bostonbubble.com

[Guest123]

Surprised by the low volume of posts, there should be lots of anecdotal stories on lower ask prices coming up

Although, last cycle it took 1 year for prices to start declining... if quarantine ends soon, we may bounce back quickly

[Guest]

[RealEstateCafe]

@Guest123 Thanks starting thread. See graph cross-posted on LinkedIn:
https://bit.ly/CovidRE_SavingsLKndIN_April22

+ + +


#Covid_ImpactRE: "Official sources" won't release April stats for another month but #RealEstateCafe doing #MLSnapShots to help buyers save money

#MLS sales across MA 1st 22 days of April show 1 in 5 sellers reducing price, twice that number of buyers negotiating savings

Fellow Buyer agents, what are you seeing in your client work or local markets? Are "official sources" and real estate press under-reporting market changes?

Homebuyers, what's your take? Got any questions you'd like us to answer using MLS data? Invite you to respond below or via original Tweet.

https://bit.ly/CovidRE_SavingsApril22
_________________
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

[Guest]

I'm not looking that much but I do peruse from time to time and get daily listings from Zillow.

So far, I'm not seeing much of a drop in prices. For example, this condo in Malden that sold for 240K in 2014, was listed for 325K in 2017, and is back on market for $409K. Interestingly, the Zillow price history does not include that it sold in 2018 for 355K. I had to go to the city property database to find that, and then saw it on a realtor.com listing for the same property:

https://www.zillow.com/homedetails/22-Parker-St-APT-6-Malden-MA-02148/56519309_zpid/

Maybe things will change in fall 2020 or spring 2021?

[bsg61]

Not sure how that posted twice and I don't know how to edit it. Admin, feel free to delete the duplicate post. Thanks.

[RealEstateCafe]

Guest, thanks for your post. Unlike stocks, real estate prices have changed slowly in past boom / bust cycles but we've never seen anything like this:

#Covid_ImpactRE: #MLS sales volume down 36% across MA YOY last WK of April (4/23-30/20); Nearly every price tier $1M+ over down at least 40% but sales under $300K HIT HARDER

ONLY 2 tiers down 20% or less
$400-449K = 20% off
$700-799K = off 8%

OUTLIER
$1.5-1.9K = UP 37%

Invite comments below or on LinkedIn, or Twitter where you'll see three tables comparing market activity by price range YOY.

DISCUSS: Buyers & sellers, what do you make of these numbers? Think this is a short term plunge, or has Covid19 exposed a long overdue #RETippingPoint? If you could make the MLS data speak, what would you ask?


https://bit.ly/LastWKApril_BosRESales
_________________
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

[bsg61]

I think that you are correct, that Covid-19 was the catalyst. Historically have home prices ever doubled so quickly in the years after 2008? Fed repression of interest rates helped.

Interestingly, that Malden property I posted above is now "pending".

[RealEstateCafe]

@bsg61: Here are a couple of search results to address your question. The first quote, from July 2019, validated my guess, namely that housing prices rose faster in the 1980's than they have in the most recent two boom / bust cycles in Boston:

"Adjusted for inflation, house prices in Boston, after falling 25% during the housing bust, are back where they were during the peak of the prior housing bubble, and are up 228% from 1960."

https://bit.ly/AmericanDream_DIES

+ + +

This timeline puts Boston in a national perspective for the past two boom / bust cycles:

https://en.wikipedia.org/wiki/Case%E2%80%93Shiller_index#/media/File:Case_Shiller_indice_20_villes.jpg

The Case Shiller Index did not exist in in the 1980's but cofounder Chip Case taught at Wellesley College. An excerpt by @RealEstateCafe's blog from six years ago (May 2014) puts today's overheated housing market and bidding wars into historic context. Invite Boston Bubble readers to discuss whether it's time to update their assumptions about pricing in a post-Covid housing market where 4 out of 5 buyers have suspended their house hunts:

EXCERPT:

"Writing twenty-five years ago in The Behavior of Home Buyers in Boom and Post-Boom Cycles, Nobel-prize winning economist Robert Shiller and fellow housing economist Chip Case made this observation:

“…we see a market-driven largely by expectations. People seem to form their expectations on the basis of past price movements rather than any knowledge of fundamentals. This increases the likelihood that price booms will persist as homebuyers in essence BECOME DESTABILIZING SPECULATORS!”

That was when just 6 to 10% of homes selling over asking price was considered overheated. The Cambridge housing market was at that pace in 4Q2010; but by 4Q2013, the pace increased ten-fold to 60% over asking price. And last month it rose to 75%."

FULL TEXT: http://bit.ly/FoolishBids
_________________
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

[bsg61]

Thanks for that info, Real Estate Cafe.

I read recently on the same website with your posted article "Where the American Dream goes to Die..." that JP Morgan recently pledged up to a billion to buy single family homes. It seems the difference from the 1980s and the current decade since 2008 is the increasing financialization of the housing market that treats houses as commodities. There was a time when a house was considered a place to call home, a place to live and possibly raise a family, not a place to accumulate wealth. Sure, there have always been wealthy landlords but it seems like it's gotten much worse in recent memory.

A google of "corporations buying up housing" brings three articles from the last two years, the most recent from the New York Times on 3/04/20:

A $60 Billion Housing Grab by Wall Street
https://www.nytimes.com/2020/03/04/magazine/wall-street-landlords.html
"Hundreds of thousands of single-family homes are now in the hands of giant companies — squeezing renters for revenue and putting the American dream even further out of reach."

Atlantic Monthly:
https://www.theatlantic.com/technology/archive/2019/02/single-family-landlords-wall-street/582394/
When Wall Street is Your Landlord

Wall Street Journal:
https://www.wsj.com/articles/investors-are-buying-more-of-the-u-s-housing-market-than-ever-before-11561023120
"Investors Are Buying More of the U.S. Housing Market Than Ever Before
Their interest poses a challenge for millennials and other first-time buyers"

In 2009 I remember reading an article by Bernie Sanders "The Billionaires want More, More, More". Looks like he was right, the billionaires got MORE. And soon they'll own much of the housing stock. Of course, they also have huge floating houses of their own, er, yachts and from what I hear, hidden bunkers in New Zealand when the SHTF. Oh, wait...is that happening now??

Now we have a pandemic that "no one could have seen coming" (ummm) but well before that the suicide rate was going through the roof and the experts scratch their heads wondering why?

Survival of the fittest, indeed.

[RealEstateCafe]

@bisg61 -- Thanks for your diligence. Use that word deliberately because the stakes are so high. This week, received an emall subject line that read:

2008/2009 Recession All Over Again But Better!

Two clicks later, arrived at a sign-up form that read:

"Don’t get left on the sidelines. In this report, you’ll learn why…
This Crisis is the Same but Better than the 2008/2009 Financial Crisis"

You're right -- real estate predators are already mobilizing, from small investors to institutional investors to hybrid models in between -- new FinTech shared equity models that may prevent prices from correcting and #iBuyers who pose as listing agents and morph into cash buyers before affordable homebuying opportunities hit the MLS.

+ + +

The Boston Area Research Initiative is unfolding a weekly series online entitled "The Smart, Equitable Commonwealth: Co-Creating the Society We Want"

Sent this tweet after their first session two weeks ago to the head of Boston's Housing Innovation Lab"

Taylor follow-up Q from #BARIBoston: If goal = cocreate society we want, need to get ahead of speculators who may be eager to purchase homes from distressed sellers as in Great Recession. Opportunity for non-profits to purchase homes & hold as permanent #AffordableHousing?
#BosRE

https://twitter.com/RealEstateCafe/status/1254801522753523712?s=20

+ + +

Anyone want to explore developing #WeBuyers or other strategies to get ahead of real estate speculators before more affordable inventory becomes part of #LandlordNation? See hashtag on Twitter:

https://bit.ly/LandlordNation_LIVTwts
_________________
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

[RealEstateCafe]

#Covid_ImpactRE: Official stats still have not been released, but #RealEstateCafe’s analysis of nearly 5,000 MLS sales across Massachusetts during April shows opportunity for homebuyers to save money.

More than half of all #MLS listings sold below their original price: 1 in 5 sellers reduced their asking price, but more than 2.5 times that number of buyers negotiated savings on 2,409 listings.

The location and magnitude of those savings should encourage buyers to submit aggressive offers. Think it’s smart to bargain hunt now or simply wait for further price reductions?

Welcome discussion here on BostonBubble, on LinkedIn, on Twitter thread or in client-only section of @RealEstateCafe. DM or email — RealEstateCafe@gmail.com to discuss privately.

https://twitter.com/RealEstateCafe/status/1261335451421544449?s=20


+ + +

FREE crowdsourcing preview: Sample post for homebuyer clients who share insights P2P

April stats should encourage buyers to make aggressive offers
https://bit.ly/AprilMLS_ClientsONLY
_________________
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

[aditya01]

Due to the COVID-19 crisis, there are fewer buyers and the number of sellers in the market, if it goes in the same way or if there is a drastic change in the interest rates, then may be real estate market starts to slow down. On the other hand, some buyers taking this thing as an opportunity to buy the house because of low-interest rates.