. Further, demography is destiny, so watch for more signs the housing market has reached a #RETippingPoint in 2020 as we enter the first phase of the Great Senior Sell-Off:

http://bit.ly/SrSellOff

+ + +

Glad to continue a friendly debate offline over coffee or beer nearly any evening. Working on a series of topics for #REonTap. What would others, particularly potential homebuyers or sellers who fear they may have missed the top of the market -- #PeakRE, like to discuss in a friendly, civil way? Hope the content and tone of what's written above attracts thoughtful responses, here, on Twitter or inside the RealEstateCafe's private discussion room:

http://bit.ly/PeakAt_PeakBosRE
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Bill Wendel
The Real Estate Cafe
Serving a menu of money-saving services since 1995
97a Garden St.
Cambridge, MA 02138
617-661-4046
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PostPosted: Wed Nov 06, 2019 7:26 am GMT    Post subject: Reply with quote

RealEstateCafe wrote:
Thanks for your comment and link from Curbed Boston. Can we invite readers to address your assertions, not to be adversarial, but to inform homebuying and selling decisoins?

ASSERTION #1. Prices are seasonal, don't mistake the margin movements this Fall with softening overall.

REBUTTAL #1: Agree prices are seasonal and changes month to month are easily documented by graphs. However, the median prices cited by GBAR are Year over Year and inspired this quote:

"These conditions have the realtors association suggesting the once unthinkable: That the Boston-area housing market—so long the domain of ceaseless escalating prices, vicious bidding wars, and often paltry inventory—might be turning in favor of buyers.

'The sellers’ market is likely over, or at least the balance has shifted,' Jim Major, president of the Greater Boston Association of Realtors."

http://bit.ly/CurbCoolBosRE

ASSERTION #2. Rents are still going up so sales prices will likely increase in Spring 2020.

REBUTTAL #2: Rising rents do not increase purchasing power, they deplete it.
Further, the Curbed Boston article you shared ends by suggesting rents may begin to fall in 2020. "Perhaps now that the Boston area’s for-sale market is cooling a bit more tenants will jump into that and free up space in the rental market, thereby bringing rents down."

ASSERTION #3. We really need a recession or rent control to truly tank the housing market.

REBUTTAL #3: The lowest interest rates in three years juiced purchasing power and prices earlier this year, but there's only so much demand you can pull forward. Further, demography is destiny, so watch for more signs the housing market has reached a #RETippingPoint in 2020 as we enter the first phase of the Great Senior Sell-Off:

http://bit.ly/SrSellOff

+ + +

Glad to continue a friendly debate offline over coffee or beer nearly any evening. Working on a series of topics for #REonTap. What would others, particularly potential homebuyers or sellers who fear they may have missed the top of the market -- #PeakRE, like to discuss in a friendly, civil way? Hope the content and tone of what's written above attracts thoughtful responses, here, on Twitter or inside the RealEstateCafe's private discussion room:

http://bit.ly/PeakAt_PeakBosRE


#1
The seller's market might be over, but until you see a trend of YOY price decreases, you can't really say the market has turned in favor of buyers.

#2
Rising rents do not increase purchasing power, they deplete it. -- But only for renters who aren't in a position to buy. A few hundred dollars more for rent devastating for the 40% who live paycheck to paycheck, but for a dual income professional pulling in over 200k, it gets to be an incentive to buy.
There's a reason why the 3 highest rents burdened cities are also have the 3 highest home prices.

#3
Mortgage interest rates have a small effect on housing prices. Look at the historical chart of mortgage rates and housing prices. In many cases, rising mortgage rates were accompanied by rising housing prices and falling rates were accompanied by falling housing prices. Interest rates are the same in Boston and Birmingham, but the housing prices are way different.
The most important factors of housing prices are:
1. location
2. location
3. location
4. pool of potential buyers
5. average income of the potential buyers
6. inventory of houses for sale
7. children
8. time of commute to work
9. pets
10. interest rates
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RealEstateCafe



Joined: 11 Dec 2007
Posts: 213
Location: Cambridge, MA

PostPosted: Fri Nov 08, 2019 11:11 pm GMT    Post subject: Reply with quote

Dear Guest, prefer to use real names but glad to respond to your perspective. Before I do, my strong preference is to hear from others, particularly real homebuyers or potential sellers. Two BostonBubble community members have reached out in recent weeks and one suggested meeting again offline for #REonTap -- talking about real estate overbeer.

Last time, we enjoyed an open-ended conversation at Cambridge Common. Would anyone like to suggest other locations, like Aeronaut Brewery in Somerville or specific topics to cover?

As has been the case since 1993, am attending the National Association of Realtor's annual convention (even though I consumer advocate / critic of the industry). But because I make a living as a buyer agent, am trying to participate in as many of these sessions as possible or use insights to help clients save money:

http://bit.ly/NARAnnual_VirtualRETables

Contrary to the Guest bulletpoint #3 below, NAR's chief economist said that falling interest rates magically revived the housing market after it began to cool in 2018, but cautioned that rising interest rates are in the future. Dont believe me, here's a tweet of one of his many, many slides:

https://twitter.com/travisclose/status/1192855720762327041/photo/1

If you'd like to see more of his slides, or review LIVE NOTES from other sessions, please text 617-661-4046 and let's talk about your interest.
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Bill Wendel
The Real Estate Cafe
Serving a menu of money-saving services since 1995
97a Garden St.
Cambridge, MA 02138
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PostPosted: Sun Nov 10, 2019 4:28 am GMT    Post subject: Re: GBAR: Boston home values have ‘likely peaked’ Reply with quote

. We really need a recession or rent control to truly tank the housing market.

https://boston.curbed.com/2019/10/31/20942220/boston-apartment-rents-november-2019[/quote]

Don't count on a recession during an election year. The impending recession has thus far been thwarted by massive government sending ($1 T deficit this year) and lowering of interest rates.
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BostonBuyer?
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PostPosted: Mon Nov 18, 2019 12:54 am GMT    Post subject: DINK holding off in droves Reply with quote

Just a subjective take here but both myself and many other Dual Income No Kids 35-45ish couples in Boston are renting in large numbers and have ZERO plans or interest (no lifelong jobs at corporations anymore!) to buy unless prices significantly correct. Mobility is key in the new economy. All the people I am talking about are professionals with Masters degrees with well over 200K household income per year.

Just my two cents but I and the above people would never buy at these prices even if interest rates go to zero.

Most of us just rent a decent apartment, save the money not spent on interest, tax, insurance, condo fees, maintenance etc. and will re-locate somewhere different at retirement or if things continue to rise disproportionately with incomes.
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RealEstateCafe



Joined: 11 Dec 2007
Posts: 213
Location: Cambridge, MA

PostPosted: Mon Nov 18, 2019 1:35 am GMT    Post subject: Reply with quote

Thanks for your perspective @BostonBuyer? There's merit in what you say and it represents a profound shift in the housing market, as mobility takes precence over ownership -- even as the average tenure of homeownership has now risen to 13 years. My assumption is that those are older owners who located to a "good school" system before their nest emptied. Some may now be parents of adult children are now back home. In fact, new research by the National Association of Realtors (NAR) reveals that the median age of a 1st time buyer is now 33, and that one in four moves from their parent's home or roommate situation into homeownership with family gift money.

Realize that's not the highly-mobile, highly-skilled, double-income, no-kids workforce that energizing the New Economy, but it's a housing market niche nonethelss. How and why those individuals and relatives justify paying ridiculous asking prices is beyond me, but there are still some affordable places in the region.

Your professional peers clearly value mobillity, but NAR found, surprisingly, that "being close to friends and family" is now the #1 reason for moving, not a better job. At some point, perhaps when they decide to have kids, that maybe true of your cohort as well.

Thanks again for sharing!
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Bill Wendel
The Real Estate Cafe
Serving a menu of money-saving services since 1995
97a Garden St.
Cambridge, MA 02138
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RealEstateCafe



Joined: 11 Dec 2007
Posts: 213
Location: Cambridge, MA

PostPosted: Mon Nov 18, 2019 1:43 am GMT    Post subject: Reply with quote

Should have included these links in the comment above, one for would be buyers and one for sellers, or people trying to decide whether to rent or buy:

Buyers increasingly depend on family while sellers rely on agents

https://bostonagentmagazine.com/2019/11/11/buyers-increasingly-depend-family-sellers-rely-agents/

Zillow: How Soon Can I Sell My House After Purchase?
http://bit.ly/zRESellingCosts
_________________
Bill Wendel
The Real Estate Cafe
Serving a menu of money-saving services since 1995
97a Garden St.
Cambridge, MA 02138
617-661-4046
realestatecafe@gmail.com
http://realestatecafe.com/blog
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BostonBuyer
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PostPosted: Tue Nov 19, 2019 2:51 am GMT    Post subject: closer to home Reply with quote

Again subjective, but about 50% of the 35ish-45ish are from another state, many from Canada, and many from another country. Most people in my demo with kids are moving closer to home is for one reason: current or future childcare costs and help from the grandparents. And closer to home almost always is to the suburbs or out of state.

Most 35ish-45ish in the city in my demo plan on one kid max and two is out of the question. Many also want no kids at this point. When there is definite rental parity that is when I would certainly consider buying. The mortgage on my $3000 apartment would be about $4600 a month plus loss of down payment (20%) to "own".

[quote="RealEstateCafe"]Thanks for your perspective @BostonBuyer? There's merit in what you say and it represents a profound shift in the housing market, as mobility takes precence over ownership -- even as the average tenure of homeownership has now risen to 13 years. My assumption is that those are older owners who located to a "good school" system before their nest emptied. Some may now be parents of adult children are now back home. In fact, new research by the National Association of Realtors (NAR) reveals that the median age of a 1st time buyer is now 33, and that one in four moves from their parent's home or roommate situation into homeownership with family gift money.

Realize that's not the highly-mobile, highly-skilled, double-income, no-kids workforce that energizing the New Economy, but it's a housing market niche nonethelss. How and why those individuals and relatives justify paying ridiculous asking prices is beyond me, but there are still some affordable places in the region.

Your professional peers clearly value mobillity, but NAR found, surprisingly, that "being close to friends and family" is now the #1 reason for moving, not a better job. At some point, perhaps when they decide to have kids, that maybe true of your cohort as well.

Thanks again for sharing![/quote]
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RealEstateCafe



Joined: 11 Dec 2007
Posts: 213
Location: Cambridge, MA

PostPosted: Tue Nov 19, 2019 4:08 am GMT    Post subject: Reply with quote

You are so right about the financial headwinds your peers face, regardless of have kid(s) in Boston, which has the highest childcare costs in the nation
https://www.masslive.com/news/2017/02/the_64000_question_what_child.html

Or wherever they may move:
https://www.linkedin.com/feed/news/child-care-in-the-us-isnt-cheap-2308827/

More than daycare, went into an existential tailspin when I learned the $350K is considered the new middle class in Boston and other tech hubs
http://bit.ly/BigCityClass_350K

As predicted by Future Shock in 1970, my sense is that the pace of innovation has normalized measures of success on both coasts that are actually life-denying. In fact, the cost some families pay for childcare exceeds starting salaries in my field (city planning) in the early 1980’s even with a graduate degree from MIT. No wonder cities are becoming childless and the nation is experiencing it's lowest birth rate.

Still, headlines that tout getting by on enviable salaries are not new, so it’s important to assess the shocking number above in a decade long context:

4Q2010 — Down and Out on $250,000 a year
http://bit.ly/DownNOut250K_FT4Q2010

Bill
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Bill Wendel
The Real Estate Cafe
Serving a menu of money-saving services since 1995
97a Garden St.
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BostonBuyer?
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PostPosted: Wed Nov 20, 2019 2:42 am GMT    Post subject: Tech $ into housing Reply with quote

Most people in Tech are under ZERO illusion that their salaries will go on in perpetuity hence the hesitance to buy a condo/house in a hockey stick market where they could easily afford the payment on their current salary/salaries.

38-40 years old and you start to sweat and 50...bye bye. This is pretty much standard at every tech company so if you haven't "got yours" by 45 it can be a very stressful experience.

After the last tech bubble popped many many people over 40 with Masters degrees returned to Community College and became Physical Therapist Assistants etc. and jobs of that nature as they felt unemployable in tech as evidenced by the inability to get a 1st interview anywhere and wanted a job that at least couldn't be outsourced.

Maybe "it's different this time". We shall see!
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bsg61
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PostPosted: Wed Nov 20, 2019 8:16 pm GMT    Post subject: Tech salaries Reply with quote

Interestingly, I recently had a conversation with a 55+ male friend techie who still works in tech around here. He said he's involved in a start up currently thus he's "not making much". I mentioned I had heard of couples working in tech around Boston making close to, above or at 400K and this being one reason why people are buying condos and houses in Cambridge/Somerville etc at prices that have nearly or literally doubled in the last 5-10 years. He scoffed at the notion of these high salaries as the norm, said it isn't true.

From what I've read, 400K for a couple in their 30s-40s both working in tech in Silicon Valley is the norm. Just I thought I'd report what my friend had to say about it.
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PostPosted: Wed Nov 20, 2019 8:18 pm GMT    Post subject: Re: Tech salaries Reply with quote

bsg61 wrote:
Interestingly, I recently had a conversation with a 55+ male friend techie who still works in tech around here. He said he's involved in a start up currently thus he's "not making much". I mentioned I had heard of couples working in tech around Boston making close to, above or at 400K and this being one reason why people are buying condos and houses in Cambridge/Somerville etc at prices that have nearly or literally doubled in the last 5-10 years. He scoffed at the notion of these high salaries as the norm, said it isn't true.

From what I've read, 400K for a couple in their 30s-40s both working in tech in Silicon Valley is the norm. Just I thought I'd report what my friend had to say about it.


Oh and yeah, he had a long period of unemployment after the dot com crash...
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