bostonbubble.com

[Guest]

Drove by a house a few times on the way to work and it looked like a flipper might still be at work. So, just out of curiosity i wanted to see what type of a profit he might be looking for in this market.... $220k.
1679 Trapelo rd Waltham
MLS 70712056
Price: 524,900 (redfin)
46 days
Previously Sold 01/22/2008: $320,000 zillow

WTF i know it takes time for the market to correct but how does 40-50k in repairs increase the price of a home that much.

So i looked around the waltham market to see who else might be doing this. I felt waltham was a fairly representative of the metro boston area.



7 Forest Circle
price $674,900
6 days
MLS:70731649
previously Sold 08/30/2007: $440,000 zillow

94 PINE HILL CIR
Waltham
MLS#: 70695352
Price: $498,900 (81 days)
previously Sold 04/27/2007: $329,900


77 FISKE AVE
Waltham
MLS#: 70724777
Price $419,500 (20 days)
previously Sold 01/25/2008: $220,000


And here are some properties where the seller is in touch with reality.

171 PINE HILL CIR
Waltham
Price $459,000
109 days
built 2004
MLS#: 70687768
previoulsy Sold 05/02/2005: $459,000

18 BLOSSOM ST
Waltham
MLS70712399
Price: 509,000 46 days
previously Sold 06/24/2004: $499,900

As a petential buyer, hopefully not waltham, i could not stomach paying a flipper that type of premium for 2 months of "work" and would much rather purchase one with more relaistic expectations... even if comparing apples to apples.

Waltham Demographics:

The median income for a household in the city was $54,010, and the median income for a family was $64,595. Males had a median income of $42,324 versus $33,931 for females. The per capita income for the city was $26,364

[balor123]

I get the same impression. Check out this property:

http://www.trulia.com/property/1053794085-78-Harrington-Rd-Waltham-MA

Bought in 1999 for $374k and now asking $1.19mil, for Waltham. That's an appreciation of about 12.5% compounded yearly. Zillow estimate way below that number. It looks like a nice house though. This house is not alone. I'm seeing the same kind of growth in other properties as well. There is another property built in 2006 sold for $400k and sellers are now asking for $430k and another 2003 for $400k sellers were asking for $500k.

Sales are plummeting but prices are rising for recent construction properties:
http://www.trulia.com/real_estate/Waltham-Massachusetts/

I just toured a new construction property that's listed for $490k where two of the units sold for $465k - $470k only a few months ago. The agent said that market conditions have changed resulting in the price increase. Surprisingly, people are still paying higher rates. Two adjacent units just sold last month for list of $500k. If you look at the mortgages driving these high price sales, though, you won't find any with more than 5% down and of the 2007 sales there are even some that are no money down. Bring on the foreclosures!

In the mean time, these flippers are driving up the cost of comparables making it hard and risky to buy.

[paperboy]

There are flippers at it in Medfield as well although I do not think that flipping was their original intent.
THey bought MLS # 70414721 in August 2007 for $425,000 and did some remodeling.
THey have it listed for $569,999 (70695158) and originally wanted $599,000 for it. I do not think they did $100K in renovations.

This house has been back on the market since October 2007 and it looks like it will stay that way until they make a drastic price reduction.

[guest]

16 ROYAL ST
Waltham, MA 02452
Beds: 4 On Redfin: 1 day
Baths: 2.5
SQ.FT.: 2,304 Lot Size: 3,920 sf
$/SQ.FT.: $251 MLS#: 70740741
Status: New
Last Sale: $450,000 (12/10/2007)
Listing: Coldwell Banker
today $579,000


makes me think there is still a bigg disconnect between sellers and the market

[Guest]

[Guest]

[balor123]

Check out this flipper:
1064 Boylston St

Bought: Dec 26, 2007 for $289k
Now asking: $379k

It's right on route 9 and in that picture there's actually a nice traffic backup right in front of the house.

[guest]

sheck out this one-- absolutley ridiculous.

11 rider terrace
newton, MA 02466

originally sold 08/22/2007: $410,000


Status Active
Price $795,000
Sold Price $0
Date Sold
Type Single Family
Style Cape
Rooms 7
Bedrooms 4
Baths 2 Full, 1 Half
Age (years) 58
MLS# 70737102

So for 385k i am assuming that you get a fulltime butler for the first 3 years because there in no way in hell you can improve a house that much...

nothing in that area is even comparable to that price per sqft. They list it as a million dollar neighborhood but there is not a single house that has sold for that in that area. I hope they go bankrupt

[guest]

there is still a massive disconnect-- and i am not sure it it will ever be bridged--

Those who are forced to sell for various reasons might feel the pinch but this downturn has made the market a lot less liquid.

If a recession does hit.. that will be the lubricant that moves house prices to where they need to be.

85 Simpson Dr
Framingham, MA 01701

Beds: 3 On Redfin: 1 day
Baths: 1.5 Year Built: 1955
SQ.FT.: 1,356 Lot Size: 8,712 sf
$/SQ.FT.: $221 MLS# 70756162
Status: New
Last Sale: $210,500 (09/27/2007)
Listing: 299,000
34 Eaton Rd
Framingham, MA 01701

Beds: 4 On Redfin: 1 day
Baths: 2 Year Built: 1963
SQ.FT.: 2,194 Lot Size: 0.50 a
$/SQ.FT.: $210 MLS# 70756008
Status: New
Last Sale: $320,000 (11/16/2007)
Listing: 459,900

[JCK]

guest,

Are the sellers asking reasonable prices? I'd be less concerned if they got a great deal (e.g., b/c of divorce, bankruptcy, foreclosure) on the property initially.

There's no reason you can't flip in a down market; you just have to be a bit savvier than you do in a rising market.

[john p]

Yes, the drop off in the number of sales leads me to consider that we could be either hitting an inflection point, or price stickiness due to people albeit upside down, are able to sustain their payments. We'll get a localized uptick due to the seasonal rhythm, but if that floor falls out, certain price points might drop further.

I think that affordability is improving, and with pent up demand, the bottom of many price points has been hit. Perception plays a hand in reality, so despite improving financial fundamentals, it might drop beyond the fundamental floor as it overshot it going upward.

People are talking about these plateaus of waves in foreclosures.

http://www.responsiblelending.org/images/monthly-mortgage-rate-resets-credit-suisse.jpg

On the one hand I see lower priced supply improving due to this, but the upper end, holding it's ground and possibly improving. Who knows for the middle, buyers to seller ratios, CPI, local taxes, and mortgage rates will play into that. I think that the FED will be very concerned with this middle group because if there is no price integrity in this middle we have a much more serious problem.

I've been saying think about the internal factors and external factors to fundamental thinking. The lubricant you're talking about are like the straw that break's the camel's back.

[GUEST]

sales as of now are really more or less anecdotal.. so far below typical sales that in no way do they acutately represent the market as a whole... regardless of market economics (any market) there are always outliers that buck the norm... I am not saying that is necesarily the case but there is just not enough evidence.

As for the bottom... i really doubt it.... sticking point yes but even if it is the bottom it will not just shoot back to 15-20% annual increases....

[Paperboy]

When it hits the bottom, rent will be same same as a mortgage and taxes. Until then you are most likely better off renting. (individual situations will vary)

If you can wait till this elevator gets to the bottom floor you will have saved yourself at least 25%, probably more.

Don't be concerned if you stay on the elevator a bit to long, it goes down much faster than it goes up.

[balor123]

Check out these recent sales numbers from Trulia:

http://www.trulia.com/real_estate/Waltham-Massachusetts/

Feb-Apr '03: 99
Feb-Apr '07: 129
Nov '07-Jan '08: 97
Feb-Apr '08: 6

In March one of the real estate agents (who was otherwise pretty nice) had the nerve to tell me that they raised the price of their new construction home by 30k because market conditions had changed!

[john p]

A drop of an additional 25%?

I don't think prices will shoot up for a long time, but I do think it bottoms this year and it remains flat with maybe a very small uptick.

I think the average percentage off of asking will range between 5-8%. This doesn't mean some aggressive people won't get 20%, but it will average between 5-8%. If you take the 16% from the drop of the peak until now, plus the inflation over a few years, that is a huge drop.

Guys 2007's drops were based on an assumption that we were heading into a major recession. If the fear of recession subsides, it will be about affordability, and I think that we are in the strike zone in 08.

Please describe the context you see with an additional 25% drop. Numbers are what sway me, so what do you see in your research?