Massachusetts Home Buyer Guide

U.S. Pending Home Sales Decline

The National Association of REALTORS® (NAR) U.S. Pending Home Sales Index slipped 1.9 percent in February to 84.6 from an upwardly revised reading of 86.2 in January 2008; however, the index was 21.4 percent lower than in February 2007.

The index is a forward-looking indicator based on contracts signed in previous months. The NAR expects a stronger market in the fourth quarter of 2008.

"Existing-home sales are likely to rise from an annual pace of 4.9 million in the first quarter to 5.9 million in the fourth quarter.  With relatively weak activity in the first part of the year, existing-home sales for all of 2008 are forecast at 5.39 million, increasing 6.6 percent to 5.74 million in 2009."

Of course, the above projections are for the nation. State and local real estate sales will vary.

Read The NAR Press Release.

Mortgage Interest Rates Unchanged

Average U.S. 30-year, fixed-rate mortgage interest rates remained unchanged from the previous week's 5.88 percent, United Press International reported April 10, 2008.

A year ago the same loan stood at 6.22 percent.

Read The UPI Article

Mortgage Applications Rise 5.4 Percent

U.S. mortgage applications rose 5.4 percent compared to the previous week, USA Today reported April 9, 2008.

The rise in applications followed a steep decline the previous week.

Read The USA Today Article

Consider The Costs Of Buying / Owning A Home

An April 10, 2008 post on Bankaholic discussed the various costs of buying and owning a home, and how one should carefully budget for such a major financial event.

The post contains simple, but sound, advice, such as the following.

"A good question to ask yourself before contacting your local banker to discuss a loan is, ‘how much is too much?’ While you might be tempted to try and get as much money as possible if you can find a good rate, you do not want to make the mistake of taking on a loan so big that your finances will be stretched to the point that you cannot make your payments."

Read The Entire Bankaholic Post

New Jumbo Loans

As part of the recently implemented economic stimulus package, home buyers will be able to borrow and homeowners will be able to refinance larger loans approved by the Federal Housing Administration (FHA), the Boston Herald reported March 30, 2008.

"Depending on the location of the property you want to buy or refinance, you can now get an FHA-insured mortgage for as much as $729,750 with a 3 percent down payment. You can also apply for loans designated for funding by Fannie Mae and Freddie Mac up to that amount - or 125 percent of your area’s median home price - but with larger down payments of at least 10 percent."

The previous amount was $417,000.

"Absent congressional action, the limits will drop back to $417,000 for Fannie and Freddie, and to $362,790 for FHA, beginning New Year’s Day. In the meantime, there should be plenty of jumbo mortgage money available for anyone who can afford it."

Among other conditions, you'll need a minimum of 10 percent for a down payment, and you need a minimum credit score of 700, if you're putting down less than 20 percent.

Read The Boston Herald Article

Home Prices Not The Only Real Estate Declining

A post on The Boston Globe's real estate blog April 4, 2008 indicates prices for parking spaces in the City of Boston have declined along with the housing market.

"The average sales price of a spot in downtown Boston was $68,455 in 2007, down considerably from an average of $92,810 in 2006"

The data comes from Listing Information Network, a Boston-based multiple listing service.

"As with housing, prices remain considerably above levels at the turn of the century, when the average spot cost about $45,000."

The Boston Condo Blog has listings for parking spaces in Boston.

Read The Boston Real Estate Now Post

Higher-priced Homes In Boston Hold Value Better

According to a new report by Zillow.com, higher-priced homes across the U.S. depreciated more than lower-priced homes, but higher-priced homes in the Greater Boston Area held their value better than the national average, REALTOR Magazine Online reported April 3, 2008.

"Nationally, higher valued homes, representing the top 20 percent of the market, have seen values decline more significantly than lower valued homes. Homes in the top quintile declined 7.5 percent from 2006 while bottom quintile homes depreciated least, down 0.7 percent."

Read The REALTOR Magazine Online Article

First-time Home Buyer Seminar A Success

Our first home buyer seminar yesterday at the Best Western in Haverhill was a great success. We had about 20 very attentive people attend and an experienced group of speakers.

I'd like to thank Rob Barr from VIP Mortgage, Josh Amsler from Jackson Home Inspection, Jeff Stelman from Shribman & Stelman, LLP and Dave Kres from Buyers Brokers Only, LLC for their participation.

We also raised more than $100 for charity. Thank you to everyone who attended. I hope you learned a lot.

We hope to have another seminar in late September or early October, so stay tuned.

With home prices down around Massachusetts from about 5 to 15 percent, depending on the city or town, first-time home buyers have a lot of options.

An April 1, 2008 article in the Boston Globe provides the following advice for first-time home buyers.

"Work with a buyer's agent who only represents you, not the seller. Neophytes especially need someone who can help them analyze the local market, negotiate a good price, and close the deal."

Read The Boston Globe Article

Buying Tips For The Spring Market

In the Boston Herald's Spring real estate section April 4, 2008, an article by reporter Paul Restuccia discussed "some unusual pitfalls that house hunters need to watch out for."

I discussed foreclosures with Paul on Tuesday April 1, 2008.

"Foreclosures. Richard Rosa of Haverhill’s Buyers Brokers Only said purchasers should exercise care when looking at foreclosed homes.

“'Some bank-owned properties can be good deals, but almost all of them need work,' he said. 'If you don’t have the money to fix them up after you buy, the work will never get done.'”

“Short sales. Also use caution with 'short sales,' where a lender agrees to let a homeowner sell a home for less than the mortgage balance.

"Rosa got a bank to accept a $380,000 offer on Revere home with a $550,000 mortgage balance, but said lenders can take months to sign off on such deals."

Find foreclosed listings and short sales at MassForeclosed.com

Gary Dwyer, a buyer agent in Boston, had some good advice about purchasing homes that have been "rehabbed."

"When looking at rehabbed properties, beware of what Gary Dwyer of Buyer Agents of Boston calls 'caulk-and-spackle' renovations: Cosmetic work that merely covers up problems."

I have seen many properties marketed as "like new" that have had poorly done renovations.

Read The Boston Herald Article

Historical Mortgage Interest Rate Data

Freddic Mac provides historical data on mortgage interest rates on its Web site dating back to 1971.

Be sure to check out interest rates in 1982.

Foreclosure News, Data And Listings

Just a quick reminder that foreclosure news, data and listings of bank-owned properties and short sales are available for free at MassForeclosed.com.

What Communities Are Worth Buying In?

The Boston Herald put together a special section April 4, 2008 on the Spring real estate market, including an article about places "worth spring-ing for."

Reporter Paul Restuccia did a great job. I spoke with Paul a couple of days ago  about the real estate market north of Boston.

Paul spoke with several buyer agents and buyer brokers to find out the places where potential home buyers could get a deal. I recommended Tewksbury, MA and Haverhill, MA.

"Broker Richard Rosa of Buyers Brokers Only likes Haverhill and Tewksbury this spring.

"He said Tewksbury’s median house prices have fallen 13.5 percent since 2005 to reach a modest $328,500. 'You can get a decent-sized house for a decent price in Tewksbury, and it’s an easy commute for those working in the Route 93-128 corridor,' Rosa said.

"As for Haverhill, median house prices there have fallen some 9 percent since 2005 to about $300,000.

"Add in a revitalized downtown and Haverhill offers 'both the city and the suburb,' Rosa said."

I also suggested a good deal.

"Unit 8, 48 Farrwood Drive, Haverhill. This two-bedroom, 2,100-square-foot condo costs $249,900, or just $119 a square foot. The unit offers two deeded parking spots, a new roof, a new heating system and new windows."

Other buyer agents/brokers suggested (Metro West) Needham, Natick (south of Boston), Plymouth and Norwell. In Boston Proper, Brighton and the Savin Hill section of Dorchester were suggested for condos, and Hyde Park's Fairmont Hill section for single-family homes.

Read The Boston Herald Article

Mortgage Interest Rates Rise Slightly

Average rates for 30-year, fixed-rate mortgage loans increased slightly to 5.88 percent, up from 5.85 percent from the previous week, United Press International (UPI) reported April 3, 2008.

The 30-year, fixed-rate mortgage averaged 6.17 percent a year ago.

The data comes from Freddie Mac.

Fifteen-year, fixed rate mortgages rose to 5.42 percent, up from 5.34 percent. A year ago the same loan averaged 5.87 percent.

Read The UPI Article

Mortgage Applications Fall Sharply

After a spike in mortgage applications the previous week, U.S. mortgage applications declined 28.7 percent, CNN Money reported April 2, 2008.

The data comes from the Mortgage Bankers Association

The volume of refinance applications fell 38.1 percent, while purchase volume slide by 11.8 percent. Refinance applications accounted for 53.4 percent of total applications.

Read The CNN Money Article