bostonbubble.com

BelmontRenter · Joined: 29 Dec 2008 Posts: 52

For me, in the towns I follow (Belmont, Newton, Arlington, Winchester) -- not much.

I see mostly listings of 2-families. We rent half of a 2-family right now, and while living this way is not ideal, at the right price it could make sense. But with rents in the below-$2000/month range, buying a 2-family does not make sense. I'm not sure who will buy them . . .

In Newton, I do see a few new listings coming out slightly more aggressive than one might have seen last year, but not by much. This is probably because the inventory in Newton is greater than in other places.

Belmont -- still a dearth of listings below $900K. If spring was going to "pop," it certainly hasn't yet.

I'm starting to think that finding a "bargain" may not happen. Owners are holding on, weathering this out. Unless things get a LOT worse, and the downward slope of the decline increases, prices here may not drop because there are no listings TO drop.

Arlington and Wilmington listings are mostly priced as they were last fall. No signs of aggressive sellers here either.

Do others read this differently?

balor123 · Joined: 08 Mar 2008 Posts: 1204

With all the government support lately (lower mortgage rates, FTHB credit), sellers probably are figuring they don't even have to try now. These are just bandaids that will eventually disappear. You'll just have to wait another few years for that correction and I'm guessing government policy will make it as gradual as possible.

BelmontRenter · Joined: 29 Dec 2008 Posts: 52

With all due respect, while predicting what will happen THIS year is hard enough, now predicting that the "correction" won't happen for "another few years" is pretty much reading tea leaves.

I'm not so sure that "government support" is helping the jumbo market, but I'll be delighted if that's the case. Can you elaborate? Rates certainly are staying flat, if not trending slightly downward these past few weeks.

WestCoastXPlant · Guest

I actually think the FTHC is useless for this market (what's 8K on a 600-700K house?) but the low rates might be helping. From what I was reading it's hard to refi a house that's for sale, so I wonder if what's happening is that folks who were the "need to sell" sellers are instead opting to refi to a low rate/extended term mortgage and sit tight.

I don't know of anything helping the jumbo market, but conforming jumbo limits are still the high ones from 2008, so loans up to mid-500ish should be benefitting nicely from the new govt buyout...It sucks for buyers though because sellers will definitely want to see the effect of this rate...even if it's none they'd have to wait a few months to realize this.

I bet if unemployment rises a good amount things will start changing (IMO unemployment is still fairly low. I mean, the percentage is close to 8% but I think there's a different psychology when you wake up and you can think of at least 2 friends who are out of a job)...whether you're in the mood to buy after that thought is another story Confused

balor123 · Joined: 08 Mar 2008 Posts: 1204

If you put 20% down, then a conforming mortgage is a $520k house. Roll over equity from a previous house and you might get to $600 - $700k. Also, you may be able to stack another loan on top? I don't know if that's considered subprime if you still meet income qualifications and provide 20% down. Anyway, it's not surprising that many houses hover around these values. Government support is coming from buying mortgage backed securities and lowering the prime rate. Without it, the interest rates would be at least 6-6.5%. I agree that FTHB credit doesn't help Boston as much as other cities but it provides a trickle up effect. People buy more houses in cheaper communities which allows people in those communities to move up.

CC · Guest

I found the recent asking prices are higher than I expected. Some of the listing prices are really over priced. I think it's because now is the early spring. Sellers are just testing the water and think they still have 6 months to go. There seems no agreement between sellers and buyers now. The market will not move much.

CC · Guest

BTW, because the trend is still going down. I probably will wait until this fall or next year. It's slow, but you just have to be patient.

GenXer · Joined: 20 Feb 2009 Posts: 703

As far as prices, I think we basically have the answer in front of us. The unemployment in MA may be closer to 9%, which is still nowhere near where it may potentially be given the possibility that this recession lasts longer than anticipated (though nobody can be sure). However, the unemployment in the 'immune' towns is nowhere near THAT. As we have seen, many of these towns are at full employment, plus or minus (i.e. ~4% or so, which is pretty much full employment). It would seem that the financial hits were distributed throughout, and my hypothesis is that most of those people lived closer to downtown (Brookline, etc) near the T or near the commuter rail. We have seen a relatively limited fallout in the tech sector, and there has been no fallout in the defense sector (full employment, lots of new jobs). Medical layoffs are limited, and it seems that the 'dole-out' may help some poorer towns avoid massive layoffs, though the long term effect is questionable - I think in the end no government efforts will prevent what is going to happen.

The prices have fallen somewhat in Newton near where I rent, and I can see that in the fact that 3 new construction luxury townhouses/houses in my area get no visitors at all, none whatsoever, and the zillow says the price keeps falling (way below the asking price at this point). So, I think this recession will take a very long time to unwind. We also have to consider the possibility that prices will never go down as much in some towns, but I think that if unemployment doubles (to at least 15%) there may be a critical number after which an avalanche of selling may occur, though this is the worst case scenario.

BelmontRenter · Joined: 29 Dec 2008 Posts: 52

admin · Posted: Mon Mar 23, 2009 1:29 pm GMT Post subject:

JCK · Joined: 15 Feb 2007 Posts: 559

admin · Posted: Mon Mar 23, 2009 1:42 pm GMT Post subject:

BelmontRenter · Joined: 29 Dec 2008 Posts: 52

JCK · Joined: 15 Feb 2007 Posts: 559

GenXer · Joined: 20 Feb 2009 Posts: 703

Jackpot...now it gets interesting:

http://www.bizjournals.com/boston/stories/2009/03/09/daily19.html?ana=from_rss

Let's see what happens. Those of us renting have plenty of time to watch this show to the end.

Did anybody mention the multi-trillion spending binge, paid for with our own (yet unearned, but already taxed at 90%) money?