Archives for June 2015

What’s My Home Worth? – 2015 Edition

Housing Costs

With housing prices climbing and inventory shrinking in most towns, clients who are afraid to make the wrong decision when it comes to real estate ask a lot of questions about where the market is headed…

  • Should I wait until things calm down to buy?
  • When should I sell to get top dollar?
  • Is this a bubble? What if I buy and prices tank in a couple of years?
  • Where is the best place to buy?
  • Should I wait to sell? With prices going up I don’t know where I can buy when I downsize (or upsize)

Back in 2010 Boston Magazine created a table of median prices from the peak of 2005 to 2010 to illustrate that the bottom of the slump hit in 2009.  They also showed the 10 year cycle from 1999 – 2009 to demonstrate how prices normalize over a real estate cycle.

To help answer all the questions clients ask about the market, I have created a new chart by adding the information for median prices today and for 2014.  This chart analyzes the market movement from the 2005 peak to today, from the 2009 slump to today and from 2014 to 2015.  I have also added in a few towns where my clients have bought that were not in the Boston Magazine chart.

To see the full chart, click here – What is My Home Worth Now? – 2015 Edition

 

Highlights

10 years ago we experienced a bubble caused by banks giving loans to nearly anyone with a pulse.. Since then the market has gone through its normal cycle of dipping (hard), then climbing back up.  Of the 180 towns included in this chart, only 5 towns are still in the negative from 2009.  Overall, the median growth since then is 20%.

Who were the big winners?  The increase over 10 years is more important than the largest one year increase because it shows how a neighborhood performs over time.  No surprise that the long haul winners are Back Bay, South End and Cambridge.

Largest One Year Increase

Town 2015 2014 One Year Change
2014 – 2015
–Roxbury Condos $449,950 $305,000 47.52%
– Back Bay Condos $1,150,000 $888,500 29.43%
– Charlestown SF $980,000 $770,000 27.27%

 

Largest 10 Year Increase – Peak to Today

Town 2015 10 Year Change
2005 to 2015
– Back Bay SF $8,500,000 211.93%
– South End SF $2,525,000 104.45%
Cambridge SF $1,362,500 104.12%

 

Largest Increase from 2009 Slump to Today

Town 2015 Change from
Slump (2009)
to Today
­­2009
–Roxbury SF $495,000 263.97% $136,000
–Mattapan Condos $143,500 143.22% $59,000
–Dorchester Condos $343,000 118.12% $157,250

 

So, if prices will continue to go up, why sell?  For all the reasons anyone sells – you need to downsize or upsize, or move away for a job, or sell because of a family change.   A house is not a stock investment.  It is the place where you live your life.  If your life circumstance changes, so should your home. Unless you are moving to a different market, what you are going to buy will be going up at the same or faster rate than what you own now.  Most boomers have visions of moving into the city.  If that is your dream, look at the chart and figure out if the neighborhoods you want to live in are growing at a faster rate than where you live now and you will see that waiting is likely not working in your favor.

Challenged Markets

Beacon Hill is hardly challenged.  Over the 10-year period from 2005 – 2015 the median price of a single-family in Beacon Hill is up 28%.  The numbers swing quite a bit on single-family houses in the high-priced neighborhoods because so few sell and the prices are so high.

The clearly challenged market overall is Hyde Park condos.  Yet even those prices are double what they were in 1999.  Given a long enough period of time, everything comes back up.  From 1999 to 2015, all towns grew in value, the least being 25%.  The most being, no surprise, Back Bay Single Family homes at 524% growth.  The median growth is 80%.

So if there are any renters out there wondering if it makes more sense to buy, if you are sticking around for a while, buying will help you to float upward with the real estate market.  Otherwise, expect the dream of home ownership to drift farther and farther away as real estate prices outstrip your income growth.

Largest One Year Decrease

Town 2015 2014 One Year Change
2014 – 2015
-Hyde Park Condos $156,000 $264,900 -41.11%
Merrimac SF $322,500 $395,000 -18.35%
– Beacon Hill SF $2,552,500 $3,175,000 -19.61%

 

Largest 10 Year Decrease – Peak to Today

Town 2015 10 Year Change
From Peak
(2005) to 2015
2005
-Hyde Park Condos $156,000 -45.64% $287,000
–Mattapan Condos $143,500 -36.22% $225,000
Randolph SF $260,000 -25.71% $350,000

 

Largest Decrease from 2009-2015

Town 2015 Change from
Slump (2009)
to Today
2009
-Hyde Park Condos $156,000 -15.45% $184,500
Halifax $257,693 -7.97% $280,000
North Attleboro $300,500 -6.53% $321,500

When to Buy, When to Sell

As I mentioned, you should sell when your life circumstances drive the need to sell….your house is too big, you need to buy a bigger house, you are getting divorced, or you have a job transfer.  Trying to time it so that you sell just before prices soften is a game you won’t win.  And, unless you are moving away from this area, the rest of the market will rise or dip with the value of your home.

What you should watch out for is rising interest rates.  The higher the rate, the less Buyers can afford, including you as you move from one home to another.  If rates continue to climb, it may be time to make that move.

The chart may help you make your plans.   If,  like most Boomers, you dream of moving into the city, but the neighborhood you want to move into is growing by double digits while your suburban town is not, then your dream is slipping farther and farther away.  If that is the case, you will either need to make a move soon or you may have to expand your vision of where in or around Boston you would live.

I do feel vindicated my prediction last year that East Boston would be the next place to keep an eye on came to fruition.  While East Boston is still affordable, condo prices rose by 20% over the past year.  So I would say if you are unsure if you should buy or sell, or where to move, Contact Me and we can discuss your plans in greater detail.

Michelle J. Lane
MICHELLE J. LANE, Realtor
Century 21 Commonwealth
CELL: 617 584-3904