Boston Luxury Real Estate Insider Blog

Just a bit of real estate news from down South. Florida was hit hard with foreclosure sales, then short sales. Now more and more sales of half-finished homes. Lots of bare-studed houses abandoned by their builders are sitting on market. Of course, purchasing a partially built home is nothing new. During the housing boom, many new-home buyers signed purchase contracts before a contractor had even poured a slab. But now, the contractor might no longer be around to finish the job, particularly if a deal involves a custom home. You should consult a general contractor before purchasing an unfinished home anywhere. Here in the Boston area we are not seeing this kind surplus as new construction homes in the area have dropped to its lowest inventory in 40 Years. Thinking of puchasing a new construction home? Feel free to ask questions. I have sold many new construction condos and single family homes in the past and they are all a challenge. So be sure to have the right buyers agent to represent you when buying.

617-236-5005 www.bostonerealty.com www.luxreblog.com 

New Construction Condos Boston

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The Good news for first time home buyers is tax credit extended for sure. Congressman Maurice Hinchey helped secure legislation that will extend the $8,000 federal tax credit for first time home-buyers, and create a new $6,500 tax credit for people who have bought a home in the last five years. Hinchey says it was important to extend this legislation through April 30th of 2010, because it’s been a successful law so far.”It provides opportunities for people to buy homes who wouldn’t have the opportunity, because the $8,000 provides them with the incentive they need, and the additional financial help they need to actually buy that house,” said Rep. Maurice Hinchey, (D) 22nd District. Hinchey says he doesn’t know if there will be another extension, because it all depends on the program’s success.

We checked in with our lending specialist Jason Deeb at MSA Mortgage and here is what he sent us to help understand the process.  Jason Deeb says with the recent extension of the First Time Homebuyer Tax Credit, after consulting with many MSA clients who purchased a home for the first time and had difficulty visualizing the process. Many of our clients have found our flow chart extremely helpful so I wanted to pass it along to you to forward to your clients. Please let me know if I can send it to you or if you have any questions. Contact Jason Deeb Senior Loan Officer Direct: 781.486.7143 Cell: 917.721.2111 Fax: 781.245.7373 Email: jdeeb@msamortgage.com

Now is the time to rent in Boston.  With so many brand new building developments such as 1330 Boylston Harborview Charlestown; and Trilogy, recently completed there is a greater supply of luxury apartments than demand for them.  As a result, many buildings are offering very attractive incentives to renters.

Archstone Avenir is offering two months free on a 13 months lease.  This adds up to some big savings.  For example, a 1 bedroom which typically rents for $2,500 per month would now rent for $2,115.  A savings of $5,000 over the term of a 13 month lease.  Archstone is also paying the full broker’s fee, which is an additional month’s rent.  Essentially, you are getting 3 months rent for free.

Archstone Avenir is offering renters some of the most aggressive incentives but many other properties are following their lead.  Buildings, all over Boston, which historically had few available apartments are now offering one or two months free, reduced parking rates and waiving amenities fees.

For the most up to date incentives on all of the luxury buildings in Boston please give me a call or email me Bill Carr 781-859-9805 williamc@rikemanre.com

The housing slump and the credit crunch continue to take a toll on Boston’s condominium market.

“High-worth individuals who are the potential buyers of luxury condos watched as their stock market portfolios were decimated by as much as 40 percent in the last year,” said Michael Albano, broker-owner of Metropolitan Boston Real Estate. “They’re waiting for it to rebound before they pour money into real estate.”

Sales of luxury condominiums priced at $500,000 or more fell by 39 percent for the first seven months of the year to 409, from 673 for the same period one year ago, according to the Warren Group.

For some of the developments, the prices are still too high, according to one buyer’s agent. FP3, the 89-unit building in the city’s Fort Point neighborhood, has struggled to sell units priced up to more than $2 million.

“I’m the biggest fan of FP3, but the prices are out of whack,” said Anthony Longo, owner of Boston.CondoDomain.com, an exclusive buyer’s agency. “People will buy it, but they want to buy at very low prices.”

Timothy Warren Jr., CEO of the Warren Group, noted that sales of Boston condominiums in all price ranges are off by 33 percent compared to last year and the median price has fallen by 10 percent to $500,000.

“It’s not just the upper end that’s not selling,” he said. “But high-priced condos are bankers’ least favorite thing to invest in these days.”

Boston Hearald Report

The Obama administration plans to use $4.25 billion of stimulus funds to spur the rental market, a significant departure from former President George W. Bush’s vision of an “ownership society.” The move is a practical response to the economic crisis, the credit crunch and soaring foreclosure rates, as well as an ideological shift. “I’ve always said the American dream should be a home — not home ownership,” said Rep. Barney Frank, chairman of the House Financial Services Committee. ~ Boston Globe

By Chris Reidy (Boston Globe)

The number of Massachusetts homes sold last month jumped nearly 12 percent from July 2008, and the decline in prices moderated, the Warren Group reported today.

Low interest rates, reduced prices, the first-time homebuyer tax credit, and improved consumer confidence contributed to last month’s results, said the Warren Group, the Boston firm that tracks local real estate data and publishes Banker & Tradesman.

“This is a much-needed boost for the state’s housing market,” Warren Group chief executive Timothy M. Warren Jr. said in a statement. “We haven’t had a double-digit gain in monthly home sales since last October. And the declines in home prices have been getting smaller every month.”

A trend toward moderation first seen in June appeared to continue in July, he added, while cautioning: “We’re not out of the woods yet. We have to see consistent gains in sales going forward for home prices to stabilize.”

The number of single-family home sold in Massachusetts rose 11.8 percent to 4,977 from 4,453 in July 2008, the first increase in monthly home sales year-over-year in 2009, the Warren Group said.

The median selling price for single-family homes fell 4.7 percent to $305,000 from $320,000.

“Monthly median home prices fell by double-digit percentages year-over-year in the first five months of 2009,” the Warren Group said. “But in June and July, home prices slipped by only single-digit percentages. The median price for homes sold through July retreated 11.4 percent to $280,000 from $316,000.”

The Warren Group press release continued: “Condo sales remained fairly flat in July, but that’s a significant step up from prior months when sales sank by 20 to 30 percent. And the decline in condo prices in July wasn’t as steep as it has been.”

The number of Massachusetts condos sold in July was 2,190 in July, slightly lower than the 2,227 sales in July 2008. So far this year, condo sales are off by about 20 percent, the Warren Group said.

The median condo price fell 4.3 percent to $276,000 in July from $288,500 last year. July’s 4.3 percent drop was the smallest so far in 2009. the Warren Group reported. In the first five months of the year, price declines exceeded 10 percent.

The Massachusetts Association of Realtors also issued its monthly report on the local housing market this morning. The association uses a different method to track sales activity than the Warren Group does.

July sales of single-family homes were up 12.7 percent compared with the same month a year ago, the first time since December 2008 that home sales have gone up year-over-year, the association said. Condominium sales were also up for the first time since August 2007.

According to the association, the number of single-family homes sold in July was 4,460 versus 3,957 in July 2008 and up 7.5 percent from the 4,147 sold in June 2009, the association said.

The median selling price for a detached single-family home in Massachusetts was $310,000, down 5.1 percent from $326,500 in July 2008 and up 1.3 percent from $306,000 in June 2009, the association said.

Looking at the Massachusetts condo market for last month, the association said that sales were essentially flat on a year-to-year basis - 1,820 sold in July 2009 versus 1,803 in July 2008 and up 12.1 percent from 1,623 sold in June of this year.

The July median selling price for a Massachusetts condo was $275,000, down 3.5 percent from $284,950 a year ago and flat with June 2009, the association said.

“Activity has been building for the past few months and we are finally seeing the real estate market respond in a positive way,” Massachusetts Association of Realtors president Gary Rogers said in a statement. “Buyers are taking advantage of the $8,000 first-time homebuyer tax credit, low interest rates, and more affordable prices and getting into the market. While it is only one month, the number of homes put under agreement are also up, which means there is a good chance we could see additional months of increased sales ahead.”

A third report on the housing market was also issued today - the S&P/Case-Shiller Home Price Indices. Many observers deem the Case-Shiller indices to be one of the most accurate measures of the housing market because it tracks repeat sales.

This methodology collects data on single-family home resales, capturing re-sold sale prices to form sale pairs, according to S&P’s website.

S&P/Case-Shiller data out today showed that Boston-area homes increased in value by 2.6 percent in June when compared with May.

While the news was generally good today, the Warren Group had some sobering news to report last week: While Bay State foreclosures in July dropped sharply from a year ago, the number of foreclosure proceedings started by lenders increased to approach “historic highs.”

The recession has consumers being furloughed or laid off, and one result is that more people are struggling to make their monthly house payments, that foreclosure report suggested.

Home values may take a while to stabilize, advisers note

By Darla Mercado

Slumping home prices and financial incentives may make homeownership all the more tantalizing for young newlyweds, but advisers warn that renting

Predictions of a second major default in mortgages, followed by an even further decline in home values, plus the fact that young newlyweds are beginning their married lives in a less-than-ideal economy, may mean that such couples are better off resisting the allure of homeownership for now.

“Even if you consider in the grand scheme of things that prices are low now and that you may get a low-interest-rate mortgage, this is still a huge purchase,” said Dylan L. Ross, founder of Swan Financial Planning LLC in East Windsor, N.J. “Here’s an analogy: It’s like getting married without dating first. Things may look and sound great, but you’re getting into this big commitment.”

Generally, home prices have continued to plummet, with exceptions in several major cities, according to data from Standard and Poor’s of New York. The 20-City Composite Home Price Index, a component of the S&P/Case-Shiller Home Price Indices, fell by 18.1% this April, compared with the comparable month in 2008. The worst declines hit Phoenix and Las Vegas, which experienced home price declines of 35.3% and 32.2%, respectively.

MERELY A MIRAGE

But those deep discounts, coupled with the $8,000 federal housing tax credit for first-time buyers, are merely a mirage for most young couples, advisers said. “There are screaming buys out there, and those who are positioned properly should seize the opportunity,” said Patrick L. Doland, principal of Reason Financial Advisors Inc. in Northbrook, Ill. “Many young couples aren’t positioned to take that advantage.”

Those who are best-prepared to step into homeownership are entering the purchase with minimal credit card balances, manageable student loan debt and a large-enough income to qualify for the mortgage and shell out for the down payment on the home, advisers said. A career in an area that’s safe from the layoffs that have rocked many Americans would also be helpful.

However, that’s not the situation many advisers are seeing among their younger clients.

“People are leaving school with more debt, and the job market is unstable,” said Jeremy E. Portnoff, owner of Portnoff Financial LLC in Union, N.J. “It’s worse to lose your home because you can’t afford it, versus giving up an apartment or breaking a lease early,” he added. “If you lose your job, you can move in with mom and dad for a while.”

At age 30 and only three years into his marriage, Mr. Portnoff and his wife recently moved into a rented townhouse from their first apartment after deciding it wasn’t the right time to buy. He pointed to a combination of factors behind his decision, including the possibility that he and his wife would purchase a house, grow out of it when the couple had a family and then end up stuck with an illiquid asset.

“Buying now, you could be faced with a problem: What if the values fall further and you end up in a situation where you don’t have enough space?” Mr. Portnoff asked. Also, if the Portnoffs grew out of a two-bedroom starter house within three years of purchasing it, the equity in the home would be eaten up in sales commissions to the realtor when the time came to move to a larger house.

Instead, Mr. Portnoff said, it makes more sense to wait for the three- and four-bedroom homes to fall in value, which he believes will happen in the approaching years as more baby boomers downsize and search for smaller abodes.

Some also expect more housing market turmoil ahead, leading to even-steeper discounts for those who wait. “We have a second wave of defaults, largely from option adjustable-rate-mortgage loans from four or five years ago,” said Thom K. Hall, partner at the Financial Strategies Institute of Midvale, Utah. Those who buy now may watch the values of their homes drop another 30% — a loss for those who pounce now but a boon for those who wait.

“If we get defaults this fall, then what you’ll have is another flood of foreclosures hitting the market. That means negative pressure on all housing prices,” Mr. Hall added. He predicts better deals in 2012 and 2013.

RENTS FALLING

In defense of renting, advisers point to falling rents across the country. New York is among the locales with plummeting rents: In the second quarter of 2009, the average rent for an apartment in Manhattan was $3,839, down 7.3% from the prior quarter, according to data from Prudential Douglas Elliman Real Estate and Miller Samuel Inc., both of New York.

“There’s a fallacy that you’re throwing money away if you rent,” said Marc B. Schindler, founding partner of Pivot Point Advisors LLC in Bellaire, Texas. Prospective buyers often don’t factor in the cost of maintenance fees, closing costs and taxes when they consider what they would pay per month on mortgages, compare with their rents, he noted.

“You might rent that $350,000 home for $2,000 a month,” Mr. Schindler said. “If you buy, you’re throwing away money if the house doesn’t appreciate in value.”

Finally, renting gives newlyweds time to practice budgeting and build their cash reserves instead of being swept up into the pressure of buying a house immediately.

“If you’re not practiced at budgeting, it’s easy to underestimate your expenses,” Mr. Ross said. “The only way to know is to put your budget down on paper and give yourself an accurate picture of whether you can afford it.”

DENVER - (Business Wire) Archstone announced today that the leasing office for its newest Boston community, Archstone Avenir, has officially opened its doors and begun leasing elegant, serene flats and duplex lofts in a smoke-free environment.

As the leasing office is now officially open, Boston apartment seekers can get a first-hand look at the community’s thoughtful apartment features and convenient amenities. Leasing associates are now available to showcase apartment homes that are available for immediate occupancy Monday through Friday from 9 a.m. to 6 p.m., Saturday from 9 a.m. to 5 p.m. and Sunday from 11 a.m. to 5 p.m. No broker or appointment is necessary.

“Archstone Avenir has one of the best locations just steps from the North End and the financial district, which is a perfect complement to its fantastic condo-level finishes in a loft-style community,” said Matt Smith, Archstone’s Executive Vice President of Operations for the East Region. “We see this as an important extension of our unparalleled group of luxury apartment communities in the Boston metro area.”

The community, which features 241 luxury apartment homes and 27,000 square feet of retail space, is the first large-scale, professionally managed apartment community to offer a smoke-free living environment in Boston. Smoking will be prohibited in interior common areas, inside apartment units, on balconies and the roof deck.

“Some communities only offer smoke-free public areas. Archstone Avenir, on the other hand, prohibits smoking almost everywhere in the community,” said Sally Matheu, Archstone’s Group Vice President of Operations. “What’s more, Archstone Avenir offers a number of healthy living amenities that we believe residents will thoroughly enjoy.”

Among those other healthy living amenities are a 24-hour Caliber Sports Club®, bike storage and close proximity to shopping, dining, entertainment and work venues that encourage walking and biking. Residents looking for outdoor activities will also find that Archstone Avenir provides easy access to the 23-mile Charles River Bike Path and the Rose Kennedy Greenway, which features nearly one mile of parks and green space.

Archstone Avenir is a key element to the revitalization efforts of Boston’s historic Bullfinch Triangle neighborhood, where a vital neighborhood has emerged. And the community, which is situated on top of the Green/Orange Line North Station Entrance, offers convenient access to public transportation that can take residents anywhere they need to go.

While at home, residents will find that the Boston apartments, featuring loft-style units and Bosch appliances, combine thoughtfully crafted spaces, a wide range of floor plans and striking interior design to offer a relaxing retreat and affordable luxury.