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1st Half of 2006 PLUS 4th Quarter of 2005

 

The Local Market in a Nutshell.

Here it is, coming from someone who works the front lines of the Northshore real estate market...

People of all income levels are moving to the Northshore for the lifestyle and unique qualities and charm. Salem is already planning to have the wharf complete with a commuter boat to Boston. The future looks good to attract out-of-towners to relocate to Salem. In saying this....

The condo market has a lot of inventory and competition amongst condo owners is tough. Developers are turning every square foot they can find into real nice condos.

Despite the inventory, you can certainly compete. Condos are the affordable alternatives to a single family home. So, price it right and there will be a buyer for it. Location, amenities and parking should be intelligently considered when pricing. Price it high, you may get lucky, but chances are you'll need some patience for a long-term listing with an understanding that you may need to extend the listing with a price change.

The single family market has seen a dip in the prices. The average 3 bedroom ranch is in the mid to low $300s depending on how much work and updating needs to be done. I just sold 14 Eden Street, a classic 1920s style colonial that needs a new kitchen, baths, an exterior/interior paint job, 1800 sf, 4 bedroom, for $334,000. A great house for long-term ownership.

Buyers know that after they put in another $70,000 or so into the house, they may never get their money back in resale value if they need to sell after 4 years or so, especially as interest rates continue to rise or if the market stays stagnant or dips. If your house is tastefully updated, new kitchen, baths, etc., then you've got an edge and you can stretch the asking price. But patience IS necessary. It may take 3-6 months before it sells. So extending listing contracts are the norm.

The multi-family market is attracting first-time buyers who don't like the restrictions of condo living (condo rules, future assessments, condo fees, no pets, etc.), or can't afford the monthly payments of a single family, and realize the benefit in rental income helping pay their mortgage. Loans are flexible with 10%, 5%, even 0% down for an owner occupied multi. And with interest rates rising, these buyers are scrambling to beat saavy developers from taking away their chance to own. Their budget is tight, but they will generally pay a little more than a condo developer. Developers take into account total renovation costs as they offer to purchase. First-time buyers are willing to keep the house long-term and fix as they go along. A great example is my sale of 44 Cedar Street, a 3-family, off Lafayette Street, back toward Cabot Street. Nice deadend street, mixed in with some 5 year old condo conversions, some newer. This house lacked unit updates like dishwashers, disposals, really needed updating. Two bedrooms each of three floors. Attic unit had an older kitchen, poor choice of paint colors (stick to neutrals/off whites), parking for 1 car, potential for extra parking in the backyard which was nice and large. Not a huge amount of curb appeal. My client wanted $460 for it, so I listed it for $479,000. Listed just before the holidays, so it was uneventful from the start through December. Then January hit with calls. Mostly low-ballers. I was up against a rise in interest rates, too. But in early February, a couple who were first-time buyers had more than an interest. In fact, there were a few first-time buyers looking at the house. But this couple really examined the house, then scheduled a second showing. They first offerd low, as I thought they would with a few contingencies. I got them closer to $460,000 through a counter offer and they eliminated their contingencies. The seller rejected the offer, still set on her goal of no less than $460,000. The buyers walked, but I suggested they shop around for another week or so knowing I had the best deal for a multi in Salem. They took my advise and came back a week later and offered the $460,000. This house took 110 days for the right buyer to come in. So, my hat's off to my client who took my advice and hung on. She extended her listing after 90 days, a couple of weeks at a time.

If you're a multi owner wanting to sell here's some advice from my own experiences as a landlord.
— If your units are occupied with paying tenants, keep them there. If the house doesn't sell, at least you can keep the house without advertising for new tenants. It could take a couple of months to get new tenants. Naturally, this tenant issue should be considered on a case-by-case basis. Call me if you want to talk about the possibilities (978-430-1448).
— Brighten up the hallways with 60 watt bulbs! And make sure all the common area lights/bulbs work, especially basement lights.
— Mow the lawn.
— Fix dripping faucets.
— If you're going to paint interior walls, use neutral colors. Off whites tend to make the rooms bigger.
— If a unit is empty, shampoo the carpets, clean the windows.

The Massachusetts Market

By Kimberly Blanton, Globe Staff  |  June 27, 2006
 
The price of single-family homes in Massachusetts dropped by 4 percent in May as property values reacted to the statewide downturn in sales.
 
The median price fell to $331,000, from $344,700 in May 2005, according to the monthly housing sales report by Warren Group, a Boston real estate research and publishing firm. House sales declined for a fifth consecutive month, falling 5.1 percent last month, to 5,208 units, compared with 5,488 a year ago, Warren Group said.
 
Total sales of 19,910 for January through May were 9.3 percent below the same period in 2005.
 
" When there are fewer sales, you're going to see the prices start to drop," said Warren Group chief executive Timothy Warren Jr. But he added that a 4 percent price slump "is not dramatic" and predicted declines for the year would remain modest.
 
Condominium sales also weakened further last month. There were 3,037 condo sales, down from 3,292 during the same period in 2005. The percentage drop -- 7.8 percent -- exceeded the house sales decline, though neither market saw the dramatic double-digit decreases experienced in April. The median condo price continued to rise last month, up 1.8 percent to $285,000.
 
So far this year, 11,638 condos have been sold, 5.5 percent fewer than during the same period last year.
 
Massachusetts's figures run counter to the overall US housing market, which is particularly strong in the South. New-home sales in the United States rose 4.6 percent in May, to an annual rate of 1.234 million, the Department of Commerce reported yesterday. Sales increases were between 3 and 6 percent in every region except the Northeast, where sales were off about 8 percent.

My move from Coldwell Banker to Zip Realty. Finally, I found a brokerage firm that doesn't restrict me from offering my clients the support they've always asked for. That is, cash-back for my buyer clients that amounts to 20% of the buyer side of the commission. On a $400,000 purchase, that is about $2,000. For my listing clients, they get 25% off the going commission rate for their area.

Zip is a national brokerage firm based in California with a branch office in Framingham. For listing clients, we get more buyer leads than anyone from the internet. Also, Zip will advertise your property as vigorously as any other firm.

Remember, there's only two factors that will sell your property. Location and price. So, if these two factors are intelligently thought out in the sale of your home, why not take advantage of the additional benefits that Zip offers.

Call me or write with any questions about Zip. Toll-free number is 800-225-5947 x5173.

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Below is the latest data on SOLD homes in Salem for all categories for the first half of 2006 and last quarter of 2005. These charts will be updated bi-annually going forward. Next issue will be in December for homes sold in your neighborhood during 2nd half of 2006.

If you click on the camera icons to the left of each entry, the entire listing sheet with additional photos (if available) will appear. The ultimate in convenience. These comparables are the best in Salem.

If you want information on a later sale, feel free to email me with an address of the sold property and I'll be happy to look it up for you.

 

1st Half of 2006

 

4th Quarter of 2005