bostonbubble.com

[barry]

Redfin: 13 listing on zip 02466 (my old neighborhood) in newton ma... this is by no mean high end newton but has some solid areas but generally middle of the road. I know this does not result in sales prices but sellers and sellers agents seem to be opptomistic... and if they sell, well i guess that regardless of the doom and gloom we are never going to see a market correction (even though we will probably see another 4 months of heavy job lossed, going to near 10% in mass.. and I know the numbers are so fuzzy we are probably already there)

Listed: $599,000
Beds: 4 On Redfin: Sign In
Baths: 2.5 Year Built: Sign In
Sq.Ft.: 2,400 Lot Size: 10,050 sf
$/Sq.Ft.: $250 MLS#: 70853876
Status: Active
Last Sale: $597,000 (08/02/2005)
Listing: Katro Real Estate & Services

Listed: $639,000
Beds: 4 On Redfin: Sign In
Baths: 1.5 Year Built: Sign In
Sq.Ft.: 1,868 Lot Size: 5,700 sf
$/Sq.Ft.: $342 MLS#: 70896275
Status: Active
Last Sale: $595,000 (04/19/2006)


Listing 699,000
Beds: 3 On Redfin: Sign In
Baths: 1.5 Year Built: Sign In
Sq.Ft.: 1,854 Lot Size: 0.25 a
$/Sq.Ft.: $377 MLS#: 70896604
Status: Active
Last Sale: $579,000 (08/24/2001)
Listing: Hammond Residential R. E.

Listing 519,000
Beds: 3 On Redfin: Sign In
Baths: 1.5 Year Built: Sign In
Sq.Ft.: 1,260 Lot Size: 5,803 sf
$/Sq.Ft.: $412 MLS#: 70814962
Status: Active
Last Sale: $425,000 (12/12/2006)
Listing: William Raveis R.E. & Home Services

MY favorite-- a real POS

Listing $629,000
Beds: 4 On Redfin: Sign In
Baths: 2.5 Year Built: Sign In
Sq.Ft.: 2,748 Lot Size: 7,669 sf
$/Sq.Ft.: $229 MLS#: 70880002
Status: Active
Last Sale: $604,000 (04/28/2005)
Listing: Creatini Real Estate Associates

listing:232,000
Beds: 1 On Redfin: Sign In
Baths: 1 Year Built: Sign In
Sq.Ft.: 796 Lot Size: -
$/Sq.Ft.: $291 MLS#: 70897552
Status: Active
Last Sale: $212,000 (10/20/2004)
Listing: Realty
and even the condo's

[JCK]

Yup. And the number of listings are down with nothing good coming on the market from what I can tell. This is true in all of the "desirable" towns.

Inventory is down from last year, but sales are down even further. I wonder what's going to trigger the lower prices that many have been predicting for the last 5-6 years?

We aren't having a NYC-style crash here. I've been enjoying the discussion on:

http://www.streeteasy.com/nyc/talk

as a point of comparison. Inventory in NYC is double over last year, with four times as many listings coming on the market each month as being sold. Prices are being slashed, and there's active in-building price competition going on.

Meanwhile, in Boston, things seems frozen by comparison. It may be years before there's significant movement.

[JCK]

Recent sales only seem to happening at bubble-like prices. Most sellers seem able to hold out for their price or pull off the market. I don't think the dynamic will change until there are a significant number of "must sells" vs. the current crop of "would like to sells."

[balor123]

That happens only when unemployment rises and many months pass, to deplete reserves. Remember that unemployment in the immune towns is still rather low, at around 4 - 5%. Many people living in these towns work in the financial sector, which is only around 5.5% thanks to significant government spending.

[GenXer]

My fear is that the banks which get a ton of government money will step in before they let the house prices fall. There is a huge shadow inventory (at least in CA it is a fact), and the banks would rather keep the properties off the market to keep the prices up. So it seems that the government may be successful in keeping the prices supported. Fundamentals say that prices MAY (not 'should') fall further, but again, only in select locales. It seems that there is a massive redistribution of wealth going on, and BECAUSE the money is going to the banks who inflate the prices, this recession may actually get worse for an average person - they will not be buying anything any time soon, hurting the prices further. So while the prices may be supported indefinitely, this does not mean that sales will pick up any time soon. Job losses may mount, and there may come a tipping point when banks try to unload, but I doubt it. Another point: those taking government money will have to lose money on future loans, which will equate into higher interest. But government seems to be successful in keeping the interest rate low, so that may not materialize, as the government is in effect subsidizing the loans. We may be in for a very long recession, as the only sector growing will be the government.

[JCK]

[balor123]

I don't have any data to back this up but it seems like in the immune towns there has been a lot of construction just in the $1 - $5 million range. Those may be plummeting in price but most of us wouldn't notice because we don't follow those houses. There were far fewer cheaper / nicer houses built that we do follow so the supply may be more realistic in that price segment.

[balor123]

[GenXer]

It seems that in aggregate, prices have fallen in Newton. Its just that the sellers haven't realized it yet. Even Zillow, with its limited accuracy is finally showing that prices have fallen (despite the fact that not a lot of houses sell for less than the median, and so if anything, one could expect Zillow to show prices to be steady). I noticed some people pulled their house from the market after a year, and others list their houses close to what they paid for it. Its only a matter of time, especially for those who bought recently. Unless they are multi-millionaires (and most are house rich and asset-poor) they would not be able to afford paying enormous mortgages for a very long time, and this recession will most likely last a long time. So if anything, prices will fall eventually, but it could take many years for prices to fall in places like Newton, as well as nearby towns.

[barry]

Here is my favorite-- was not on redfin but drove by and saw it was still for sale:

440 Wolcott St Auburndale MA 02466
3 beds, 2.5 baths,
2,284 sq ft
1/2 acre
For Sale: $949,000
Sold 06/02/2003: $650,000

Now they have been working on this house inside and out for a while.. did a great job and probably spent a lot (new entry, copper flashing, new roof, new fence, landscaping, painted, and sure they did similar inside) Now they seem to love the neighbor hood and really loved there house... so my question is are they selling to move to a bigger place or are they forced to move? Who knows and I hate to speculate from my outside observations but why else would you move from a place that you just got to where you want it....

[JCK]

[john p]

I would break things down in my mind based on buyer segments and then do it over time.

For instance:

How many couples make $100k, $150k, and $200k plus. Then you can see why the 3.5 times household income creates a sweet spot around the $375k, or Median house price.

Now, think about ten years ago. Take someone who are really close to me. They bought a 4 bed colonial for $230k when their combined salary was about $140k and sold the same house 5 years later for $450k when their combined salary was about $160k. They walked away with $200k in the sale. Guess what happened next? They bought a house for $685k. So lets take the $685k and subtract the $200k they got in the prior sale, that's $485k. Now, they had a down payment on the prior house so their mortgage must have been closer to like $400k. Now, 2.5 times the household income of $160k salary is $400k, so their newer bigger $685k house felt like $400k because of the gains of the prior sale.

Now, guess what happened, the sole earner who was now making $200k loses his job and needs to relocate. Guess what their house is going for on the market? Bought in 2005 for $685k, selling now for $509k. Now although this family is kind of freaking out, they can easily still find a place with their $200k household salary in the mid $500's and still be within the 2.5 of their salary. These people's toes are still tapping, and they can still refinance.

The people that are screwed are the people that were first time buyers in 2003 to 2006. These people are upside down so they can't sell without losing money and they can't refinance because of the LTV.

So, basically there is one generation that is having to feel the brunt of it, those that bought ten years ago are fine because they caught the upswing and can take advantage of refinancing and those that are buying now can take advantage of low prices and low interest rates. So Obama's medicine helps those that really weren't financially hurt by the housing bubble. To me that kind of doesn't make any sense.

[JCK]

[Boston ITer]

[john p]

JCK:

No, not around here, in New Jersey...