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Inventory a bright spot or housing recovery giant blind spot

 
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RealEstateCafe



Joined: 11 Dec 2007
Posts: 234
Location: Cambridge, MA

PostPosted: Sat Apr 26, 2014 3:56 pm GMT    Post subject: Inventory a bright spot or housing recovery giant blind spot Reply with quote

Q: Is growing inventory a bright spot or was housing recovery a giant blind spot? http://bit.ly/BlindRESpot
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Bill Wendel
The Real Estate Cafe
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RealEstateCafe



Joined: 11 Dec 2007
Posts: 234
Location: Cambridge, MA

PostPosted: Mon Apr 28, 2014 12:59 am GMT    Post subject: Reply with quote

Cross-posting links shared on Boston.com's original blog post:

A bright spot for buyers
http://bit.ly/SFsUp

REALmaven, Not sure what UHSs are, so I shouldn't agree too quickly but invite you and other BREN readers to undertake this three step reading assignment to address your question:

Step 1. Read this Retro real estate spin and count your blessings that you have NOT won any of the bidding wars that are driving prices $50K- $100K+ over asking price:
http://bit.ly/RESpin2008

2. Then check out any of these insider opinions and think about REALmaven's question:

The Housing Recovery that Never Was Is Over
http://bit.ly/REconOver

Why The Housing Market Is No Longer A Good Investment
http://bit.ly/NotGoodInvst

Banker & Tradesman publisher Tim Warren's cautionary advice re over bidding
http://bit.ly/BewareBiddingWars

Robert Shiller Explains Irrational Exuberance, Again
http://bit.ly/REDillusion

3. Finally consider our modest attempt at counter intelligence, bonus points for any BREN readers willing to offer an opinion on whether RedSpin is part of the solution or part of the problem:

Is growing inventory a bright spot or was housing recovery a GIANT BLIND SPOT?
http://bit.ly/BlindRESpot

BOTTOM LINE:

Time to call for an Emergency Bidding War Transparency Act before more home buyers get manipulated by the real estate industry's BLIND BIDDING PROCESS?
http://bit.ly/BidWarREAct
_________________
Bill Wendel
The Real Estate Cafe
Serving a menu of money-saving services since 1995
97a Garden St.
Cambridge, MA 02138
617-661-4046
realestatecafe@gmail.com
http://realestatecafe.com/blog
http://twitter.com/RealEstateCafe
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Richthofen



Joined: 02 Apr 2014
Posts: 69

PostPosted: Mon Apr 28, 2014 8:27 pm GMT    Post subject: Reply with quote

The graph that really got me was this one:
http://www.doctorhousingbubble.com/wp-content/uploads/2014/04/New-Home-Sales-by-Region.jpg

Northeast is still selling new homes at a positive clip. I think, but don't have the data handy to back it up, that the northeast tends to lag national trends because the northeast is more 'built-out'.

I'm still seeing 100+ people at open houses, and houses are going for over asking. That's existing real estate inside the 128-belt.

I'm sure you go out to Worcester or other points west, and things are different.
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PostPosted: Mon Apr 28, 2014 8:41 pm GMT    Post subject: Reply with quote

When you say, "I'm still seeing 100+ people at open houses," can you be more specific:

What price range,
property type, and
where?

South End, Brookline, Cambridge, Somerville?

We've been working with a buyer in Arlington, one bid deadline had only one offer, their own; and on another where there were no offers.
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RealEstateCafe



Joined: 11 Dec 2007
Posts: 234
Location: Cambridge, MA

PostPosted: Mon Apr 28, 2014 8:51 pm GMT    Post subject: Reply with quote

Sorry, previous comment was posted by RealEstateCafe. Please be aware that it wasn't too long ago that there were no shows at open houses, so if you want to time your home purchase when there is less competition, this graph -- presented last May by the chief economist at the National Association of Realtors, clearly shows what happens when government incentives and the HERD MENTALITY we're witnessing in the current speculative cycle, pull demand forward:

http://bit.ly/RESpikes

Bill
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Bill Wendel
The Real Estate Cafe
Serving a menu of money-saving services since 1995
97a Garden St.
Cambridge, MA 02138
617-661-4046
realestatecafe@gmail.com
http://realestatecafe.com/blog
http://twitter.com/RealEstateCafe
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Richthofen



Joined: 02 Apr 2014
Posts: 69

PostPosted: Mon Apr 28, 2014 9:27 pm GMT    Post subject: Reply with quote

I'm looking in Arlington, Belmont, Cambridge, Somerville, (West) Medford, Watertown, and perhaps East Waltham. $450k house abutting Tufts this weekend had a LOT of traffic. It was nice, but not nice enough to get outbid by everyone else.

Your buyer in Arlington is likely at the 550k->600k range. I'm at the $450k price point. The people that can go north of $500k, there's just not a lot of them. Most of the buyers have 2 incomes of 75K+, but have student loans, etc... they're capped out right around where I am, sub-500k.
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RealEstateCafe



Joined: 11 Dec 2007
Posts: 234
Location: Cambridge, MA

PostPosted: Mon Apr 28, 2014 10:06 pm GMT    Post subject: Reply with quote

The price point you are describing seems to fit this blog post today on Boston.com that featured one of our scatterplots:

[/url]http://bit.ly/SweetRESpot[url]

Have you done any scenarios planning, and considered letting the current speculative cycle pass? No one knows when interest rates will rise, but when they do, I firmly believe history will look dismiss this "recovery" as real estate's equivalent of the STEROID ERA in baseball.

Homebuyers are playing with "juiced" bids pumped up by artificial stimulants. Wish there had been more on that in today's WBUR / NPR program, but the rebroadcast from 7-8pm tonight on 90.9fm should be worth listening to nonetheless.

Any BostonBubble readers want to MeetUp at iYo Cafe in Somerville to listen together, and use the blackboard in the back room to develop our own talking points? Here's what NPR listeners around the country are saying:

http://bit.ly/REStalled

A
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Bill Wendel
The Real Estate Cafe
Serving a menu of money-saving services since 1995
97a Garden St.
Cambridge, MA 02138
617-661-4046
realestatecafe@gmail.com
http://realestatecafe.com/blog
http://twitter.com/RealEstateCafe
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RealEstateCafe



Joined: 11 Dec 2007
Posts: 234
Location: Cambridge, MA

PostPosted: Mon Apr 28, 2014 10:08 pm GMT    Post subject: Reply with quote

Corrected TYPO on broken link above:

Boston.com: For condo sellers, a pricing sweet spot
http://bit.ly/SweetRESpot
_________________
Bill Wendel
The Real Estate Cafe
Serving a menu of money-saving services since 1995
97a Garden St.
Cambridge, MA 02138
617-661-4046
realestatecafe@gmail.com
http://realestatecafe.com/blog
http://twitter.com/RealEstateCafe
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Richthofen



Joined: 02 Apr 2014
Posts: 69

PostPosted: Tue Apr 29, 2014 12:18 am GMT    Post subject: Reply with quote

If interest rates rise and prices fall, say, next year, that helps with % down but doesn't help much with monthly payments / affordability. We probably don't have much choice but to wait it out; I'm not sacrificing the neighborhood (been there, done that). It's tough.
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AnonBH



Joined: 30 Apr 2014
Posts: 1

PostPosted: Wed Apr 30, 2014 6:54 pm GMT    Post subject: Reply with quote

Richthofen wrote:
If interest rates rise and prices fall, say, next year, that helps with % down but doesn't help much with monthly payments / affordability.


Still...it's far better to have the same high monthly payment/affordability problem with a smaller principal component & larger interest component. That way if your income rises (even if due to inflation) you can pay off the mortgage sooner, dramatically reducing your total long run cost.
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PostPosted: Wed Apr 30, 2014 10:15 pm GMT    Post subject: Reply with quote

Richthofen wrote:
I'm looking in Arlington, Belmont, Cambridge, Somerville, (West) Medford, Watertown, and perhaps East Waltham. $450k house abutting Tufts this weekend had a LOT of traffic. It was nice, but not nice enough to get outbid by everyone else.

Your buyer in Arlington is likely at the 550k->600k range. I'm at the $450k price point. The people that can go north of $500k, there's just not a lot of them. Most of the buyers have 2 incomes of 75K+, but have student loans, etc... they're capped out right around where I am, sub-500k.


$600K in Arlington will buy you a mediocre house, probably with oil heat, probably < 1500 SF, no garage, 1.5 baths. In truth, I can afford $600K and have been looking in Arlington & the usual inner 'burbs with good schools. It's slim pickings, and I'm sitting on my $200K down payment until the market gives me something that's worth my hard-earned money. Some of us who can afford > $500K have decided to sit out this latest frenzy. I'm done with this crap, for now.

Half a house (i.e., a condo in a side-by-side 2 family, new construction) across the street from me, in a congested part of Arlington, just sold for well over $700K.
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