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john p
Joined: 10 Mar 2006 Posts: 1820
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Posted: Mon Sep 14, 2009 6:58 pm GMT Post subject: |
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I think this might still be possible in some areas. If everyone pulls back and nobody wants to buy, the only people selling will be the ones that have to sell. If you have a market with desperate sellers (unemployed) as the majority, prices will continue to fall.
I think that the Blue Dog Democrats have a lot of responsibility right now. Imagine that in the wake of last year's credit market meltdown, Obama gives a speech to Wall Street and pays homage to Barney Frank of all people.
Jobs are about future outlooks and if companies have negative outlooks then they are cutting back inventories and therefore they're cutting back jobs. People are scared to death about out of control deficit spending and staggering debt. I was not a Bush fan, never voted for him, but when I look at where the spending grew out of control, it isn't where most of his critics say it is, and these problems are still there.
The overextension of credit made the P/E ratios of many things so far out of whack. I mean if the norm to buy a home is 3 times your salary, areas in California that were spending 7 plus times are still way out of whack. How do you ratchet down incrementally in these types of situations? You need to have a critical mass of stable market sectors where if there are steep discounts, others will show up and take advantage and buy creating a floor. Sure, I think a floor could be created, but if 2010 is a repeat of 09, sure it could go further, especially in areas where the market sectors on the downfall are the primary source of income. |
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john p
Joined: 10 Mar 2006 Posts: 1820
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Posted: Tue Sep 15, 2009 2:03 pm GMT Post subject: |
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http://www.realtor.com/realestateandhomes-detail/274-Hampstead-Way_Marshfield_MA_02050_1111412012
The asking price of this house is like 71% of the assessed value.
Take a look, this isn't an ugly duckling, it is a pretty mainstream colonial for an upper middle class family in a middle class town on the ocean that just had a new commuter rail put in in the last two years. When a place like this has trouble moving, that is saying something. |
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renterstill Guest
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Posted: Tue Sep 15, 2009 3:25 pm GMT Post subject: |
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Mayby because this place is just too big for an average family? With a big place everything is big: maitaince, repairs, taxes, heating/cooling etc. I see SFH of the lower square footage moving much better. I understand they are cheaper, but perphaps people finally turned on the thinking of energy -efficiency, living areas that that will really use every day, rather than empty, unused areas that they use for entertaining on holidays.
Just came back from Europe where housing market is going very dynamically even now, most people buy land and build their own houses. Most projects are small 1000-15000 sf, 3bdr/1-1 1/2 bath, open floor plans, VERY energy efficient: solar, geothermal, and very functional, build with high quality materials that last life-time with enough space that you need and use, no extras, that you need to heat and maitain. |
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john p
Joined: 10 Mar 2006 Posts: 1820
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Posted: Tue Sep 15, 2009 4:14 pm GMT Post subject: |
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You're right in prevailing thinking, but I disagree with prevailing thinking for the primary reason that starter single family homes in metro Boston are typically older homes.
The kitchen and family room in this house is typically bigger in this house than in starter homes. We typically spend most of our time at home in these spaces so I think that is where you want the square footage.
The heating and cooling issue is right provided that the building envelope of the smaller (typically older) home is as efficient as the larger more modern home. Again, because there hasn't been any new starter single family homes built within the 128 Belt since, hell, 1980 because they had so many already built for the GI's in the 1940's, the starter home stock may in fact spend more money on heat than a much larger home because the insulating properties of the older homes were so much worse.
Repairs- I think that older starter homes need more money for repairs than newer homes. I know someone that bought a house in 2005 for $400k, has put in $80k on top of that and his house zillows for $388k. Now the Zillow doesn't include the upgrades, but it gives you a sense of the average house on the market. My feeling is that he should have lowballed a house like this for $500k and he'd have been much better off. |
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john p
Joined: 10 Mar 2006 Posts: 1820
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Posted: Tue Sep 15, 2009 4:15 pm GMT Post subject: |
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Oh, also, if you buy a starter home for $350k, sink another $80k or so, you may be better off just buying the next size up house because not only will you avoid paying for the upgrades and repairs, but you can avoid the transaction costs of moving up later on. |
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balor123
Joined: 08 Mar 2008 Posts: 1204
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Posted: Wed Sep 16, 2009 4:52 am GMT Post subject: |
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john p wrote: | http://www.realtor.com/realestateandhomes-detail/274-Hampstead-Way_Marshfield_MA_02050_1111412012
The asking price of this house is like 71% of the assessed value.
Take a look, this isn't an ugly duckling, it is a pretty mainstream colonial for an upper middle class family in a middle class town on the ocean that just had a new commuter rail put in in the last two years. When a place like this has trouble moving, that is saying something. |
Maybe because people who have $550k to spend don't want to live a 56min drive from Boston? Especially after last year's oil surge. |
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john p
Joined: 10 Mar 2006 Posts: 1820
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Posted: Wed Sep 16, 2009 5:10 am GMT Post subject: |
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What you're talking about is a relatively new phenomenon, in the past, typically people over say 35 weren't into the club scene or didn't want to raise their kids in the City. It would be nice to see this change.
Marshfield has a commuter rail stop at Greenbush Station. You can also take the ferry to Hingham right out of Rowes Wharf.
Anyway my preference would be to get a nice house like this in Marshfield near the ocean with public access to the city than get a very small and tired house in Wellesley. |
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JCK
Joined: 15 Feb 2007 Posts: 559
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Posted: Wed Sep 16, 2009 12:51 pm GMT Post subject: |
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john,
Couple points. Agree 100% with balor; the idea of a spending two hours a day commuting is non-starter for both me and my wife.
The commuter rail only works for those who work downtown and work regular hours. Both my wife and I frequently work later than that, and my wife, who works in Somerville, really couldn't use the commuter rail in any case.
Balor also points out something important as well, which is your pool of buyers. You need to find someone who (a) can pay $550k for house and (b) is willing to live more than what most people consider a reasonable commute to Boston. I think that's a relatively small pool of people, hence the lower prices.
I don't see beach distance as being a dealbreaker. Frankly, you can get to the beach easily on weekends from just about anywhere in the Boston metro area. I'd rather save 10 hours commuting during the week, than worry about an extra hour of (relaxing) driving to the beach on the weekends when you actually go to the beach.
I guess my feeling is that I grew up in the suburban-rural environment that you're describing, and frankly, found it really boring. While I agree that it's a much lower stress existence and a lot quieter, it's not something that I'm seeking out for myself. Then add a really long commute on top of that, and it's a big turn-off. |
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balor123
Joined: 08 Mar 2008 Posts: 1204
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Posted: Thu Sep 17, 2009 12:24 am GMT Post subject: |
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Not to mention that spikes in transportation costs also impact public transportation. I'm not not into the club scene but I like being within driving distance of people and services found in Boston suburbs (which are cities in and around 128 belt IMO). |
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