Massachusetts Home Buyer Guide

Season of Giving

It is such a hectic time of year that we all sometimes forget that many people could really use some holiday cheer now and throughout the year.

If you've been thinking about contributing to a worthy cause this holiday season, here are some tax-deductible charities to consider.

Operation USO Care Package: Operation USO Care Package enables the public to express their support of our brave and dedicated men and women in uniform (read testimonials). Sponsoring a care package and including a personal message provides individuals with a way to touch the lives of our deployed troops around the world. Donate online.

Rebuilding Together: Rebuilding Together is the nation’s leading organization bringing volunteers and communities together to improve the homes and lives of low-income homeowners by providing free repair services for those with the greatest need. Low-income homeowners, particularly those who are elderly, displaced or disabled, and families with children are most at risk. Donate online.

Floating Hospital For Children: Floating Hospital for Children is the full-service children's hospital of Tufts-New England Medical Center and the principal teaching hospital of Tufts University School of Medicine. Floating Hospital offers a comprehensive range of services from prevention and primary care to the most sophisticated treatment of rare and unusual conditions. Its focus and mission every day is to improve the lives of children and their families. Donate online.

Catholic Charities - Boston: For more than 100 years, Catholic Charities has continued its mission of building a just and compassionate society rooted in the dignity of all people. As one of the largest providers of social services in Massachusetts, Catholic Charities offers approximately 140 programs and services in 40 locations from Lawrence to Brockton and Natick to Boston. Nearly 200,000 people are helped each year regardless of faith. Donate online.

New England Shelter for Homeless Veterans: The Mission of the New England Shelter for Homeless (NESHV) Veterans is to extend a helping hand to homeless men and women veterans who are addressing the challenges of addiction, trauma, severe and persistent mental illness, and/or unemployment and who will commit themselves to sobriety, non-violence, and working for personal change. NESHV is recognized as one of the most effective private veteran's transition programs in the country.
Donate online.

Former Fed Chairman Greenspan Speaks Out

Former Federal Reserve Chairman Alan Greenspan said Global forces beyond the Federal Reserve's control helped fuel the bubble that led to the current housing slowdown, National Public Radio reported December 14, 2007.

He also said that the odds of a recession are "clearly rising."

Greenspan wrote an opinion piece in The Wall Street Journal  looking at the roots of the current mortgage crisis. In the article, he defended the Fed's decision to keep rates low, a move that some economists and Wall Street veterans believe fueled the housing bubble.

Of course, none of them were complaining at the time.

Listen to the Greenspan Interview on NPR

Check Your Credit Report For Errors

We all know that maintaining good credit is critical, especially in this lending environment, but even if you do your part a creditor might not be doing its job correctly.

A short article in the December Money magazine discusses consumer rights under the Fair Credit Reporting Act and provides tips to make sure errors in your credit report are corrected.

"A recent study by the U.S. Public Interest Research Group found that 25 percent of credit reports have mistakes serious enough to cause a denial of credit. With today’s tighter loan standards, it’s critical to make sure your report is up to snuff."

Read The Money Magazine Article

Massachusetts October Home Sales Data

In October, Massachusetts single-family home sales declined more than 11 percent compared to October 2006, according to the Massachusetts Association of REALTORS®.

Condominium sales dropped 13.2 percent.

The median price of a single-family house in the Commonwealth declined 3.2 percent, and the median price of condos fell more than 7 percent.

The inventory of residential properties (detached single-family homes and condos) on the market as of October 31, 2007 decreased 14 percent compared to the same time last year (from 60,150 listings in 2006 to 51,993 listings in 2007).  At the current sales pace, this represents approximately 11.9 months of supply, a decrease from 12.2 months of supply in October 2006.  October was the 10th straight month that year-over-year supply levels have gone down.

Read The MAR November 27, 2007 Press Release

'Flip This House' Scam

An Atlanta television station did an investigative report about six months ago on the popular A&E reality television show "Flip This House."

Apparently a former host of the show allegedly wasn't flipping the homes on the show and very little that happened on the show was based on reality.

I've posted the two-part investigative series below. 

Part I:

Part II:

Politically Correct Subprime

Mortgages apparently have gone "green."

The Boston Globe reported November 15, 2007 that so-called green mortgages have "taken root." The theory is that the money you'll save on energy from "solar panels, improved insulation, thermopane windows, and other money-saving products" will allow you to qualify for a larger mortgage loan.

This product sounds like politically correct subprime lending to me.

How long before some subprime lender comes out with a green mortgage that doesn't require you to actually document having solar panels and the rest? Or how about an interest rate that adjusts after the solar panels are installed?

"The concept is still in its infancy. And the mortgages are easier to secure at large-scale housing developments that incorporate 'green building' construction where energy savings have been documented by engineers. Green financing is harder to come by for energy-efficient, privately owned, single-family homes, since the savings are more difficult to calculate and must be done on a case-by-case basis.

"But energy-efficiency advocates, lenders, and housing activists say green mortgages are a small but significant step toward making homes more affordable and reducing dependence on nonrenewable energy sources."

Sounds to me like the "energy-efficiency advocates" just believe someone who is willing to invest in green housing must be a better credit risk than other home buyers. Should people who own an "Inconvenient Truth" get money back at closing?

If I keep my thermostat at three or four degrees lower on average than the guy with solar panels, I might save just as much money.

As for making housing more affordable, that's absurd. Many people would love to make their homes more energy efficient and environmentally friendly, but the cost many times outweighs the savings, certainly over the short term (less than 5 years).

Don't get me wrong, I am all for everyone doing what they can to preserve the environment, but so many ideas promoted by so-called "energy-efficiency advocates" [you can't make this stuff up] and their comrades have more to do with rewarding politically correct behavior than actually saving the planet.

Finders Keepers

A contractor who found collectible cash worth about $500,000 in metal boxes hidden between the studs of a bathroom that he was renovating is suing the home owner to keep the money, after rejecting her offer of 10 percent, The Plain Dealer, a Cleveland newspaper, reported on December 12, 2007.

Bob Kitts was working on the 83-year-old home near Cleveland, owned by a high school friend, Amanda Reece, who was away at the time.

After he found the first box, the contractor called the home owner who rushed home. Together they found four more boxes full of cash and religious memorabilia. Appraisers determined that much of the more than $100,000 in depression-era cash were collectible rare 1929-series Cleveland Federal Reserve bank notes, worth about $85 each.

Apparently the money can be traced back to a businessman who owned the home during the Great Depression. The businessman apparently died unmarried and childless. I smell a great niece making an appearance in court soon.

The contractor claims he found lost money and Ohio law says it’s finders keepers, if there’s no owner likely to appear to collect the treasure.

The home owner says the money is hers and the contractor is just trying to “shake” her down. You think?

At this point it looks like a judge will have to decide.

I can't help thinking like a lawyer when I hear stories like this one. Maybe anyone who owns an old home should include a clause in any contracts with contractors spelling out that anything found anywhere in the home or on the property belongs to the home owner.

Of course, this contractor never had to tell the home owner he even found the metal boxes.

Read The Plain Dealer Article

Haverhill, MA Welcomes High-Tech Business

A Massachusetts High Technology Council survey of the most business-friendly communities in Massachusetts for high-tech companies ranked Haverhill, MA 29th, a jump from 244th from last year's rankings, The Eagle-Tribune reported  November 27, 2007.

Abington, MA ranked No 1 and North Andover, MA ranked No. 2 on the "MassTrack" list. Boston placed 35th. The top 35 communities are as follows:

Rank Town

1 Abington

2 North Andover

3 Uxbridge

4 Grafton

5 Canton

6 Walpole

7 Medway

8 Athol

9 Shrewsbury

10 Douglas

11 Palmer

12 Hingham

13 Leominster

14 Billerica

15 Natick

16 Attleboro

17 Revere

18 Dalton

19 Burlington

20 Chelmsford

21 Mansfield

22 Hopkinton

23 Boxborough

24 North Reading

25 Asland

26 Franklin

27 Dracut

28 Sutton

29 Haverhill

30 Lowell

31 Amesbury

32 Westwood

33 Newburyport

34 Upton

35 Boston

Mortgage Interest Rates Rise

Average rates on U.S. 30-year, fixed-rate mortgage loans rose to 6.11 percent compared to 5.96 percent the previous week, CNN Money reported December 13, 2007.

The 5.96 percentage rate was the lowest in more than two years. Last year at this time rates averaged 6.12 percent.

"'November's employment report showed stronger job growth, no change in the unemployment rate and a jump in wages, suggesting to some market participants that the probability of an upcoming recession might be lower than originally thought,' Freddie Mac chief economist Frank Nothaft said in a statement."

Read The CNN Money Article

Mortgage Applications Climb Again

The number of U.S. mortgage applications rose 2.5 percent compared to the previous week, Reuters news service reported December 12, 2007.

The data from the Mortgage Bankers Association indicated an increase in its seasonally adjusted index to 811.8, the highest level since July 2005. Demand for both purchase and refinance loans boosted the index.

Read The Reuters Article

Free Investment Property Analysis

The free widget below provides a basic analysis of a property's investment potential. Of course, a paid version also is available and provides more flexibility, but the free version below is pretty good.

I tell clients new to investment properties who want to take a conservative (and I would suggest smart) approach to investing in real estate, such as a multi-family property, to assume rental property will be rented 45 months out of the next 60 months (on average nine months per year). For example, if the rental income is $2,400 per month, then multiply $2,400 by nine to get a conservative estimate of annual income.

Your property may be fully rented in the first two years, but vacant nine months in year three. You just can't predict it. If it does better than that, well, you have that much more cash to invest in your second property.

Of course, if you plan to occupy a part of the property, then your analysis would be a little different. If it is a commercial property, and you are certain you can obtain a long-term lease with a financially solid tenant (two big "ifs"), using 45 months rented out of the next 60 for your analysis might be too conservative.

Powered by iAnalyzeREI: Real Estate Investment Analysis

Mortgage Interest Rates Plummet

Not since September 2005 have interest rates been this low.

Average rates for 30-year, fixed-rate mortgage loans fell to 5.96 percent compared to the 6.10 percent average rate the previous week, the Associated Press reported December 6, 2007.

With home prices down and the slow winter market upon us, these rates make it a compelling buyers market. Waiting until the spring might not pay off.

Rates on 15-year, fixed-rate mortgage loans, a popular choice for refinancing, slid to 5.65 percent, from 5.73 percent the previous week.

Read The Associated Press Article

Britney Spears Explains 'Housing Bubble'

This 10-minute video mash up featuring Britney Spears video footage is funny, but about six minutes too long for me. The video uses Britney Spears lyrics to explain the so-called "housing bubble."

Oh, come on now. You know you want to see it. Tell me how long you watched before you could tear yourself away.

Mortgage Applications Surge

With interest rates at two-year lows, U.S. mortgage applications surged 22.5 percent compared to the previous week, Bloomberg.com reported December 5, 2007.

Consumers refinancing led the way in applications (32 percent rose), but home-purchase loans also rose a strong 15 percent.

"Subprime borrowers, including those with poor or patchy credit histories who took out adjustable-rate mortgages, face a wave of resets in the coming year, giving them the incentive to refinance."

The Mortgage Bankers Association provided the data.

Read The Bloomberg.com Article

Most Expensive Home For Sale In Andover, MA

The most expensive home for sale in Andover, MA listed on the MLS as of December 5, 2007 was a yet-to-be-built 13-room colonial featuring more than 5,000 square feet, 4.5 bathrooms, a five-car garage and nearly two acres.

This custom-built, new construction home was listed at $3.075 million. The lot is near Phillips Academy. As of December 5, 2007, the home had been on the market for 131 days without a price change.  That isn't unusual for new construction.

Not too shabby!

See more photos.

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