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anyone going to partake in the Boston.Com RE chat today?

 
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PostPosted: Thu Sep 14, 2006 12:33 pm GMT    Post subject: anyone going to partake in the Boston.Com RE chat today? Reply with quote

At 11AM with David Wluka, president of the Massachusetts Association of Realtors.
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PostPosted: Thu Sep 14, 2006 4:43 pm GMT    Post subject: Transcript Reply with quote

Here


David_Wluka: Hello, I'm David Wluka, President of the Massachusetts Association of Realtors here to answer your questions.

SEDA: Mr. Wluka, how is the cooling of today's real estate market similar or different from what occurred in the late '80s and early '90s?

David_Wluka: Economic conditions were very different then. There was a lot of speculation in the market and money was free flowing without a great deal of control. The market basically imploded.

David_Wluka: Today's market is quite different, we have relatively cheap money still out there. There has been a steady run up of pricing with a spike over the past three years that is now in a cooling off period. The basics are still strong, however...rates are low, banks are not lending speculatively and supply & demand are slowly returning to balance. Very very different.

considering_selling: I am considering upgrading from a 2BD condo in Somerville (5 min. walk to Red Line) to a more spacious house in the 'burbs. We just had Child #1. As far as you can see, is now a good time to sell or is the market already glutted with condos?

David_Wluka: Every market is unique...all real estate is truly local so you have to look closely around you. Buying and selling decisions are a lifestyle decision. If you feel its time to move, then get the best advice you can...try a Realtor...and see if you can make a move economically by selling your condo at a competitive price and finding something you like to move into. Since there are so many variables in the market place that waiting can often do more harm than not.

Vlady: Mr. Wluka, but isn't it true that the median house price to median household income ratios have gone up ? Doesn't that affect the equation ?

David_Wluka: The fact of the matter is that median house prices have gone up faster than median income, particularly around here. although todaythey are down some 3.5% from their peak in mid 2005. Despite the larger number of homes on the market there remains a "housing crisis" because more than 2/3rds of the houses on the market are priced above what a family with the median household income can afford today. We in fact need more housing in that area, particularly for 1st time buyers who consitute 40% of the market.

Family_Man: Hi Dave - I'm a new dad and my wife and I have been renting because real estate prices have been out of reach, how long do you think it will take sellers to realize that thier houses just aren't worth as much really lower prices to realistic levels? Also when do think will be the best time to buy a new house?

David_Wluka: Actually Sellers are finally beginning to "get it." One of the biggest barriers to sales in the market today is the fact that most buyers have something to sell. As a renter, you have a very powerful advantage. You should carefully define what you can afford and where you'd like to live ...never forget "Location, Location, Location"...and go out and negotiate hard. Given the plentiful inventory and near record low mortgage rates, you should do well

maxfli: Prices have dropped. Do you now see sales increasing as sellers accept the correction?

David_Wluka: Yes

Robert: Mr. Wluka, what is the single most reason the market is cooling off?

David_Wluka: The market ran at an overheated double digit appreciation rate for 3+ years and simply couldn't sustain it forever. Rather than cooling off, it's leveling off and hopefully return to the more stable appreciation rates of the 90's and early 2000's. Remember, even the Patriots couldn't do it more than three years in a row.

CapeCodder: Hello David, the is a new approach to marketing home now via discount brokers or MLS Entry brokers only. In this scenario, a homeowner can pay a realtor a flat fee (about $200) to list their house on MLS. The homeowner then offers a split percentage to any brokers that brings a buyer - typically 2%. What is the perspective of "traditional brokers" when they see these MLS Entry only listings in MLS. Do brokers shy away from selling these homes?

David_Wluka: There have been alternative business models for many years. The fee for services approach is wholly a function of how comfortable a seller is with taking on various portions of the transaction on their own. Some can handle it well and are succesful while others are not. It truly needs to be carefully explored. Sometimes the lesser fee can cost a lot more than the expected savings. National data shows that homes sold with the assistance of a Realtor sell for 16% more than homes sold by their owners. It remains your choice.

Robert: What are "normal prices", how do sellers know when enough is enough, in regards to dropping their prices? Does is have any correlation to appraised value?

David_Wluka: There are no "normal" prices. Pricing is a function of what a willing buyer will pay and what a willing seller will sell for. I'm assuming that you're referring to assessor's data for appraised values. There is little or no correlation across the board between the two. While in most cases appraised values are below "market" value, there are instances of the opposite. Seller motivation is the key to "enough". If they are truly motivated to sell and are willing to go with the results of a current market analysis, their house will sell.

Sellnow: Realtors always say "now is the time to buy." Is there ever a bad time to buy?

David_Wluka: It's a bad time to buy when you're in no position to. Taking on exotic or specialty financing such as interest only and short term adjustables - I refer to them a "toxic" mortgages - are a clear path to disaster to the uneducated. Buying and selling should not be a function of trying to "time the market". You buy or sell when you feel the need to and can do so comfortably.

hsehntr: Hi David. I'm a first time homebuyer - what is your opinion on how to find the best mortgage. Is it better to go with a bank or a mortgage company?

David_Wluka: You should shop around for money just as you do for a car or any other large purchase. Look into the background, stability, service, fees, etc. of all potential lenders whether they are a bank or a mortgage company. There are many programs available to first time buyers through the Mass Housing Financing Agency (masshousing.com) that may be of value to you. If you already have a banking relationship somewhere, try there first.

sold_my_home_in_June: Hello David, How can one predict when the market hits bottom

David_Wluka: You can't. The only way to see the bottom is when you're looking back at it. If you read the actual economic statistics, we appear to be going through a correction of pricing. Prices are continuing to moderate but there are no dramatic drops. Inventory that was at a high of 15 months a few months ago is now at about 10.5 months and appears to be moving towards a balanced market of 7.5 to 8.5 months where there is equilibrium between sellers and buyers.

Maki: Hi David.... we have a 1 bedroom condo in Beacon Hill and would like to put it on the market. A realtor priced it at 305, but we were thinking we could sell it for 350. Should we wait until th emarket gets better?

David_Wluka: If the market analysis indicates the lower number - and you have at least one more opinion of value to back it up, then that's what it's worth today. You can't predict the future. It may go up but so will whatever you're trying to buy. There is danger in putting it on the market if it is overpriced. First, you eliminate an entire population of would be buyers. More important, the listing gets "stale" after being in the market a long time and loses interest. People also see long times on market, particularly in a very desireable location as yours as a sign that something may be wrong with the property.

mark: I would like to pay cash for my next home. I don't want to seller to know that I would be paying cash because he/she might have the impression that I'm willing to pay more. How should I structure an offer ?

David_Wluka: Cash or financing make no difference if you make it clear that you do not need a mortgage contingency in the deal. Simply state that you are financeable and will not make obtaining a mortgage a condition of the purchase. That's as good as cash. Even though you have the cash, you may choose to get a mortgage anyway for tax or other purposes.

bill: Dave I have reading about the market they say it will be at least year or so before we see the true prices and the effect of the so called bubble deflate. What is your take on that ? thank you

David_Wluka: There are no crystal balls. Data also clearly show that there is no bubble. Prices are driven by supply and demand and will be in different stages in different markets across the state. If you're looking, get as much data as possible about trends in that micro market area, but let life circumstances ultimately dictate your decisions.

David_Wluka: This has been a very quick hour. I'm sorry that I couldn't respond to all of the questions. Thank you.
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