How much Should you Spend on Home Maintenance?

June 30, 2016 by Michelle J. Lane, Realtor®

As a Realtor who specializes in homes that are part of an estate, I have seen a great deal of deferred maintenance in my time.

The two main reasons are:

  • these are the homes of people who lived through the great depression and have the mindset that they will fix what needs fixing, but no more. They see no point in changing things out if they are not broken.
  • The other reason is these are homes of people on fixed incomes – usually one person who has outlived their spouse for a number of years. So the money to keep the place up is not available.

The area I sell in – Newton, MA and the surrounding area – is considered affluent for the most part.  For the purposes of this article, I am focusing on what would be considered the middle or working class who own homes.  The affluent can spend far more than the rule of thumb would suggest and often do.

The generally accepted rule of thumb is that a homeowner should spend roughly 1-3% of the value of the home to maintain and improve.  Of course, that would vary depending on home values in your area.  In Newton, home prices start at $500K.  Most people are not going to spend $15K per year on tiny bungalow.  So, in expensive areas, where a high-priced home is still small, the rule of thumb is closer to the 1%.

Of course, you are not going to spend this each and every year.  But you do need to put the money aside.  When the roof or any other major component goes, you will need to have that money available to replace it.

You may be tempted to spend it on the more fun things like décor and furnishings.  That’s a lot more enjoyable than replacing a furnace or a roof – what seem like invisible improvements.  But deferring the maintenance greatly reduces the value of the property and hurts its ability to sell quickly, even in a hot market.

You are probably hearing all the stories about bidding wars, especially in the hot markets like the Boston. And you might think that any house will sell.  But bidding wars are happening with the houses that are in move-in condition.  Not on houses that need a lot of repair.  Today’s buyers just don’t have the money to make the repairs after buying a home.  And they are not able to make the repairs themselves.  All the reasons for that will be in a follow on blog post, so stay tuned for that.  This one will be long enough!

When clients have deferred maintenance on their homes, I have to explain why their home is not worth as much as their neighbors that was in better condition when it sold.  I actually have people say they don’t understand why today’s buyers are so fussy.  What’s wrong with Formica countertops and linoleum floors?  The old appliances are built better, etc.  Aside from aesthetics of the home starting to look a bit beat and shabby, it matters because everything used to build your home has a set lifespan.  Sure, we agents call all tell stories of homes that are time capsules where everything put in the house 50 years ago is still there and working.  I even sold a 1912 home with its original furnace that was still running.  But those are the exceptions, not the rule.  Everything is going to go sooner or later.

To give you an idea of when that sooner or later is, the chart in this article breaks down the Average Life Span of Homes, Appliances and Mechanicals.  This will not only help you plan for replacement of these items in your house, but should help buyers know how much they are going to have to put into a house they are buying and when they can expect to spend that money.

The contents of this chart have come from several sources, mainly a This Old House article.   http://www.thisoldhouse.com/toh/article/0,,216991-4,00.html    They even give a rough estimate of the cost to replace each item.

Average Life Span of Household Components

Appliance Items Lifespan
Kitchen Appliances 10-20 years
Central A/C 15 years
Electric Water Heater 11-14 ones that are SS lined can last longer
Furnace (Hot Air) 15
Hot Water Boiler 20-30
Thermostats 35

 

Roofing Lifespan
Asphalt / Rubber 10-25+
Wood Shingles 10-40
Metal 25-40
Clay Tile / Concrete Tile / Slate / Copper 50+

 

Flooring Lifespan
Carpeting 8-10 (I’ve seen it left unreplaced for 50+)
Linoleum / Vinyl / Laminae 25
Engineered Wood / Concrete 50
Bamboo / Hardwood / Tile / Marble / Slate 100+

 

Garages Lifespan
Garage Door 20-25
Garage Door Opener 10-15
Light inserts 20

 

Footing and Basement Lifespan
Poured Concrete / Fieldstone / Concrete Block 100+
Sump Pump 5-12
Bamboo / Hardwood / Tile / Marble / Slate 100+

 

Materials Lifespan
Wood – Floors / Doors / Cabinets / Windows / Millwork 100+
Cast Iron  – Tubs / Pipes 50+
PVC Pipe 50+
Fiberglass 10-15
Bamboo / Hardwood / Tile / Marble / Slate 100+
Porcelain – Sinks / Toilets 50
Engineered Trim 30
Insulation 100+
Hardboard / Flooring Underlayment / Softwood 30
Particleboard / Plywood 60

 

Electrical Lifespan
Accessories and Controls 10+
Copper wiring 100+

 

Exterior Lifespan
Brick / Stone / Engineered Wood / Fiber Cement 100+
Vinyl 20+
Engineered Wood / Concrete 50
Stucco 50-100
Paint 7
Mortar 25-50
Caulking 5-10
Decks 10-30
Aluminum Downspouts / Gutters 20-30
Galvanized Steel Downspouts / Gutters 20
Copper Downspouts 100+
Window Glazing 10+

 

Notice that natural materials – stone, brick, wood, cast iron, have a very long life span.  Which is why homes with these materials in abundance are worth more than homes with linoleum, carpets and fabricated materials.  There are exceptions – PVC lasts as do some engineered woods.  And this will improve over time.  But the difference is that natural materials develop a patina over time that gives them character.  Fabricated materials just get shabbier over time.  Not to discourage any one from using them.  There is not the same supply of natural materials that there once was so new construction has to move to these newer materials.  And some building codes require them.  But scarcity is another element that gives the natural materials value.

All of these life spans are averages – they will vary based on how well used items are and the climate.  And, of course, on how well you maintain the house.  A leaking roof will rapidly deteriorate interior components.  But this should serve as a good planning tool – for maintenance and for knowing what a buyer will mentally deduct to come up with the market value of your home at the time of sale.

Now there are always exceptions.  A good number of the estate homes I sell are more valuable to a builder for the land they sit on than they would be for a home buyer to live in.  So if you are thinking of selling your home and not sure where you fall, contact me before you do any work on your home and I will let you know the value of your home as it stands and with repairs and upgrades.

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

 

 

 

The Housing Shortage by the Numbers

If you are feeling like there are just not enough houses on the market this spring, you are not imagining things.  A recent article on Realtor.com outlined the problem.  In short:

From 2009 (the slump) to today new construction of single-family homes, condos, and apartment units totaled 5.6 million.  Over the same period, roughly 1.7 million housing units were deemed uninhabitable or obsolete and were demolished.  That is a net of 3.9 million houses.

In that same time period, the population grew by 17.3 million.  Given the average household size is 2.5 persons, a total of 6.9 million new housing units would be needed – a shortage of 3 million homes.  So no surprise that home ownership is down 3.7% since 2009.

Add to that the fact that incomes have grown at slow pace – 2% over the past year.  While home prices have risen by 6% in the same time period.

To give a more local perspective, below are some local comparisons from 2009 to today:

  • The median price of a single-family home in Newton grew from $939,000 to $2,124,999.
  • The median price of a condo in Boston grew from $419,900 to $829,000.
  • The median price of a condo in Cambridge grew from $489,500 to $668,000
  • The median price of a condo in Somerville grew from $364,450 to $709,950

The problem has been exacerbated by the fact that retired adults are moving back into the city.  Everyone want to live in walkable neighborhoods.  Typically, these retired baby boomers have the money (in cash) to buy up properties that would normally be bought by young families working in the city making the battle for these limited properties more frenzied.

That is not to say that prices are up everywhere.  Home values follow the jobs.  The farther you are from the Boston/Cambridge mecca of job opportunities, the less likely it is that prices have risen.  For example:

  • The median price of a single-family home in Worcester is exactly the same at $214,900, while condo prices are down.
  • The median price of a single family in a majority of towns outside the Greater Boston area are up about 5% in that same time period from 2009 to today. – from cities such as Lowell to suburban towns like Boxboro, Georgetown, Foxboro, etc.  While that is great for people looking to buy in these towns, it means the possibility of selling in one of these towns and moving closer to the city is drifting off farther into the distance.
If you want to know what has happened to home values in your town, just ask.
All this means that we need more new construction.  A problem that is not easy to solve.  Debates on this topic can be followed in the editorial section of most local papers and no one seems to have the answers.  The cost of land in these towns make it impossible for builders to create affordable houses. 40B is flawed in that a builder must just put aside 20-25% percentage of units as affordable, while the units overall could still be super expensive.
Hopefully, the state, cities and developers will come up with creative solutions – perhaps more development of micro apartments for single adults and clusters of small houses on small plots for seniors or couples starting out.
If the state is smart, they will build more and better commuter transportation so people can live in suburban towns and not feel like they are so far from the action.  These suburban towns may even need to up their game on building centers with more to do and better transportation within the town so seniors don’t need to own a car or have a driver’s license. We shall see what the next few years bring.
In the meantime, it does mean though that home buyers will have to move farther away from the city to get a property they can afford.  Or be willing to buy a home that needs a lot of updating – or both.
If you need help finding a home, just ask.  You can complete this survey to let us know what you are looking for and we will contact you to start your path to home ownership – Home Buying Survey

Michelle J. Lane

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

 

 

 

MA Small City Rankings on WalletHub

WalletHub has ranked the best and worst small cities in the U.S.  Lots of positive news for Massachusetts.

Northampton ranked the highest MA town on the overall list at #8.   The rest of the Top 10 are:

  • 14 – Milton
  • 26 – Lexington
  • 105 – Wellesley
  • 120 – Danvers
  • 138 – Saugus
  • 143 – Somerville
  • 150 – Melrose
  • 165 – Newton
  • 171 – Needham

Methodology

To find the best small cities in America, WalletHub’s analysts compared 1,268 cities across four key dimensions: 1) Affordability, 2) Economic Health, 3) Education & Health and 4) Quality of Life. For our sample, we chose cities with a population size between 25,000 and 100,000 residents. Please note that “city” refers to city proper and excludes surrounding metro areas.

Lists on which MA ranked highest.

WalletHub - Most EducatedWalletHub - MIllenials

WalletHub - Highest Percentage with Health Insurance

 Click Here For the Full Breakdown

Other key findings for Massachusetts home buyers –

MA ranked #1 as the best state for education.

  • 9th Happiest State
  • 13th Best State to Have a Baby
  • 5th Best State for Working Moms
  • 21st for Women’s Equality
  • 11th for Nurses
  • 28th for for Doctors

So Massachusetts has a lot going for it. Not the best state for retirement – will cover that in a future blog post.  So that tells me this is a great state for everything from going to college up to retirement, then it might be time to move someplace warmer, less expensive and slow paced (could we actually slow down?).  Whatever phase you are at, if you need help Contact Me.

Michelle J. Lane

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

 

The Force is Strong with the Boston Market this Winter (2013)

Given the winters we had over the past couple of years it is understandable that sellers would think the market is slow this time of year.  But our office just has a brisk weekend of Open House attendance – in the pouring rain.  I had 30 groups of people show at this new listing in Waltham and the house is now under agreement.  A few were neighbors, a few were just starting their search, but the rest were serious buyers.  This seems to be the case in all of the Greater Boston market.  So if you are looking to sell your home this year, now is the time to start the process.

19 Humboldt Exterior Latest

19 Humboldt Street, Waltham

To give you an idea of how strong the market is, there are about the same number of Single Family homes on the market in Waltham as this time last year. – 31 vs 30.  But the median price has gone from $494,000 to $615,000 and the average price has gone from $$621,000 to $649,000.  Demand and new construction are driving prices up.

Want to buy or sell ?  Contact Me.

Michelle J. Lane

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

 

Niche.com School Rankings for 2016

Niche

The rankings out and no real surprises here.  The Top Ten School districts are the usual suspects.

  1. Lexington
  2. Dover-Sherborn
  3. Acton-Boxboroough
  4. Brookline
  5. Wellesley
  6. Weston
  7. Westwood
  8. Newton
  9. Belmont
  10. Westford

The full list can be found here – Top School Districts in Massachusetts

The Top Ten Public Elementary Schools

  1. Lexington – Joseph Eastbrook
  2. Lexington – Maria Hastings
  3. Lexington – Bridge
  4. Lexington – Bowman
  5. Lexington – Harrington
  6. Newton – Ward
  7. Lexington – Fiske
  8. Sharon – East
  9. Newton – Mason Rice
  10. Weston – Field Elementary

The full list can be found here – Top Elementary Schools in Massachusetts

The Top Ten Public High Schools

  1. Lexington
  2. Brookline
  3. Boston Latin
  4. Acton-Boxborough
  5. Dover-Sherborn
  6. Cambridge Rindge & Latin
  7. Wellesley
  8. Weston
  9. Westwood
  10. Belmont

Newton Ranked 11. for North and 13. for South.  The full list can be found here – Top High Schools in Massachusetts

Overall, Massachusetts ranked Number 8 in States with the best schools.  For my CT friends, CT ranked Number 4!

Cambridge was the only Massachusetts city in the Top 100 Cities in the US in which to raise a family. Perhaps because it ranked #2 behind Manhattan in cities with the Most Things to Do. (Boston ranked #4).  Because they categorized Newton as a town instead of a city, it was not on that list, BUT it was Number 8  (and the only Massachusetts town) on the list of Best Towns to Raise a Family. 

Newton, Framingham and Waltham made the Top 100 Towns for Best Community.  The criteria for these selections includes interesting and important criteria such as the grades given to each school weighted by the number of students served, higher education rate, diversity, income equality, etc.  These towns also ranked high on easiest commute.  You would think that Cambridge would have ranked high in easiest commute given the number of jobs  there.  But few people who work in Cambridge can afford to live there or may choose not to because a house with a yard is insanely expensive.  So the commute for people who work there, but don’t live there is not the best.

Certainly, it would seem that, as in the past, Cambridge and Newton are going to be the areas that will boom again in this spring market.  However, any of the towns in the list of Top 50 school districts will fare well if the commute works for the people living there.  It is good to see that towns like Framingham and Waltham can offer an affordable alternative to those looking for an overall good town in which to live in which they can be part of a vibrant and diverse community and that offers a solid educational experience for their children.

If you or someone you know is looking to buy this year, contact me and we can analyze which towns make the most sense given what matters most to you.

Michelle J. Lane

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

Home Values 2015 – What is My Home Worth Now?

With housing prices climbing and inventory shrinking in most towns, I get a lot of questions from clients who are afraid to make the wrong decision when it comes to real estate.

  • 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)

As with most questions in life, the answer is – it depends.  What I will say is this is not a bubble.  10 years ago WAS 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.  Over time those dips and peaks translate to an upward trajectory of housing prices.

Back in 2010 Boston Magazine created a table of median prices from the peak of 2005 to the slump of 2009 to the beginning of the recovery in 2010.  They also showed the 10 year cycle from 1999 – 2009.  They did this to illustrate that the slump had ended.

To help answer your questions today, I have added the information for median prices today and for 2014.  I have analyzed the market movement from the 2005 peak to today, from the 2009 slump to today and from last year to this year.

HIGHLIGHTS

The bottom of the last slump was 2009.  Of the 180 towns surveyed, 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 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, I would say that if you think you will be moving around, continue to rent.  If you are sticking around for a while, buying will help you to float upward with the real estate market.  Otherwise, expect that dream 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

 

EMC / Dell Deal – Potential impact on Real Estate

There is no  question that the Dell $67B purchase of EMC will have an impact on commercial real estate in Hopkinton.  EMC is the largest holder of commercial real estate in the area.  But they also employ roughly 9,000 people in the towns of Hopkinton, Franklin, Marlborough, Milford and Southborough – with the majority in Hopkinton.  Although they have announced that the combined enterprise systems business headquarters will remain in Hopkinton, any merger means consolidation of jobs and, almost always, a reduction in the number of employees, while relocating others.  It is too soon to say what that impact will be, but if you are looking to buy in these towns, I would keep abreast of progress on the merger.  If you live in one of these towns and are thinking of selling, sooner might be better than later.

For more information, check out EMC’s press release here – http://www.emc.com/about/news/press/2015/20151012-02.htm

Michelle J. Lane

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

Great Entry Level home in Needham! $485,000

541 Central Ave

This adorable 4-bedroom, 2-bath Cape is an awesome entry-level home with huge potential. First floor has living room with fireplace, dining room, kitchen, 2 bedrooms, a full-bath and a heated enclosed porch with phenomenal views of the back yard. Upstairs has two more bedrooms and another full bath. The walk-out basement has high ceilings and great potential to be finished. There is gas on the street. With your updates or expansion this house can fit a family comfortably for years to come. The GORGEOUS, huge back yard abuts conservation land and offers the oasis you would want in your own piece of land. Close (0.7miles) to the center of town, the T, shopping, etc. Easy access to major routes.

More Info Here

CONTACT ME for a showing.

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

What Sells a House Today?

House with HostasWhile the timeless key factors of location, lot and layout are still important, condition is rapidly rising higher in importance.  In decades past, buyers did not shy away from handyman specials, seeing homes that needed work as an opportunity to add sweat equity to their home’s value.  Well, not so much today.   Boomers were the product of parents and grandparents who lived through the austerity of the depression – knowing how to do everything yourself was a necessity for those generations. So they taught their children, the Boomers home repair skills.  But we didn’t pass them on to our children. Instead, we sent them to college.  So, for the most part, the new generation of home buyers does not want a house that needs work.   And frankly, neither do Boomers anymore.  If someone in their 50s or 60s is buying a house today, they typically have lived through fixing up a house or two, or three and are tired of it.  They want to enjoy their retirement years in a house that is not constantly in need of repair.   The trend for all generations is not to be weighed down by the demands of our houses and to enjoy the time we have on this planet.

Reason #2.  Buyers don’t have money left over after purchase to shell out for repairs.  It takes everything a home buyer has to buy the house.  There is no money left over to pay contractors.  With today’s interest rates, it is easier for a buyer to take on a larger mortgage than it is to gather enough cash for renovations.

Reason #3. Buyers don’t have the time or know-how to manage contractors.  Most couples are both working to pay that mortgage, so no one is home to manage the contractors.  And with the demographic of many greater Boston area buyers being international, you have a population of buyers who don’t know any contractors they can trust.

So I am seeing that buyers would rather get in a bidding war on a a house that is in excellent condition and pay a good deal more for it than they would for a house that is in fair or poor condition.  For example, I recently sold a house in Newton that was a 1,500sf 2-bedroom Cape for well over asking price.  Aside from having only 2 bedrooms, the house did not have all the amenities buyers expect today – master bath, granite counter tops, a children’s play room.  So you would think it would not sell so fast or for so much over asking.

But what it did have was absolutely immaculate condition.  Everything looked freshly painted, not a nick, scuff, or spot of lumpy paint anywhere.  The walls and trim were in the condition you would have imagined they were when the house was built in the 1930s.   Nothing was broken, cracked, loose or dingy.  The house gave the impression of being meticulously cared for.   And lastly, the house was so clean you could have eaten off of every surface.  Although it did not have the granite counter tops we all seem to love, it also did not have the dated elements that buyers seem to find most offensive – Hollywood lights in the bathroom, old wall-to-wall carpeting in non-neutral colors, tiles from the 70s – 90s that no one seems to like, brass fixtures in the bathroom ,etc.  if you have these things, work on getting them upgraded.

I have to say it was a joy to sell this home. All the buyers who came to the Open Houses commented on the condition and even the home inspector raved about the house. I am seeing more and more that the homes in excellent condition are selling fast while larger houses in the same price range in fair condition do not.

So, If you are thinking you may be selling your house in the next year or two, then you should have a game plan for getting your home in the condition necessary to have it sell for top dollar.  If you would like our Guide to Preparing Your Home for Sale  Contact Me for a copy.

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

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