Spring 2017 Market has Launched

This week, 21 houses came on the market in Newton.

New to the Market in Newton

Compare this to 11 last week.  And properties are going off the market faster than they are coming on.  33 houses went under agreement in Newton this week.

So far, it is still a seller’s market.  I don’t expect that will change until interest rates spike. More about that in my next post.  So if you are a seller, it is not too early to get your home on the market.  Contact Me if you are  thinking of selling.  By the time you get it ready, staged and photographed, the market will be in frenzy mode – if it is not already.

If you are a buyer, unfortunately, the competition is still tough.  If you see something come on that you like, there is no time to think about it.  See it as soon as you can.  And let’s make an offer.

If you want to see what is new in your town, Search for New Listings here.

Let the games begin!

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

MICHELLE J. LANE, Realtor
Century 21 Commonwealth
CELL: 617 584-3904
michelle@michellelanerealtor.com
www.MichelleLaneRealtor.com

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

 

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

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

 

Selling a Home in the 2014 Spring Market

Selling a Home in the 2014 Spring Market

by Michelle J. Lane

If you were reading my newsletters from last spring, you will recall that I spoke (ok maybe there was some whining in there) about the dearth of inventory.   Overall in the spring of 2013, there was about two-thirds the inventory of previous years.   Boston Magazine has come out with their Real Estate Issue.  It is chock full of great information that supports what I will be sharing with you in this post, so I will link to it here.  Boston Magazine Single-Family Home Prices.

In nearly every town, prices spiked in 2013.  Largely due to limited inventory.  This chart shows (in blue) the average number of houses on the market each month, and (in Green) the number of houses that went Under Agreement that month and follows the market from Jan 2012 through last month.  Look at the difference between 2012 and 2013.   The trend is continuing in 2014.  Today there are 80 single-family homes on the market in Newton.  This time last year there were 111.

Newton Housing Trends

This means Buyers are in for a spring market that is even more challenging than last year.  But it means that Sellers are in a great position to get top dollar for their homes.  So this brings up several questions for sellers – a couple of which I will answer here.  The rest in follow on Blog posts.

What Should I Do to Prepare my Home for Sale?

In this market, it depends on who will be the audience for your home.  Home Buyers fall into 3 categories.

  • Investors – looking for a home they can improve and flip or rent out.
  • Home Buyers – whose budgets are really tight so who are willing to do cosmetic work to get a home in their price range and are willing to put in sweat equity to bring the home to its former glory.
  • Home Buyers – who have no time or inclination to improve a home and who often have a higher budget.

If your home needs a great deal of work – chipping paint, floors that need refinishing, kitchen and bathrooms that need updating, older roof, older furnace, etc. it does not make sense to try to bring the home up to the level of a home that is completely updated and renovated.  Doing all that as you are leaving the home means you get no enjoyment of the improvements and you will not get greater than a 100% return on the investment.  In the Remodeling Magazine’s 2014 Cost vs Value Report, no improvement gave greater than an 87% return except installing a new front door.  Your ideal buyer will be an investor or a Home Buyer who cannot afford a higher priced home.  If priced right, your home will still get into a bidding war.  The best course of action is to pack everything up, give the place a good cleaning, fix only those things that are clearly broken, do some minor staging and get the place on the market.

If your home is in good condition overall (kitchen and bathrooms have been updated in the last 20 years), furnace, roof, electrical and plumbing are not near end-of-life, then making cosmetic changes to show the home in its best light may be worthwhile.   However, don’t take so long to do these things that you miss the opportunity to get the home on the market when the inventory is tightest.

If you home is in great condition and on the high-end of the pricing spectrum for your town, then you are best off putting your home on the market in April when most of the buyers for the high-end will be out looking.

Beyond timing, there is so much more – are there permits to close out?  Warranties and policies to dig up?  This is where your Realtor comes in.  You want to start early and work together on an preparedness strategy that makes sense for your home.

When Should I Put my Home on the Market?

As soon as you can!  You might think – oh she is just saying that because she is a Realtor.  I  refer you back to the chart.  Look how tight the difference is between homes On the Market vs Under Agreement in March, April, May for 2013.  This year will is  even tighter.   It is especially tight for homes under $1M in value.

Here is an example for you – this home sold in 2010 for $350K.  The owners did NOTHING to improve it and then put it on the market in February at $560K.   We agents all thought they had lost their minds and the house was overpriced by about $120-$150K.  Well, much to my surprise, it went under agreement – why?  Because there was nothing else on the market in this price range.  It will be interesting to see if the house appraises, but the point is someone was willing to pay that inflated price out of desperation.

12 C

When everyone starts dropping their homes on to the market in April, there may not be as much desperation for a run-down overpriced house. 🙂

Want to talk about selling your home? Feel free to contact me.

Michelle J. Lane

Michelle J. Lane
Century 21 Commonwealth
CELL: 617 584-3904

Home sales and prices jump again in Massachusetts – October 2013

From Erin of the Boston Globe
By: Michelle J.Lane Realtor

This article is written for the entire Massachusetts market. My take on the greater Boston area specifically is that we saw the biggest boom in the spring and summer. It does appear to be leveling off now as the median price of condos on the market in Boston is actually down from $524,000 last year to $499,000 this year. Inventory is UP by 10%.

In Newton, where I live, inventory is down 10% from same time last year. Median price of homes on the market is up considerably. But that is more because there are more higher end homes on the market and none at the entry level price range. It is always important to look at what the market is doing in your part of Massachusetts so that you know how best to plan your purchase or sale. If you want to know what the market is doing in your town, contact me and I will fill you in.

The Article
The Massachusetts housing market continued to boom in October, as home sales and median prices jumped by double-digit rates from the same period last year, according to a report Tuesday by a Boston real estate tracking firm.

October Home Sales

Single-family home sales rose 18.5 percent last month, while the median price increased nearly 10 percent, to $313,050 — the highest price for October since 2007, according to Warren Group. It was the fourth consecutive month that sales increased by 10 percent or more from the previous year.

“The pace of the housing market has surpassed expectations this year,” said Warren Group CEO Timothy M. Warren Jr. “The past four months have really been booming.”

If the trend continues, Warren said, home prices by next year could return to their pre-recession peak of $355,000, reached in 2005. The median price for homes sold for the first 10 months of this year was $324,900.

A widely followed survey of metropolitan real estate markets, the S&P/Case-Shiller Home Price Indices, also found Boston area values on the rise. The index, which tracks repeat sales, showed that Boston area prices rose for the third consecutive month in September, gaining 7.5 percent from a year earlier.

Warren said the surging housing market is driven in large part by pent-up demand from Massachusetts residents who put off buying homes in the years following the housing bust and economic downturn. With the economy recovering and consumer confidence improving, buyers are now making their move.

That strong demand coincides with a tight supply of homes on the market. The result: rapidly rising prices. The inventory of single-family homes for sale this October decreased by nearly 20 percent from the same period last year, according the Massachusetts Association of Realtors.

The realtors group, which tracks a slightly smaller universe of sales than Warren Group, reported similar statistics Tuesday. Home sales rose 12.2 percent from a year earlier, and prices jumped 12.3 percent year-over-year to $320,000.

“If sellers continue to sit this market out and inventory continues to shrink, we’re going to see fewer qualified buyers able to keep up with increasing prices,” Kimberly Allard-Mocia, president of the realtors association, said in a statement. “Full recovery is close, but now it is up to the sellers to make it happen.”

Warren and Barry Bluestone, director of the Dukakis Center for Urban and Regional Policy at Northeastern University, said they expect housing inventory to increase this spring, as buyers continue to bid above asking prices for months and potential sellers realize they can recoup their investments — and more.

“We’re going to see a significant amount of single-family homes for sale, which will tend to moderate price increases,” Bluestone said. But for now, he added, “This is becoming a very good time to sell.”

Search Homes for Sale in MA

Want to talk about selling your home? Feel free to contact me.

Michelle J. Lane

Michelle J. Lane
Century 21 Commonwealth
CELL: 617 584-3904

How Boomers will Change Housing Market

   By Michelle J. Lane

 

 

The article below, supplied by MSN real estate, outlines how the aging of baby boomers will change the real estate market.  I read a very prophetic article about 20 years ago that predicted a glut of large houses by the year 2020 because 20% of the population would be 65 or older by then.   Makes sense when you calculate that the last of the boomers would be about 65 in 2020.  I wish I could remember who wrote that article and give him credit.   He could not have known that we would be hit by this very hard recession, but he accurately stated that our children would not be able to afford to buy our houses or even maintain them if they are left to them as part of an estate.

Out of the 135 houses on the market today (October 2012), 50% are  over $1M.  This time last year, it was 37%.  It is already happening!!!!!

In short – baby boomers will be healthier longer and live longer, so they are not moving to nursing homes or senior housing communities until later in life and will stay in houses longer.  Either staying in their current homes, moving to cities or campus towns, or living with their children (more likely, their children will live with them).

What this will mean for the real estate community is that the number of large, expensive houses on the market will continue to grow, condos closer to town centers or in the city will be in high demand – particularly ones that are on one level or have a first floor master and rentals will in higher demand.

It also means that baby boomers will need to work longer and/or make their money last longer.  In all fairness, many will want to work longer.  When social security was put in place, the life expectancy was 65.  It is now 79!  So what this tells me is that if you were born before 1965 you should seriously consider selling your big house now or make sure your children can afford it if you leave it to them as part of your estate.

The MSN article………..

By Bruce Kennedy
The demographics on aging in America are literally a gray area. The number of people age 65 and older in the U.S. is expected to rise to an unprecedented 55 million by 2020 — up 36% from 2010. By the end of this decade, nearly 40 million baby boomers — those born between 1946 and 1964 — will turn 65.

According to a new study by the Urban Land Institute, those so-called leading-edge boomers, the ones born between 1946 and 1956, will not act like prior generations as they approach the golden years. In fact, they’ll probably blow a hole through the way we look at retirement, housing and the elderly.

John McIlwain, the ULI study’s author, divides people over age 65 into three waves: the World War II-era “greatest” generation, the “silent” generation (ages 67 to 85) and the leading-edge boomers. These three groups, he says, will live longer than any generation before them, with many living past age 90 and even 100.

One of the biggest challenges facing this new breed of seniors, he notes, is that few will have the financial resources to support themselves through a longer retirement. “That’s going to put a demand on federal resources, as well as family resources and charitable resources,” he said in an interview. At the same time, people under age 35 are going through some of the hardest economic times since the Great Depression and will have to compete with their elders for limited resources.

McIlwain says this demographic change will have a major impact on the U.S. housing market. The leading-edge boomers are expected to be more healthy, active and independent — which means many will want to remain in their current homes. And those who do move, he says, will be looking for urban locations with smaller and easier-to-maintain housing where they can be close to friends, families, work, transportation and social amenities.

This change could lead to a decline for the estimated 50,000 housing communities across the U.S. providing nursing care for seniors. The recent economic downturn has made those facilities too costly for many families. And given that the average age of someone living in a senior facility is 84, such communities are having difficulty finding new residents.

How will the housing sector change in response? The ULI report says many of today’s seniors and baby boomers are creating new niche housing markets, including multigenerational living, which is rising at a faster rate than overall household growth in the U.S., as well as group living communities. College towns, which allow seniors to enjoy campus activities while being near children and grandchildren, are also expected to see more older residents.

April 2012 Market Outlook

Highlights

  • Despite one “noisy” month, the outlook is for the labor market this year is to remain on track with an increase in job growth over 2011 and a  further acceleration in 2013.
  • The first quarter of 2012 registered the best quarterly payrolls performance since the spring of 2006, despite falling short of expectations.
  • Expect unemployment to decrease further from 8.2 percent in March to 8.0 percent by the fourth quarter.
  • March retail sales showed that consumers continued to spend aggressively, bringing first-quarter sales 2 percent above sales in the previous quarter.
  • Expect 30-year fixed-rate mortgages to gradually increase in the second half of  2012 to about 4.25 percent to 4.50 percent by the end of the year.

What does this mean?  Basically, the party is over for buyers.  While this is still a great time to buy, I am seeing a significant difference from the Greater Boston area market of last year.  Buyers are less apt to “kick the tires” of an endless number of houses and are actually jumping on the houses that they like, often in a multi-bid situation.   As they should.  Prices are starting to climb.  Interest rates are great, but they will not stay that way.

What this means for sellers – you have to price your house right – what that means is look at your competition and price right in relations – and your house will sell.  Faster than it would have last year.

Click here to view the complete April 2012 U.S. Economic and Housing Market Outlook. Freddie Mac compiles data on major economic and housing and mortgage market indicators and offers forecasts based on those indicators.

 

 

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