How’s the Market Doing in Wellesley? Read the Latest Market Update - 9/30/2008

Monthly market performance:

As of September 30, 2008, there were 133 single family listings in Wellesley (including Wellesley Hills and Wellesley Farms) on the Multiple Listing Service (MLSPin). We continue to see a strong upward growth of new listings coming on the market, with a few new luxury home listings being added in the $2.5 million plus range. During September, 43 new single family listings were added to our MLSPin, with an average list price of $1,677,856.

The average list price is $1,803,219. The lowest price is $330,000 and the highest price is $6,495,000, with the largest concentration of homes (41.4%%) priced in the $1,000,000 to $1,999,999 price range. Of note, the average list price for a single family home in September 2007 was $1,504,634.

The median price is $1,495,000 and the average days on market are 134 days. This compares to a median sales price of $1,195,000 and average days on market of 129 days as of September 30, 2007.

There were 15 properties that went under agreement during the month of September (September 2007- 22 properties). 19 single family homes sold during September, with the average sales price being $1,302,549 and the median was $1,305,000, with the average days on market being 87 days. Compare this to 28 properties sold during September 2007, with an average and median sales price of $1,376,832 and $1,180,000, respectively, and the average number of days on market being 89 days.

In September 2008:

36 properties had price changes averaging -6.68%

Sales price to original price was 95%

Sales price to (last) adjusted price was 97%

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Don’t Overlook the Value of Bathroom Improvements!!!

Valuable information to share with buyers and sellers.

According to the National Association of Realtors’ (NAR) annual “Cost vs. Value Report,” the bathroom is one of the most important features potential buyers look for in a home. What’s more, NAR’s 2007 report shows that a bathroom remodel recouped 93.2 percent of the initial cost upon selling the home.

Will Smith, celebrity interior designer, suggests that homeowners pay close attention to the bathroom mirror, paint, hardware and lighting. Each can easily and inexpensively be updated to provide a current look for a bathroom.

Making over a bathroom on a budget can be easily accomplished — without sacrificing style. According to Smith, high-end looks for less include:

• Mirror: The mirror is the focal point in the bathroom and can make a real statement with the right frame. A frame around the mirror gives a bathroom a finished, updated look.
• Paint: A painted bathroom is a tried and true way to make a big impact with little cost. Create a spa-like setting with paints in beige and pale tones or use popular colors such as brown, aqua, olive and gold to make the bathroom stand out.
• Hardware: Match the lighting, fixtures, bath bars, knobs and switches to create a cohesive look. Brushed nickel, pewter, antique or oil rubbed bronze finishes are all good options.
• Lighting: Soft lighting makes more of a statement than harsh lighting, so select a fixture with shades or sconces. You can also contribute to the greatest focal point in the room by placing the fixture above or alongside the mirror.

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The Grass Really is Greener with WEICHERT, REALTORS®-Synergy

Are there any members of out there that want to come home, where not only is the baseball better, but SO IS THE LOCAL REAL ESTATE MARKET!!!

in Wellesley Hills, MA is HIRING NEW AND EXPERIENCED AGENTS.

We are an exciting, new affiliate of Weichert, Realtors that just started up on May 1, 2008 and are looking for agents who believe in designated agency and who have what it takes for a successful career in real estate. Due to the ENORMOUS SIZE of our internet generated leads from http://synergy-metrowest.com and http://weichert.com, we rely on agents who can take, work and close leads throughout the day and on weekends.

Per the MLS, OUR AVERAGE HOME SALES PRICE IS $960,000 IN WELLESLEY, MA. We offer top commission splits based on DOLLAR VOLUME, NOT COMMISSIONS GENERATED.

INTERESTED? INTRIGUED? Call me to learn more or set up an appointment to meet with me in person.

Our Founder, Jim Weichert says “now is the time to buy” and you’d better believe it. Experienced members of the Synergy team are also eligible to participate in referral business from Weichert Relocation Resources, Inc. the WORLD’S 2nd largest mobility company.

I can’t offer you a relocation package, but I can offer you HOPE and OPPORTUNITY. Do you have that right now where you are at?

Call me anytime - 781-694-3513 or e-mail me at martin@synergy-metrowest.com. I’d love to speak with you.

Martin E. Kalisker, Broker/Owner

WEICHERT, REALTORS®-Synergy

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Where do Mortgage Rates Come From?

Where do mortgage rates come from? Not the 10 year nor 30 year Treasury as many think.

Why and how mortgage rates change in the marketplace is often misunderstood – even by the news media. They often report mortgage rates will go down when the Federal Reserve announces a rate cut when sometimes the opposite can happen.

How do Federal Reserve rate changes affect mortgages?

Fed rate changes don’t directly affect mortgage rates. Instead, they affect the inflation expectations of investors. The role of the Federal Reserve in our economy is to control inflation so we have long-term economic growth and prosperity. If the economy grows too fast, we get inflation. If the economy shrinks, we have recession. The Fed’s main tool in managing the economy is to change short-term interest rates. They can directly change the rate banks charge each other for loans and the rate the Fed charges banks. Banks eventually change the rates they charge customers for certain loan and savings products as it gets cheaper or more expensive for them to borrow money. Loans indexed to the Prime rate are usually the first to change. The Fed lowers rates to speed up the economy. Lower rates encourage more business and consumer spending as loans become cheaper and saving becomes less profitable. The Fed raises rates to slow the economy. Higher rates discourage spending as borrowing becomes more expensive and saving money becomes more profitable.

If investors think Fed rate changes will make the economy grow fast enough to cause inflation, the mortgage rates they demand will go up. If they think the Fed’s actions will reduce inflation, mortgage rates are likely to fall. There are times when mortgage rates will go the opposite direction of Fed rate changes based on the inflationary impact investors expect.

What do investors have to do with mortgages?

Did you know that individuals and businesses can invest in securities backed by people’s mortgages? Institutions that make mortgages frequently sell them to investors. The mortgage interest homeowners pay provides income to buyers of mortgage-backed securities. That buying and selling of mortgages gives lenders a ready source of money for making mortgage loans. As a result, far more people can get mortgages and buy homes than would otherwise occur.

How do mortgage investors influence mortgage rates?

Investors require a return on their money in exchange for the risk they are taking. That required rate of return directly impacts mortgage rates. Simply put, if the rate offered on a mortgage-backed security is below the return investors require, they won’t buy it at face value. To get face value, the institution selling the mortgage must raise their mortgage interest rates to a level that meets the required rate of return.

The rate is generally based on two kinds of risk – inflation expectations and risk the borrower won’t repay on time.

During this period of credit risk and increased property foreclosures, mortgage backed securities are deemed risky and therefore the selling institution has to pay a higher rate to attract investors. This helps foster higher mortgage rates at the consumer level.

How inflation expectations of mortgage investors affect rates?

Inflation occurs when prices for goods and services rise over time. As prices rise, the purchasing power of a dollar falls. Investors want to ensure that inflation won’t erase the value of the earnings on their investments. If they expect inflation to increase, they’ll want a higher rate. If they expect inflation to decrease, they’ll accept less. As mentioned before, Fed rate changes are a big factor in those expectations.

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Bye Bye Newspaper Advertising for Real Estate

As further evidence of the shift to online advertising, the Los Angeles Times has announced it will no longer publish its weekly real estate section. Click here for the entire news story.

Is Boston next? As a Realtor®, I am often asked by Sellers and Agents alike, why I am reluctant to use the newspaper for marketing and listing of properties for sale. Besides the high cost and low return on the advertising dollar spent, over 80% of homes are sold because somebody saw the listing on the Internet.. What could be more convincing?

I understand that it used to be fun to sit down with a cup of coffee on a Sunday morning, circling open house ads, but that was literally, yesterday’s news. Today’s buyers are more motivated to simply drive around an area of town that they like to look for open house signs so that they can do some research on the Internet before they call their Buyer’s Agent (notice I did not say the Listing Agent, because listing agents represent the seller - not the buyer, so why would you call the listing agent to help you buy the property?)

With decreasing readership in the print editions of newspapers and magazines, proactive Realtors® are spending their advertising dollars more wisely. It sounds like the LA Times just helped agents in Southern California make the inevitable decision. Wow, two great things to come out of LA this week - first the demise of the real estate section in the paper, then the news that they took Manny out of Boston. Maybe those earthquakes are making people in Lala land think more rationally. Well, maybe not. They did take Manny - who now has his IQ printed on his jersey (99).

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FAQs about the HOPE For Homeowners Legislation

This is hot off the press news. President Bush has signed into law the HOPE for Homeowners Legislation on July 30, 2008.

When does the program start?

The legislation is effective upon enactment; the HOPE for Homeowners program goes into effect on October 1, 2008. The Oversight Board will write more detailed program rules.

What agency is administering it? Will people be calling state offices or federal? Or will people just contact their lenders directly?

The Federal Housing Administration (FHA) will administer the program. The process begins when a homeowner or servicer of an existing eligible loan contacts an FHA-approved lender. Homeowners can contact lenders or servicers directly or through counselors (for which the bill provides another $150 million). It is important to note that this is a voluntary program.

Do borrowers have to use their current lender, or can they switch to another?

Borrowers may use any FHA-approved lender, as long as their current lender or investors agree to take the write-down in value.

Is it just subprime loans that can be refinanced? When did the bad loan have to have been taken out for them to qualify?

Any owner-occupants who are unable to afford their mortgage payments are eligible for the program. No investors or investor properties will qualify. Homeowners must certify, under penalty of law, that they have not intentionally defaulted on their loan to qualify for the program and must have a mortgage debt-to-income ratio greater than 31 percent as of March 1, 2008. Lenders must document and verify borrowers’ income with the IRS for the new loan. Loans had to have been originated before January 1, 2008.

What percentage of the current market value of the house must the loan be less than?

The size of the new FHA-insured loan will be the lesser of the amount the borrower can afford to repay, as determined by the current affordability requirements of FHA, or 90 percent of the current value of the home. Loans must be 30-year, fixed rate loans.

How will the interest rate be determined for the new 30-year fixed-rate loan?

Interest rates will be determined by the market. Because loans are insured by FHA, rates are expected to be very competitive.

What are the fees involved, and when are they paid? There is an annual default insurance premium, isn’t there?

Borrowers pay an insurance premium of 1.5% of the principal, which will be included in the monthly payment. In addition, the current lender makes an upfront payment of 3% of the principal to FHA.

Can the owner re-sell the house right away? Is there a waiting period? How much of the proceeds does the owner give up if they sell, and who gets those?

Borrowers must share the newly-created equity and future appreciation equally with FHA. This obligation will continue until the borrower sells the home or refinances the FHA-insured mortgage. Moreover, the homeowner’s access to the newly created equity will be phased-in over 5 years. If borrowers sell or re-finance within a year, they will pay the FHA 100% of any profit they may realize.

How many borrowers will be able to take advantage of the program? Is it first-come, first-served for qualifying borrowers?

The program is authorized to insure up to $300 billion in mortgages and is expected to serve approximately 400,000 homeowners.

Can a borrower be declined if they also have a home-equity line of credit? Is there any help available to also pay those off?

Borrowers have to retire any debt on the home to qualify for the program.

When does the program end?

The program will sunset on September 30, 2011.

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New Housing Characteristics

THEY’RE GETTING BIGGER AND BIGGER

According to the Census Bureaus’ Characteristics of New Housing report for 2007, the average square footage of homes is currently at a historic high.

On average, a completed single-family home had 2,521 square-feet, up 2.1% from 2,469 square-feet in 2006.

Additionally, the report provides characteristics on indoor and outdoor housing features. Data from this report gives insight into current trends to better understand today’s buyer.

Home-size findings from the report include:
• The average square footage of new homes completed has grown about 46.6 percent since 1 977, when the average was 1,720 square-feet.
• About 26 percent of all new single-family homes completed in 2007 had 3,000 or more square-feet of space, up from 24 percent in 2006 and 11 percent in 1988.
• The percentage of new single-family completed with 1,200 square-feet or less of floor area shrank from 25 percent in 1 973 to 4 percent in 2007.

Housing characteristics of single-family, newly-completed homes include:

• In homes with 4 or more bedrooms, over half had 3 bathrooms or more.
• Across the country, half of all homes had at least one fireplace.
• 90 percent of all homes had air conditioning.
• 67 percent of all new homes used gas as the primary source of heating fuel.
• At 32 percent, vinyl siding is the most commonly used material for the exterior of a home.

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Weichert Forecasts Housing Market on the Rise

Real estate pioneer calls the bottom of the market and expects home sales to begin showing modest, steady increases

As president and founder of Weichert, Realtors, one of the nation’s largest privately-held real estate companies, James M. Weichert has seen his share of market shifts. In fact, Weichert has become quite efficient at predicting changes by regularly studying the factors that shape the housing sector. Yet, this well-respected industry pioneer has never felt so strongly about a market shift that he would come out and declare so publicly – until now.

In a message to the company’s nearly 1 8,000 sales associates as well as approximately 2,000 employees, Weichert announced that “we have reached the bottom of the housing market and will soon begin to see improvements.”

“We saw an extraordinarily hot market at the start of the decade like we may never see again. I knew in May 2005 that we had reached the peak of the market when mortgage payments began to stretch beyond buyer affordability,” said Weichert. “Now, everything I am seeing is telling me the worst is behind us and we’ll begin to see a gradual increase in sales activities.”
Weichert acknowledges that the recovery will happen at slightly different times and at different rates throughout the country because real estate remains a local business. “I recognize that some areas locally and some states nationally are not there yet, but by and large, we are turning the corner.”

As is typical in real estate, the Northeast appears to be the first area heading in to a new market. In many states, home sales are increasing slightly month over month and the home supply is waning. At the same time, interest rates remain historically-low, foreclosures are on the decline and mortgage money is becoming more readily available again.

Perhaps the biggest factor Weichert feels points to a market on the way back up is the increase in buyer interest. “There is just a lot of pent-up demand right now. We are seeing more traffic to our Web site, more people coming to our Open Houses. Despite the downturn the past few years, life goes on. People continue to get married, have kids and change jobs and buying a new home often goes hand in hand with these life milestones.”

“I know there are a lot of interested buyers who have sat on the sidelines the past few years either because they lacked confidence in the market or because they were hoping to time their purchase perfectly and buy at the lowest point possible,” added Weichert. “I would tell those people there is no more reason for uncertainty or hesitation.”

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Do Wellesley Buyers Prefer One Stop Shopping?

You’ve just signed an Offer to Purchase on your new dream home. Your energy level is at an all time high, and if you had your way, you’d close on the transaction tomorrow. But what does your Realtor do? Does he/she hand you a list of lawyers, mortgage lenders and other service providers and pleasantly tells you to go through the list and “find someone that you like?” That might be ok if you are a seasoned homebuyer who knows exactly what questions to ask and otherwise manage these relationships. Or, does your Realtor take you by the hand and to the office next to his to introduce you to their One Stop Shopping service manager (at Weichert, we call this the Gold Services Manager)? Read the results of a recent NAR study and share your feedback.

According to a recent National Association of Realtors’ One-Stop Shopping Consumer Preferences survey, a large majority of recent and future buyers would consider using one-stop shopping in the homebuying process. Results also showed that the majority of buyers were happy with their latest real estate transaction; the most satisfied buyers were those that used one-stop shopping.

Statistics from the survey include:

• 93 percent of homebuyers would consider using one-stop shopping. The number of recent buyers who used a one-stop shopping service increased 45 percent from 2002 to 2008.
• Nearly twice as many recent buyers in 2008 report using a Sales Associate whose office offered a full range of buying services compared to 2002.
• The biggest perceived advantages of one-stop shopping are saving money (77 percent), increased efficiency/manageability (73 percent), convenience (73 percent) and things not falling through the cracks (73 percent).
• The average satisfaction score for overall experience of buying a home was 7.9, on a 10 point scale where 10 meant “completely satisfied.” Recent buyers were most satisfied with their Sales Associate and homeowner’s insurance (8.3).
• One-stop shoppers were more satisfied with their overall experience than those who used multiple sources (8.3 vs. 7.6). When it comes to buying a home, they were also more likely to report that they would prefer service providers to be affiliated with a Sales Associate (35 percent vs. 18 percent).

So, do you agree?

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Renting? Now’s a Great Time to Buy !

Renters Plan to Buy Homes

According to a survey conducted by Harris Interactive for the National Apartment Association, one in five renters plan to buy a home in the next year, and most said they expected to make the move to homeownership within five years. Cumulatively, 41 percent of renters said they no longer expect to be renting after two years, 56 percent would no longer be renting after three years, 60 percent after four years and 69 percent within five years.

Additionally, more than half of those polled – including renters, homeowners and adults living with their parents – expect housing markets to improve in the next six months.

A growth in market confidence and renters planning to buy homes may indicate that an increase in home sales is not far behind.

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