Spotlight on Lowell

April 26, 2016

So today I did Jury Duty in Lowell.   I’ve been there before, with my friend/client Laura Roberts, who shares my love of grand, older homes. We went on a roadtrip last year to see a particular beauty.  But I hadn’t been to Lowell Center.  I have to say the center is very quaint with the majority of the area consisting of small brick and stone storefronts from the 19th century.  I was pleasantly surprised as I never thought of Lowell as being so quaint.  In my mind, it was a former mill town that lost its reason for being (the mills) and had become a shadow of its former self akin to the Rust Belt.   

The truth is that Lowell is true to itself in that it still has a robust population that is roughly 50% immigrant, who work primarily in construction and industry.  It has not become a ghost town.  The population has, in fact grown by 5% over the past 10 years or so to about 110,000.

So why am I so curious about Lowell?  Because they have some amazing, grand old homes that can still be had for reasonable prices compared to most of the Greater Boston area.  Yet it only took me 35 mins to get from Newton to Lowell.

For a sampling of what your money can buy – here are the most grand houses on the market in Lowell today.

 

 

Beyond the awesome houses, Lowell does have a lot to offer.  An MBTA commuter line, the Merrimack River, a National Park, Universities, Hospitals. The crime rate is reasonable and declining every year.  It is about half what it was 15 years ago and less than the national average.  And I must say that everyone in the courthouse was very nice!

What it doesn’t have is great school rankings.   So it may not be ideal yet for young families looking for a city with good schools.  

As I took a break from Jury Duty, I passed a woman who was shouting to an invisible adversary and then I was approached by a panhandler.  So not exactly gentrified yet.  But I do wonder if it could be down the road as Boston and the surrounding area become too cost prohibitive.  This tight spring market is pushing prices up ever higher and is pricing people out of the area immediately surrounding Boston. 

Lowell would be great for Boomers like myself,  who don’t really want to downsize their homes but would like to cut costs in retirement.  Or for young couples who don’t plan on having children but want a nice big house not too far from Boston.

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

 

THE DIRTY DOZEN THINGS TO KNOW ABOUT BEING A REAL ESTATE AGENT

by Michelle J. Lane

Over the course of my time as a Realtor, I have been presented with many misconceptions about the life of a real estate agent.   The idyllic vision goes something like this – your friend calls you up and say “Let’s go shopping for a house!”   You then have a fun day of traipsing through some lovely homes, your friend wisely chooses whichever one you like best and you both have such a fun time through the process of them buying the house that they love you even more when it is over.   And the bonus is that you get a big, fat check at the end.  What’s not to love about that?

If you search on ‘Becoming a Real Estate Agent’ you will get a lot of good info, some very funny and some serious. Since I still run into misconceptions, I am sharing my version.

If you have a large inheritance or otherwise don’t need to depend on real estate for an income – dive right into the world of real estate and skip the rest of this article. Those of you who need to make a living, read on.

  1. NO SALARY – Real Estate is purely commission based – there is no salary. If you don’t sell, you don’t eat.  I have had people tell me they thought you show up in the morning, the company hands you your leads, you take care of those clients, then come back for more – NOOOOO!!  Occasionally the company will have leads to pass around.   Not a volume that will earn you a living.
  2. LOTS OF EXPENSES – Every cost to run this business comes out of your pocket.  The costs to advertise your listings and to run the office come from your company’s take of your commission.    The rest you pay out of your net commission. What are those fees and expenses?
  • MLS – The fees to be in the Multiple Listing Service
  • Local Real Estate Association fees and dues
  • Errors and Omissions Insurance
  • Business Cards, Envelopes, Stationery
  • Postage
  • Your website
  • Open House Signs
  • Tools to do your job – computer, sales database software, smart phone.
  • Electronic key to get in lockboxes
  • All the automobile costs to drive clients around or meet them at listings. And trust me, you will drive around with many people who will then never buy a house with you.
  • Health Insurance
  1. THOSE BIG, FAT CHECKS ARE NOT SO BIG AFTER ALL:

Let’s say you get a listing for $500,000 and sell it – yeah!  The client thinks you are walking away with 5-6% of that – $25,000-$30,000.  The reality is that gets chipped away pretty quickly.  The chart below gives a rough idea of the breakdown.

commission chart

So how much can you expect to make?  As with all sales professions, the top 10% make the bulk of the money.  The next 20%-30% manage to make a living and the rest are searching under the sofa cushions for spare change.  As a frame of reference, the median income for a real estate agent in MA is $40,000.

  1. DESPERATION will make you your own worst enemy. When you finally do get a lead, you will cling to them like a Bulldog with a tug toy.  You will let them lead the agenda – drive them to see every single house on the market, call them daily…until you realize they aren’t going to buy – at least not with you, not now, maybe never.   A salesperson has to qualify leads.  If you didn’t come from a sales background, you won’t really know how to separate the posers from the real clients and will eventually leave the profession thinking all people suck.   Which leads us to what they think of YOU.
  2. PEOPLE THINK YOU ARE LOWER ON THE FOOD-CHAIN OF  TRUST THAN A USED CAR SALESMAN – The general population does not trust or like real estate agents. Why should they?  The bar to becoming an agent is fairly low.   A week long class, a test, some fees paid and voila! – you are a real estate agent.  Realtors do have to take extra ethics training, but that’s the extent of what it takes to gain entry.   It is possible to be an agent with no experience having bought or sold a house yourself.  So, for every agent who is knowledgeable, experienced, professional and trustworthy there are probably 3 who are not – maybe more – I am just making my best guess on that number.   So prepare to be mistrusted and disliked.  You must have the fortitude and patience to work through that.  Which leads to our next point.
  3. DO YOU KNOW HOW TO BUILD TRUST? This profession is about building trust. In the best case scenario, you will become your clients’ trusted adviser. That takes a good deal of patience and paying attention to what people want and need.   Refer back to Point 3.  Desperation causes you not to listen and push people to hurry up and buy something.  You will become unfairly agitated with them for not moving faster and will curse the day they were born when they fade away without doing a transaction with you.
  4. YOU ARE RUNNING A BUSINESS – This means creating a business plan and a budget, marketing, advertising, managing client relationships and transactions, educating yourself, dressing the part and so much more.
  5. YOU MUST BE TECH SAVVY. You should, at the very least, have a tablet or laptop, and a smart phone and KNOW HOW TO USE THEM.  Your clients do. And you need to use those tools to keep up on the market to be one step ahead of your clients.  If you can find lots of real estate info on the internet, they can too. And they expect you to know more than they do.
  6. THE OTHER AGENTS ARE NOT THERE TO MENTOR YOU – Your sales manager will guide you, get you into training you need and answer your questions, but in the end, making sure you learn what you need to know is on you – it’s your business after all.  Many new agents are afraid to show their manager how much they don’t know, so they ask the more seasoned agents for help.  While most of your fellow agents will help you here and there, they are not being paid to mentor you. They are not being paid at all – for a refresher, refer back to point 1.  In essence, they are your competitors.  Friendly competitors, but competitors nonetheless.
  7. YOUR SCHEDULE IS NOT YOUR OWN – You are like any other small business owner.  You may have some flexibility but you must be available when business is happening.  Which means you will miss events with family and friends. You will have clients wanting to see houses during the day, at night, weekends.  You will be talking to them late at night as you are working to get an offer in on a house.   They will expect you to pick up the phone or respond to a text or email instantly.  We live in a time of instant communications.  And this is the biggest transaction of their lives – they will get anxious and agitated if they cannot get hold of you.
  8. YOU WILL BE TELEMARKETED TO DEATH – There are hundreds of companies out there that will start calling you to let you know how they can give you leads, get your website to the top of the search engines, provide coaching, etc. It reminds me of the gold rush where the real people who made the money were not the gold miners, but the people who sold supplies to the miners.   These companies are preying on your need to get clients and your lack of direction on how to find them.  The upside is you will understand how people feel when they are getting inundated with calls and letter from real estate agents.
  9. SOME PEOPLE DO SUCK – I have seen some buyers and sellers do some really lousy things to good, decent agents. No matter how much you try to qualify them, some people will pretend they are ready to buy or sell just because they want to get free advice or a chauffeured tour of Boston.  Others will try every way possible to use up your time, money and knowledge without paying a commission.  But, if you are good at qualifying, you can minimize that.  Being able to minimize that means having a robust business that gives you the ability to say, “No Thanks” to those people – at least the ones that set off your Spidey senses. Some are going to slip through. I have seen agents become bitter after working with too many of the sucky people.  When you are in sales, you have to learn to kick a chair, swear a bit, learn from the experience, and get back to your business.

I will say, for every sucky person out there, I have met so many more that are wonderful, sweet, trusting and want to have people they work with earn a fair fee for their work.  And I have been fortunate to have them as my clients.

After reading this list you might ask why in the in the world I do this.  Because it is rewarding both emotionally and financially.  I feel honored to be part of the biggest financial and lifestyle choice that my clients make and I feel that my work matters.  I enjoy the independence and the fact that my work is directly tied to results.  My fate is completely in my hands.  The upside potential is huge and I can do this until I just don’t feel like it anymore – no one is going to lay me off.  I am fortunate to have had good sales training before switching professions.  Love ‘em or hate ‘em, Microsoft knows how to sell and they taught me the fundamentals of consultative selling which has been the foundation for a great real estate business.

So if this list has not scared you off,  welcome to the world of Real Estate!

Michelle J. Lane

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

Real Estate Provisions in “Fiscal Cliff” Bill

Wondering how the fiscal cliff will affect your real estate transactions in 2013?

ImageOn Jan. 1 both the Senate and House passed H.R. 8 legislation to avert the “fiscal cliff.” The bill was signed into  law by President Barack Obama on Jan. 2.  For the most part, the end result is the status quo.

Below is a summary of real estate related provisions in the bill:

Real Estate Tax Extenders

  • Mortgage Cancellation Relief is extended for one year to Jan. 1, 2014
  • Deduction for Mortgage Insurance Premiums for filers making below $110,000 is extended through 2013 and made retroactive to cover 2012,
  • 15-year straight-line cost recovery for qualified leasehold improvements on commercial properties is extended through 2013 and made retroactive to cover 2012
  • 10 percent tax credit (up to $500) for homeowners for energy improvements to existing homes is extended through 2013 and made retroactive to cover 2012

Permanent Repeal of Pease Limitations for 99% of Taxpayers

Under the agreement so called “Pease Limitations” that reduce the value of itemized deductions are permanently repealed for most taxpayers but will be re-instituted for high income filers. These limitations will only apply to individuals earning more than $250,000 and joint filers earning above $300,000. These thresholds have been increased and are indexed for inflation and will rise over time. Under the formula, the amount of adjusted gross income above the threshold is multiplied by three percent. That amount is then used to reduce the total value of the filer’s itemized deductions. The total amount of reduction cannot exceed 80 percent of the filer’s itemized deductions.

These limits were first enacted in 1990 (named for the Ohio Congressman Don Pease who came up with the idea) and continued throughout the Clinton years. They were gradually phased out as a result of the 2001 tax cuts and were completely eliminated in 2010-2012. Had we gone over the fiscal cliff, Pease limitations would have been re-instituted on all filers starting at $174,450 of adjusted gross income.

Capital Gains

Capital Gains rate stays at 15 percent for those in the top rate of $400,000 (individual) and $450,000 (joint) return. After that, any gains above those amounts will be taxed at 20 percent. The $250,000/$500,000 exclusion for sale of principal residence remains in place.

Estate Tax

The first $5 million dollars in individual estates and $10 million for family estates are now exempted from the estate tax. After that the rate will be 40 percent, up from 35 percent. The exemption amounts are indexed for inflation.