How is COVID-19 Changing Real Estate?


How Homes are Shown


1. Mayor Walsh has asked that agents not show apartments occupied by tenants. This will certainly delay renters’ ability to find a new apartment.

2.Gov. Charlie Baker’s March 15 ban on gatherings of more than 25 people in Massachusetts affects open houses for residential properties. Many agents have made the decision to hold open houses – there are a total of 760 Open Houses scheduled for this weekend in the Greater Boston area. In some far-flung towns, the odds they will have 25 people in at once are non-existent. In areas where a large number of attendees is a possibility, some agents are having Open Houses by appointment only, meaning you will have to make an appointment during that 2-hour window. They will only allow people in during the window of their appointment. This is more efficient for the Seller as the house would only have to be disinfected once after the Open House is over. In the hotter markets, it only takes one Open House to get the property sold.

3. Listing agents will rely more on video tours and floor plans to show homes online. They may even do the tour for you with their smartphone to minimize the number of people who come in the home.

4. Sellers and Listing Agents are going to expect people viewing the homes to be serious Buyers and will discourage window shoppers by asking to see pre-approval letters before they show the house. I can see List Agents asking for proof of seriousness in other ways, a bio on the Buyer – why they are looking, timeline, etc. So, if you are a serious Buyer, it wouldn’t hurt to write something up and to have your pre-approval in hand.


5. Sellers who are fortunate enough to have a vacation home may retreat to those homes so the property on the market can be shown unoccupied.


If this goes on long enough, it could change the fundamental on how homes are shown moving forward. We’ll revisit this topic in a few months to see what the landscape looks like.

Municipal and Government Services

With cities and towns looking to protect their employees, the municipal services required to close on a home will be affected. Fortunately, the response has been fairly quick on some fronts.

1. Smoke Detector Inspections – the Governor has signed an Executive Order providing for the deferral of smoke detector inspections. The Order went into effect immediately and will remain in place until the declared state of emergency is lifted. The Order provides that the buyer must agree in writing to be responsible for equipping the property with approved smoke and carbon monoxide alarms. Once the state of emergency has been lifted, the required inspections must take place within 90 days.” – by the Buyer, not the Seller.

2. Water Meter Readings – in towns that have automated readings or that allow the listing agent to read the meter, final water bills should not be held up. However, if the automated reading is not working or you live in a town where a representative from the water department must come out to read the meter, your closing could be held up. If you are my client I am already on top of it.

3. Recording the Deed – most Registries have now set up the ability to record deeds electronically. So, this aspect should not hold up closing on a property.


Other Services

1. The Closing – Attorneys are changing how they conduct closings to limit social interaction as much as possible. Sellers can typically give their attorney power of attorney to sign documents for them. You will need to meet with a Notary for this. I am a Notary, so if you will need me, let me know. This is something that also must be done in person, but there are precautions we can take. The proceeds can then be wired or mailed to the Seller. If you are selling your home, have a discussion with your attorney about this now.

If you are a Buyer, the lender requires that you sign the loan documents in the presence of the bank attorney (which is typically your attorney). No one else needs to be present. The Seller can sign their documents in advance. So, if you are a Buyer and you are concerned about social distancing, please discuss with your attorney.


2. Movers and Tradespeople – If you have a transaction in process, make sure all the service providers you will be using are available and that both you and they have health safety procedures in place – moving company, appliance delivery, tradespeople, etc.


3. The Bank – if you are going to need a bank check for the closing, make sure your bank will be open as these must be obtained in person at the counter. If that will be problematic, speak to your attorney about wiring the funds.

The Economic Impact


It goes without saying that with businesses closing down and people staying home, the economy is being hit hard and fast. Because of this, the FED called for an emergency interest rate cut of 25 basis points to a range of 0-0.25 percent and $500 billion round of quantitative easing — including the purchase of $200 billion in mortgage-backed securities.

It’s important to note that a rate near 0 percent does not mean there will be a further drop in mortgage rates – that remains to be seen. Let’s see what next week brings. If it does lower rates, there will be a higher demand for refinances and it may entice home buyers as well.

In addition to lowering rates, the Fed engaged in a $500 billion round of quantitative easing, which is the Federal Reserve outright purchasing assets it doesn’t traditionally buy to pump liquidity into the market. In this case, it was mortgage-backed securities and treasuries of longer maturities. Some homeowners will find it appealing to refinance rather than sell. This might tighten inventory even more than current levels. Inventory levels were low before the virus hit.


Mayor Walsh has banned all construction in Boston beginning March 16, for two weeks, at which time they will revisit the topic. That means all big and small projects must be stopped and the work zones secured, the mayor said. The only exceptions will be emergency projects, mainly roadwork and gas hookups. Naturally, this will have a negative impact on construction workers and builders.


Who I Worry About


Certainly, this is going to immediately impact people who have lost their jobs and income due to businesses closing such as the aforementioned construction workers.

It is estimated that up to 75% of people in this country live paycheck to paycheck which means they cannot pay rent, their mortgage or buy food if they miss even one check. There were 20,000 unemployment claims on Monday, more than in all of February. That is very worrisome.

The Senate passed the first phase of Covid-19 relief which includes free testing and paid sick leave.Of course, if you don’t have a job, paid sick leave doesn’t help. But it should help all the people still working because they are in vital positions that don’t usually get any sick time – people working in cleaning, food service, etc.

The second phase could take longer as the Senate debates what financial relief will entail. I am sure you have read that Republican senators are talking about making it income based going by 2018 tax returns. This is problematic on more levels than there is room to discuss here. Money needs to get in the hands of people whose hours have been cut, people who have lost their jobs and small businesses who have had to close. Many people will need money this week to pay their April rent. Chuck Schumer is proposing a moratorium on evictions and foreclosures which be of great immediate relief. Let’s hope that get passed soon.

Of course, that begs the question of what happens to landlords who are not able to collect rent? Not all landlords are rich slumlords. Some need the rent to pay the mortgage, insurance and tax on the rental property. Hopefully, people will get enough relief to be able to pay their rent.


Possible Areas for Relief


If you have been affected economically, make sure to check with your mortgage holder to see if you can get a modification or delay payments due to financial hardship.

If you are going to need to wait for a relief check or unemployment check, speak to your landlord now. It is best to come to an agreement before you are late on a payment. Legally, a landlord can evict you if you are even 1 day late with rent.

Most cities and towns have established websites that outline all they are doing to help people in their community.Here is the link for Newton
If you have questions on any of this or you will be selling soon and need to discuss how that will play out, just reach out to me. I’m home!

Wallet Hub’s Ranking of Best Small Cities

Massachusetts Cities that Made the List

First, a bit about their methodology – they scored the cities on the categories of Affordability, Economic Health, Education & Health Rank, Safety and Quality of Life.  If your city did not rank high on the list or did not make it at all it could be that is not in the category of Small City as they define it – a population of 25,000 to 100,000. Or that your city is too expensive to live in or does not rank high on one of the other categories.

Source: WalletHub

A good number of Massachusetts Cities made the list and ranked especially well on Health with many cities having a large percentage of the population insured.

Here are the Massachusetts cities that made the list.  The full report can be found here – Wallethub 2019 Ranking of Small Cities.

  • #4 Melrose
  • #6 Lexington
  • #7 Milton
  • #11 Needham
  • #16 Newton
  • #18 Arlington
  • #35 Brookline
  • #37 Wakefield
  • #46 Wellesley
  • #52 Medford
  • # 67 Woburn
  • #72 Waltham
  • #79 Salem
  • #87 Somerville

Of these, Melrose, Lexington, Arlington, and Milton ranked high on Percentage of the Population who are insured.

Milton and Lexington ranked high on Lowest Crime rate.  Many of the MA cities ranked high on Safety – in this order – Lexington, Milton, Arlington, Melrose, Wellesley, Needham, Newton

Nearly all the MA cities ranked high in Education and Health – in this order –  Lexington, Arlington, Newton, Wellesley, Melrose, Needham, Brookline, Woburn, Milton,Wakefield, Medford, Norwood,Northampton, Waltham, Marlborough, Somerville. 

No surprise that none of the MA cities ranked high on affordability.

Salem ranked highest on Quality of life, by a wide margin! 

If you want to get real estate listings for any of these towns, just ask!

Michelle J. Lane

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

 

Open Houses in Newton Sept 14/15

With 127 Open Houses, there is lots to see!  Nice weather for it too.

Michelle J. Lane

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

New to the Market in Newton Week of Sept 9th

New listings on the market the week of Sept 9th.

Lots to see this week and a beautiful weekend to see new listings.

https://bit.ly/2WaP0Ba

If you need help buying a home in Newton, contact me – info below.

 

Michelle J. Lane
MICHELLE J. LANE, Realtor
Berkshire Hathaway HomeServices Commonwealth
CELL: 617 584-3904

 

Listing Coming Soon

Newton Upper Falls Condo Alternative
 

Lovely home has been gutted to the studs and rebuilt to be like new. 

7 Williams St Newton

 

  • 1800 sf
  • 3 bedrooms
  • 2 and 1/2 baths
  • Finished Basement with family room.

Will be completed by mid-August

Price $999,000

Contact me for more information or a sneak preview

 

 

 

 

Michelle J. Lane
MICHELLE J. LANE, Realtor
Berkshire Hathaway HomeServices Commonwealth
CELL: 617 584-3904

Is the Boston Market Slowing Down?

Yes, it would seem so.   As a Realtor, I can tell you subjectively, that it feels as if it is.  Buyers are looking, but not buying or are lowballing homes that don’t sell right away (usually those that need work or are on busy roads).  One might think that is just the normal slow down as we approach winter.  So I ran the numbers to check. I chose two neighborhoods in Boston, a town north of, west of, and south of Boston.  I have run these numbers only for single family sales.  Otherwise, it becomes like comparing apples and oranges.   It can be tough to tell what is going on just by median price.  Any town can have a fluke in one month where a pricey home or two sold or a couple of particularly rundown homes sold.  So I have included numbers for Days on Market (DOM), # of Listings Sold and a snapshot number of houses on the market today vs a year ago.  You can see that overall, the number of listings sold is going down while days on market is going up.  These are indications of a slow down, seasonally adjusted.

At the end of the year, we will update our spreadsheet that shows the numbers for most Eastern MA towns for the year, and shows the trending over the past couple of decades.  That can be found here – 

Boston Area Home Values

Town Sept 2017 Sept 2018 Oct 2017 Oct 2018
Newton        
Median Price $1,107,500 $1,002,500 $960,000 $1,220,000
Days on Market 41 45 25 61
# of Listings Sold 48 37 37 31
# on Market     118 127
         
Malden        
Median Price $462,500 $473,200 $450,000 $528,888
Days on Market 22 25 32 18
# of Listings Sold 24 17 16 9
# on Market     14 34
         
Dedham        
Median Price $484,500 $465,000 $486,000 $522,500
Days on Market 38 42 39 27
# of Listings Sold 12 15 21 22
# on Market     44 51
         
Jamaica Plain        
Median Price 871,000 $897,500 $705,000 $1,067,500
Day on Market 23 89 70 21
# of Listings Sold 5 4 5 6
# on Market     8 7
         
West Roxbury        
Median Price $575,000 $677,000 $605,000 $600,000
Days on Market 51 33 42 29
# of Listings Sold 18 10 22 23
# on Market     20 30

 

So what does this mean for Boston area home owners? No need to panic, this is part of the normal cycle of real estate values. If you are not looking to sell, you’ll be fine over time – check our spreadsheet for proof of that!  If you want to sell next year it may mean that you will have to put money and work into presenting your home in the best possible light.  And you will have to be realistic about price.  Every town and every house are different, so if you want to know what you need to do to get your home sold either this winter or in the spring, just reach out to me so we can discuss.

What does it mean for Buyers?  You may not be fighting so many people in bidding wars moving forward.  There will still be bidding wars.  Because this is an area with affluent buyers who all want a move-in ready home with great spaces and details.  If they have to fight someone for that, they will.  It’s the homes that need work or are in less desirable locations where good deals will be found.  

Buyers do need to keep an eye on interest rates.  If they continue to rise, which I expect they will, that may further supress home prices.  But you’ll be making up those savings with what you pay in added interest.  

If you want the analysis for your particular town, just ask.  And if you need help buying or selling, I am here to help.

Michelle J. Lane
MICHELLE J. LANE, Realtor
Berkshire Hathaway HomeServices Commonwealth
CELL: 617 584-3904

Century 21 Commonwealth is now Berkshire Hathaway Home Services Commonwealth

Starting November 1st, I will be a part of the Berkshire Hathway HomeServices organization!  While I have enjoyed being affiliated with Century 21 these past 9 years, I am looking forward to the change.  Century 21 is a very established company with a global presence and many JD Powers awards under their belt.  And I am going to miss getting my Academy Award Statues from them.  🙂

However, I am excited about the change.  Berkshire Hathaway HomeServices is the fastest growing Real Estate brand today with 47,000 agents worldwide.  And the brand was just recognized as Real Estate Agency Brand of Year and Most Trusted Real Estate Brand in the 2018 Harris Poll EquiTrend Study.

Personally, I feel the colors and branding of Berkshire Hathaway HomeServices are more polished and better suited to a luxury brand in a luxury market.  My sellers will appreciate the more elegant home selling materials.

Nothing changes on the back end.  Commonwealth is simply changing their affiliation from Century 21 to Berkshire Hathaway HomeServices.  We still have the same 22 offices (and will be adding more), the same 500 agents, the same marketing, great service and all you have come to expect.  You will still reach me in all the same ways you did before. 

Here is a link to the full press release.

Please let me know if you have any questions on this change.

Michelle J. Lane
MICHELLE J. LANE, Realtor
Berkshire Hathaway HomeServices Commonwealth
CELL: 617 584-3904

 

What Home Will you Buy if you Win the Megamillions $1.6B?

by Michelle J. Lane, Realtor

With a lottery pot of  $1.6B, one can’t help but dream of what that money can buy.  Let’s say you win, you are probably going to wind up with about $600 million of that if you take the lump sum and then the IRS and DOR take their pound of flesh.  But $600 million can definitely buy you a very nice house – or two.  What if you decide to stay in the Boston area?  Below are the highest price houses on the market today – in the city, in the suburbs and on the water – take one or take all!  Just remember to call me to help you find that home of your dreams.  When you have that kind of money, you can find your dream house even if it is not on the market.  Almost anyone will move for the right price.  🙂

So for the fun part – below are those houses.  Click on the photos for the full listing information.

Most expensive condo in Boston – The Archer Residences Beacon Hill – On Market for $18,000,000

6,000sf, 3 Parking spots, Infinity Pool….click photo for more info.

Most Expensive Single Family Home in Boston – Back Bay Townhouse – $15,000,000.

8,350sf  on 6 levels – 2 garage spots, 2 outdoor.

 

Most Expensive Home in the Suburbs – Brookline $69,000,000 

26,000sf on 14 acres.  This home is in the most affluent section of Brookline where you will have the likes of Tom Brady and Robert Kraft as neighbors.  You definitely won’t spot your neighbors from this house though.  You probably wouldn’t find your own family in this house!

Most Expensive House on the Water – Barnstable -$10,760,000 

10,000sf on 6-acres with 1,700sf carriage house and caretaker’s quarters.  6-car garage and, of course, all that waterfront!

 

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

 

 

Income by Percentile in Massachusetts

by Michelle J. Lane, Realtor

For those of you who received my recent newsletter you know that the real estate market in showing signs of slowing growth.  There are serveral reasons for this.  I mentioned that a major reason is simply that buyers have hit the wall on how much house they can afford.   This post provides some background on what that means.   

Looking at the country as a whole, the income required to be a top earner is as follows.  

  • $480,930 – to be considered in the top 1% 
  • $214,462 – to be considered in the top 5%
  • $138,031 – to be considered in the top 10% 
  • $122,744 – to be considered upper class (earning twice the median of $61,372)

Contrast that with what it takes to be in those same percentiles in Massachusetts:

  • $582,774 – to be considered in the top 1% 
  • $260,286 – to be considered in the top 5%
  • $192,612 – to be considered in the top 10% 
  • $164,760 – to be considered upper class (earning twice the median)

The good news is that more people in the Boston metro area earn an income in the Upper Class bracket than in the rest of the country.

The bad news is that the median price of a single-family house in the Boston area is $615,000 vs $200,000 in the US as a whole.   Other surrounds towns median prices are as follows:

  • Brookline – $1,760,000
  • Newton – $1,202,500
  • Wellesley – $1,433,250
  • Milton – $688,000
  • Cambridge – $1,442,500
  • Somerville – $752,500
  • Medford – $611,000

If you want the numbers for your town, just ask and I will look that up for you.

SO, the median home price in the US is 3.26 times the median income of $61,372. The median home price in Massachusetts is 7.45 times the median salary of $82,380.  

In Newton, where I live, the median income is $147,854. The median home price is $1,202,500.  That is a ratio of home prices that are 8.13 times the median income. This is untenable. Granted, the Boston area has more high income earners than other parts of the state and certainly, other parts of the country.  See the chart below.  But there are only so many high earners to buy in the area and those earners want the best houses – those that are new or in like-new condition and in desirable locations.  That leaves sellers who do not have new or near-perfect homes with a smaller pool of buyers which is why we are seeing a softening of the market on the lower end.  Higher interest rates are bound to compound the problem.

The good news is two-fold 

  1. every house can sell.  It just has to be priced right for the amount of money and effort you are willing to invest to prepare it for the market.
  2. because of low inventory, the market is not going to slump. It appears, for now, simply that price growth is slowing.

 

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

 

 

Buyer Testimonial – Walpole

Michelle knows her trade really well and was instrumental in getting the required paperwork as well as navigating, explaining and communicating through the process. Really glad that she was helping us with this purchase.

Michelle has an uncanny ability to read her audience and explain/communicate at the appropriate level. She was also incredibly helpful in getting the process on track whenever we had challenges or delays.

Michelle was amazing with driving the closing to the end. Great job!

Mauro Torres, Easton, MA