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

 

Seller Testimonial – Newton

50 GreenoughSimply put, working with Michelle was a wonderful…and easy…experience. ~ Seth Wulsin, Newton

Buyer Testimonial – Newton


Close friends of our’s referred us to Michelle Lane as they’d completed three transactions with Michelle and raved about her service. Michelle Lane exceeded our expectations for what a RE broker can accomplish. This was our first time selling a property and she “held our hands” the entire process and made everything easy. She also landed multiple offers, all above asking. After working with Michelle Lane on both the purchase of our new house and the sale of our condo, we won’t consider any other agent for our future needs.

 Tom A. – Newton

Buyer Testimonial – Newton

42 FairhavenMichelle understood my needs and wants very quickly and was efficient in finding me the right properties. She well negotiated for me and kept it real. She helped me with the hard conversations and issues very well and was on top of every detail to the very end!
 
Kelli, Newton

DO POT SHOPS DEVALUE HOMES?

With the legalization of recreational marijuana in Massachusetts and the opening of shops in Newton potentially on the horizon, I am being asked if pot shops will negatively affect the value of homes in the vicinity of the shops.  The answer will surprise you – several studies on the subject all came to the same conclusion – pot shops increase the value of nearby homes. 

Almost all studies focus on Colorado given recreational sale of marijuana was legalized in January 2014, providing a good span of data to study.  But studies of states with at least 1 year of data show the same trend.

  1. Real Estate Economics, in this study, James Conklin and coauthors studied how the conversion of medical marijuana stores to recreational marijuana stores affected housing prices in Denver, CO. Their research provided strong evidence that homes located near such converted stores experienced a much higher increase in value than houses located farther away — as much as 8 per cent more.
  2. Economic Inquiry – in a recent article, Cheng Cheng and coauthors found almost similar results suggesting a 6 per cent premium in prices for homes sold in municipalities that legalized retail sales of marijuana, versus those that didn’t.
  3. Realtor.com found that since the first recreational pot shops opened, the median home price in the state jumped from $248,000 in the first half of 2014 to $298,000 in the first half of 2016. Realtor.com reports the four states with at least a year of experience with recreational marijuana sales showed a marked increase in home prices — well above the national median price.
  4. An academic study from two University of Mississippi economics professors, estimates that Colorado’s legalization of recreational cannabis and local governments’ approval of retail outlets within their jurisdictions increased housing values by an average of 6 percent.
  5. A second study, from the University of Wisconsin School of Business and economics researchers from two additional universities, focused on property values in Denver and found that homes near retail cannabis outlets — within just 0.1 miles — gained 8.4 percent more in value than houses just steps further away, from 0.1 to 0.25 miles. That big increase amounted to almost $27,000 for an average house.

SOME POSSIBLE REASONS FOR THE INCREASE IN VALUE

  1. Homes around marijuana dispensaries may have been subject to a discount prior to legalization, but that legalization with no ill effect, lifted the stigma around such homes. We’ll have to watch home values in Newton over time to know if that is happening here, but so far, that does not appear to be the case.
  2. Another is that the stores had economic effects that were highly localized and boosted the economic profiles of their specific neighborhood – more jobs, bringing customers into nearby shops, paying high commercial rents, etc.
  3. Legalization led to a surge in housing demand prompted by marijuana-related jobs. And, as existing residents become more willing to remain in place, the housing supply drops as demand rises, thus the increase in property values.

It is a different story for communities harboring grow houses.  Surrounding properties do lose value because the pungent odor the plant emits turns off home seekers.

Another concern around legalization is the claim it will encourage more crime and further reduce home values of those living near growers, manufacturers, and retailers. The FBI’s Uniform Crime Report indicates a 3.5% increase since Jan 2014.  It’s important to note, however, the city began tracking marijuana-related crimes as well, which make up less than 1% of all offenses.  Experts believe the growth is tied to population growth and and not directly tied to the sale or use of the drug.

One could see that the incidents of people driving under the influence could increase.  Particularly if they are driving to a shop to get their pot.  But I suspect that if people are the type to drive under the influence, they are already doing so.

It is highly unlikely that someone is going to mug you for the pot you have in your pocket considering it is legal for everyone over the age of 21 to grow their own pot at home.  The opioid and heroin epidemic is a far greater concern when it comes to crime.  As Realtors, we warn our clients not to leave any pain medication in their medicine cabinets as addicts have been known to come to open houses and rifle through medicine cabinets.  No one is going to come through your house looking for your pot considering they can legally grow or buy it themselves.

The biggest concern is robbery of pot shops.  Because marijuana is not legalized on a federal level, shops are not able to take credit cards or checks.  They therefore, carry a lot of cash, which makes them susceptible to armed robbery.   The shops and the federal government are looking for solutions to this problem, so this could get solved over time.

So the targets of crime are the cultivators and shops.  There is no evidence that people who live around the facilities are at a higher risk of crime.

The bottom line is that evidence so far indicates that home values increase in neighborhoods where there are recreational marijuana dispensaries.

I believe right now, the biggest risk to home values is the natural ebb of the market.   It is natural for the market to soften after several years of growth and that seems to be happening now.  Buyers are being much more selective in what they will put an offer in on.  They want move-in ready houses with new kitchens and baths, Central A/C, recessed lights, newer roof, windows, mechanicals etc.  In other words, new or like-new homes, and are willing to pay a premium for those.  Houses that do not have all this are starting to languish.  Particularly as sellers believe they are riding a wave of ever increasing prices and are pricing their homes too high.

I’ll be writing another blog entry on this topic shortly so stay tuned.

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

 

State of the Real Estate Market – Jan 2018

by Michelle J. Lane, Realtor

Housing Value

There are so many topics we can cover in talking about the state of the Real Estate market.  To be succinct, I will briefly cover these three topics.

  1. Tax Reform Bill
  2. Inventory
  3. Interest Rates

Tax Reform

There are many articles out there on the new tax reform bill and how it impacts homeowners.  I wrote one you can find here.  As you probably know, the key changes are that the Mortgage Interest Deduction has been capped to a $750,000 mortgage, down from $1m and that the maximum amount of real estate tax you can deduct is $10,000.  These changes will affect homeowners here in the Greater Boston area.  Today the median home price in Newton is $2,295,000, which would clearly require a mortgage over $750,000 for most people.  Moody’s is estimating that this will cause a 4% loss in home values from where they would have been if the Tax Reform Bill were not in place. 

Inventory

It is early in the year to be able to say where inventories will be for spring, but looking at a snapshot of today compared to the same day over the past 4 years, inventories are remaining low:

Newton Housing Inventory

Interest Rates

Given the Tax Reform Bill reduction in the Mortgage Interest Deduction only affects new mortgages (after Dec 15, 2017), it is possible that sellers will want to hang on to their existing mortgage and stay in their homes, which will further exacerbate inventory shortages.

Are now over 4%.  I expect they will stay there and possibly go up from there.  I say possibly only because rates have defied rate hikes by the Federal Reserve over the last couple of years.  The Fed does expect to make at least two more hikes in 2018. 

In Summary….

Because inventory is still low and people have not yet felt the impact of the Tax Reform Bill, I expect the spring market to still be brisk.  I suspect that the less desirable homes will feel the sting of the changes  by staying on the market longer.  By less desirable, I mean those that need a good deal of updating.  Buyers (who are not builders) are reluctant to buy these.  Once they make their downpayment, they don’t have money left over for updates.  If they have any money left over, they don’t have time to manage the projects, don’t want their children breathing in construction dust, and cannot find contractors to do the work.  

At the entry level prices (in Newton that is around $600K) you will find Buyers who are willing to take on projects in order to get into the city.  However, once you get to prices where they can buy a house  that does not need work, say $800K or more, they would rather get into a bidding war on an updated house than buy a project house.   If you want to know the value of your home, contact us here.

 

Getting Your Home Ready to Sell – Disposing of Things that Cannot go in Regular Trash Collection

This information is for those of you who live in the City of Newton.  If you don’t live in Newton and want the information for your town, just ask!

There are so many things to do to prepare a home for sale.  Then, once it is under agreement, a whole new set of To-Dos to get ready for closing.  Many home sellers don’t think about disposing of all the stuff they are not taking with them until they are packing to move which causes undue stress and can even hold up a sale.  So, to help those of you who will be selling this spring, the follow is useful information on the disposal of large bulky items and hazardous waste.

Some products which have been considered hazardous in the past can now be disposed of with the regular trash. These include:

  • Alkaline batteries made since 1994 (AAA, AA, C, D and 9 volt)
  • Smoke detectors
  • Latex paint (dried out or with sand or kitty litter to solidify) OR bring usable (less than 3 years old) paint to the Latex Paint Exchange at the Recycling Center
  • Soiled bandages in plastic bags, securely fastened
  • Driveway sealer (latex or oil based, with lid off)

As you may know, the City of Newton will take up to 5 large bulky items (rugs, mattresses, etc.) per week on your normal collection day.  You just need to call by 3:30 on the business day before your collection.  You can schedule online by clicking 311 on the home page.  Or you can call the main number at (617) 796-1000.  You should start doing this weeks before your closing so that you can get everything removed before the day of closing.  Buyers don’t appreciate when there are large pieces of furniture and junk out front on the day of the closing and can even ask you to remove them before closing.

The city does not take construction materials such as cinder blocks, bricks, pieces of wood, old toilets, etc. To dispose of building materials, you would need to rent a dumpster or hire a junk removal company to take the materials away.

They also do not take TVs, Metal or Plastic as part of bulk pickup.  TVs and metal items can be picked up curbside or dropped off at the Recycling Center for a fee which you must pay online in advance.  Appliances can be dropped off for free or picked up curbside for $25 per item. MassSave will pick up working old refrigerators and freezers and give you a $50 rebate!

Large pieces of cardboard, plastic and metal for recycling can be dropped off for free at the Recycling Depot.

Hours and Address of Recycling Center
Monday-Saturday from 7:15am-2:30pm*
Closed on Sundays and Holidays

Located at 115 Rumford Ave, Auburndale, MA 02466 

There are many options for donating household items, clothing, and other useful items.  Too many to name here, so I will provide those in the next blog post.  Feel free to reach out to me if you need that info now.

2018 HAZARDOUS WASTE DAYS

First Saturday of the month and Third Thursday of the month – which are the following dates:

  • February 3rd
  • February 15th
  • March 3rd
  • March 15th
  • April 7th
  • April 19th
  • May 5th
  • May 17th
  • June 2nd
  • June 21st

 

MATERIALS ACCEPTED AT THE RECYCLING CENTER

The full list can be found here –Materials Accepted at the Recycling Center and includes things like paint, items containing mercury, batteries, auto products like oil and outdoor items like pesticides.  Please be a good custodian of mother earth and recycle these items instead of throwing them in the regular trash!

Stay tuned for more blog posts on getting your house ready.  If you are thinking of selling your house and want to go over all the step to get ready, reach out to me and I will be glad to help.

Michelle J. Lane

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

Congress Proposes Bill that will impact Affordable Housing

The WSJ recently published an article on Affordable Housing being at risk.  To net it out, members of Congress have proposed reducing the Corporate tax rate from 35% down to 15-20%.  Approximately 25% of all new apartment construction in the US is affordable housing.  So this will have a big impact on aaffordable housing.   As banks find these loans less attractive and reduce lending, projects will lose funding.  Investors have already started pulling funding for existing projects.  This will be a real shame for those who most need help finding housing.

Specifically in Newton Mayor Warren has set a goal of adding 800 affordable units by 2021.  This goal could be impacted by less available funding for affordable housing.  Fortunately, Massachusetts has Chapter 40B promote the building of affordable housing.  Basically, the way it works is that if developers allocate a minimum of 20% of the units to affordable housing, they can get a single comprehensive permit and 40B also allows them to override local zoning requirements.   Since those developers can make a good profit on the market value units, they may not be as dependent on loans from banks that are targeted towards building affordable housing.  

Overall, given many poor and working class people’s fears over housing costs, this is a shame because it has not even passed yet and estimates are that the affordable housing market has dropped by $1B.  

 

For more info on affordable housing opportunities in Newton – click here.

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

 

Best Elementary Schools in Massachussets – 2017

Mason Rice School

Mason Rice School, Newton MA

Niche.com came out with their 2017 list of best elementary schools in Massachussets.  Lexington, Newton and Wellesley dominated the list.  Mason-Rice fell from number 1, but is still, the highest ranking in Newton, which is creating demand for housing in that school district.   In all, 9 elementary schools in Newton made it to the top 25.  Great schools, combined with easy access to Boston via the Green Line and the Commuter Rail are really pushing up prices of homes in Newton. 

Here are the top 25 to save you digging through the list:

  1. Lexington – Maria Hastings
  2. Lexington – Bowman
  3. Newton – Mason Rice
  4. Wellesley – Schofield
  5. Lexington – Joseph Eastbrook
  6. Newton – Ward
  7. Lexington – Harrington
  8. Lexington – Bridge
  9. Lexington – Fiske
  10. Wellesley – John D. Hardy
  11. Wellesley – Hunnewell
  12. Newton – Cabot
  13. Belmont – Roger E. Wellington
  14. Wellesley – Sprague
  15. Newton – Angier
  16. Belmont – Winn Brook
  17. Newton – Countryside
  18. Newton – Pierce
  19. Newton – Memorial Spaulding
  20. Brookline – Heath
  21. Belmont – Daniel Butler
  22. Westford – Day
  23. Newton – Bowen
  24. Newton – Lincoln Eliot
  25. Wayland – Claypit

For more details on these rankings, check out the full list here:

2017 Top Elementary Schools in Massachusetts 

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