Hello!!! It feels so good to be writing my blog again. My transition to MGS Group is complete, and fantastic!!
THANK YOU to everyone for your incredible support and kind words over the last few weeks. I am so excited to open our Wellesley office, and can't wait to share the address soon.
We were right off to the races last week, putting 3 properties under agreement and launching a new listing today - with more to come.
So, let's talk about real estate in the Metro West! Hot, hot, hot- that's what I am seeing for the fall market. There aren't as many showings booked as there were in the spring, because there aren't as many buyers in the fall - which we have talked about.
Houses to buy are still scarce, which explains the impetus for bidding wars. Low inventory is still wreaking havoc in the market and houses are being swept up quickly. This is most apparent when they are priced realistically, and in great condition with tasteful updates and decor. Buyers who are the hungriest are moving aggressively, and writing strong offers in just a matter of hours into the process. It's hard to navigate for brokers and sellers alike. It can be overwhelming trying to decide when offers should be accepted. "Do we wait through the weekend, or take something now?" There is no easy answer to that question. My contacts in the southern part of the country, mostly North and South Carolina where I am a real estate investor, agree with me; they also report properties being swept off the market immediately in their regions.
Mortgage rates are creeping up, and are expected to do so throughout 2022. You can expect to see a 3.5% rate for a thirty-year fixed mortgage next year. The average 30-year fixed rate moved from 2.99% to 3.05% this month - its highest price point since April. Freddie Mac's chief economist said on October 14, inflationary pressure due to the pandemic and tightening monetary policy is what will push rates higher.
I think that this strong market is here to stay. The emotional punch that people feel when they walk into what they hope will be their forever home is priceless, and is one of the biggest drivers of this market. Houses are the backdrop to our lives, for better or worse. The pause from everyday life that we've experienced over the past two years has driven that notion home to us all. Our collective reaction to this has caused a housing burst like we have never seen.
If you haven't already checked in with me, please do! I want to make sure that I have your email since I changed addresses. I feel very reflective these last few weeks, and I am so incredibly thankful for my friends, clients, and family that make my life richer. Thank you!
As many of you know I am a former television journalist, so I am always looking at ANY headline with a healthy dose of skepticism. I don’t assume that they’re wrong, but I like to question everything to find the story behind the story.
When I see headline after headline about the market softening, I am skeptical, because my experiences here do not indicate a startling shift just yet. An adorable house in a very desirable Concord neighborhood was listed for $1,495,000 and created a frenzy of interest. With an offer deadline set for 4 days after it hit the market, there were 8 offers submitted. The house ended up going for almost 20% higher than the asking price. You can bet that there was not an inspection or financing contingency on that offer.
Other newly listed houses in the area are selling in a matter of hours if the broker is not holding offers off for a few days. You will notice that more houses for lingering than were sold last week. I continue to think it's more a symptom of the fall market, which is just slower and has less buyers. (Wayland was the exception- my hometown continues to impress with it's robust market!)
What we can't deny is that the mortgage rates are creeping up, and continue to do so as the news about the economy remains positive. This week an average 30-year fixed rate was 3.10% versus 3.03% just last week! This will put a dent in refinances - but we typically aren't terribly affected here by interest rates.
I am writing this week's blog from gorgeous Provincetown, Cape Cod. I love to follow the market on the Cape and of course love to check out houses for sale here. According to the Warren Group (a real estate watch group) -
Houses on Cape Cod have shot up an average of 30.2% since the first half of 2020!
In two years, prices rose an incredible 52% in Martha's Vineyard!
I look forward to apple picking this weekend with my clients! It will be good to connect with everyone! If I don't see you there, have an amazing week.
I know you have been waiting for this day to come… as of this week, I am reporting that the market is cooling down just a bit. Thanks to everyone for the steady stream of articles you’ve sent me saying just that! The National Association of Realtors (NAR) provided confirmation of this trend with their recent data report. That being said, I was in two bidding wars this week and our buyers were lucky enough to land one! Here we are at the inspection. The key here is strategic pricing; if you start at a reasonable figure, demand continues to drive the value up. Properties presented at the top of the price range tend to sit on the market longer and ultimately sell lower than the seller expected.
All of this considered, my personal observation is that buyer traffic has become less frantic than in recent months. NAR reports that last month the average number of offers per property decreased from 4.5 to 3.8 on a typical home. Of those taking the plunge and buying a house, only 29% of them are first-time homebuyers nationally. This group seems to have lost some of their motivation - they typically make up 40% of the market. But who can blame first-time buyers? Fatigue has set in after battling to win a house for so long!
Typically, low interest rates are enough to really incentivize buyers, and it's still a key ingredient to the frenzy we have seen - but it's not everything. Attractive interest rates don't help if someone has lost bidding war after bidding war. As I write this, the Federal Reserve released this announcement:
"In light of those expectations, the committee voted unanimously to keep short-term rates anchored near zero. However, a majority of members now see the first rate hike happening in 2022. In June, when members last released their economic projections, a slight majority put that increase into 2023."
If you ask me, I think a cooling down period is to be expected. Barring any crazy events happening in this world, a shift closer to normalcy isn't a bad thing. After all, this wild rush in real estate was brought about by a pandemic that shattered so many peoples’ worlds. If the population becomes healthier, calmer, and more well-rounded, then the real estate market will also recalibrate. This cool-down will allow more inventory to build, and anxious homebuyers to land the property they deserve.
We are two weeks or so into the fall market, and as far as I can tell there are still no signs that it is slowing down. Houses continue to go under contract just days after being presented. Realtors continue to report that buyers are taking aggressive strategies to snag a newly listed property, and they are seeing multiple offers on many of their listings. One new property in Wellesley had 5 pre-inspections, meaning potential buyers inspected the property before making an offer. Buyers typically do this so that they feel comfortable dropping the inspection contingency from their offer, in an effort to become a more attractive option when the seller decides who will get the house.
The fall buyer profile changes dramatically from the buyers we see in spring. Most families with school-age kids have already rushed to find their new homes in the first half of the year so they can be settled in for the start of the academic year. In the fall, the demographic of buyers tends to be people without that constraint. They are more free to move whenever it fits their timeline. While I was out at open houses over the weekend, I saw a steady stream of visitors at different properties. Truly no signs of this historic market slowing down yet.
This week's numbers demonstrate that inventory remains low in all towns throughout the MetroWest area. The number of houses on the market has increased slightly, edging towards 30 in some towns, but still not as robust compared to other years. If we don't get new houses on the market by year end to fill this void, the demand will be quite powerful after the holidays, and the cycle will continue. Good news for sellers and probably frustrating for househunters.
Just how how much are homes appreciating? Corelogic, which provides consumer information reports, found that home prices increased 18% year over year in July in the US. No states posted an annual decline in home prices. The areas with the highest increases year-over-year were Idaho (33.6%), Arizona (28.4%), and Utah (25.7%).
In my house we are dancing for joy over the fact that the kids are back to school! This simple routine brings us all so much happiness- the kids need that normalcy, and so do Mom and Dad. I hope the beginning of the season is a good one for you too! Have a great week!!
Hey sellers, let's get this party started! Buyers who are on the sidelines are ready to see some new listings. They are tired of getting lackluster alerts on their phone featuring very few new listings. What has come on continues to prove the theory that price matters.
A very interesting property with a big red barn in the back came on the market last week, at a very reasonable price. The house needed work, but was lovingly cared for. A dozen offers later it sold for about 17% over asking. So, when people ask if the frenzy has calmed down, the answer probably won't satisfy them.
For some properties there will always be a lot of interest. Also don't forget that bidding wars have always occurred in the real estate market, even before 2021.
As a real estate agent who works with investors, and is an investor herself, I am always keeping a watchful eye on the rental market as well. According to a Wall Street Journal article, rents for new leases on single family homes are up 13% over last year. For those who are renewing their stay, landlords have been more conservative by only hiking rents about 5%. Many of those who missed out on houses this year are turning to renting, so the demand is incredibly high.
What I do love about this time of year is watching all my clients move to their homes. Fall is such a great time to refresh so much in our lives, and what's better than creating the warmth of the season in your new home.
With kids back to school, fall in the air, and the promise of the market delivering for buyers, I am hopeful for a great fourth quarter!
Last week we took a hard look at the local real estate numbers- now, let's get an update on what is happening nationally.
According to the National Association of Realtors:
Existing home sales from June to July rose 2% nationally.
The year to year median in the US was up 17%
The market continues to be quite competitive in the lower price ranges and less of a frenzy in the upper tier of houses. There were very few houses nationally (comparatively speaking) under $500k. Simply put, that means properties that would have been priced below that threshold have now been pushed upward past the $500K mark.
Looking at the appreciation nationally, NAR lists Pittsfield, MA as being the TOP metro area in the US for price growth in the second quarter. Wow!! The median existing-home price soared 47% to $321,000 there. I have mentioned Pittsfield in past blogs too. If you are working from home, why not do it from the Berkshires?
Next week school starts, and then we are into Labor Day. After that our secondary real estate market begins. It's a whirlwind of a market that peaks around Halloween, and quiets down through the holidays. Most of the buyers in the fall are in-town trade-up buyers who are not affected by a school schedule, and empty nesters or young families coming from the city. It will be interesting to see how many listings come on during this time. This week's inventory numbers around our area demonstrate that the housing demand is still high, and inventory is historically low. So if you are still wondering, I absolutely recommend getting your house on and reaping the benefits of this amazing market.
Happy back to school, enjoy the end of summer and I'll be back next week!
Hot off the presses!! Finally, we have local numbers (courtesy of Pinnacle Residential Properties) that prove just how strong the first half of 2021 shaped up to be!
A close study of this chart of Wellesley helps us to unravel the full story of this historic market. If interested in data for surrounding towns, please email me!
Takeaways from the Wellesley Chart Comparing Sales in 2021-2020
Overall volume of sales was up about 17%
While there seems to be less homes for sale in the lower price ranges, it's actually a reflection of prices increasing
We saw an incredible upward push of houses into higher price ranges from $2M-$3M
Average days on market this year are 36 compared to 63 in 2020.
Median sales price jumped up 6%
Looking at the median sale price doesn't truly indicate how much prices have gone up. In order to determine that, we zoned in on houses that sold recently and then resold in 2021. These are properties without major renovations or additions, so the product is essentially the same as it was last time it sold. Here are a few samples in Wellesley:
Right now, there is a lot of hype about the market softening or stabilizing. At Pinnacle, we prefer to say that the market is "calming down" a bit, and rightfully so since on bright sunny days people are out on the beach enjoying nature, and not on their computers hunting for houses. Momentum will pick up after Labor Day with more inventory hitting the market. We are already seeing that trend with our listings!
Thinking of selling or curious how much your house has appreciated? Reach out and I am happy to help!!
What a week it has been! We brokered a multiple offer situation with nearly a dozen buyers all vying to call our listing theirs. People were creative in order to get this gorgeous home- dropping financial and inspection contingencies and tailoring their offer to the needs of the seller. It's what you have to do to get the house you want in the Metro West area- the story is played out all over the country.
This is what negotiating 11 offers looks like!
In states where they have a "due diligence" payment with an offer such as in Florida and North Carolina, buyers are offering the sellers sometimes incredible money to secure a house.. If you are not familiar with this process, this is nonrefundable cash given directly to the seller, that the seller keeps even if you the buyer doesn't follow through with the sale after the offer is accepted. On a $400K house some will give $75,000, just to get the property. This money helps ensure that the buyer will show up to the closing since there is a substantial amount of hard earned cash at stake. In Massachusetts all the deposits trading hands stays in an escrow account until the closing and the seller doesn't hold anything until the end. The binder that accompanies an offer has gone up in price in Massachusetts. Typically, it was a thousand dollars before the pandemic, now five to ten thousand dollars is a more common amount in a competitive situation.
While existing home sales continue to climb, permits being pulled for new builds has gone down. As we have been discussing, the supply chain is a major problem for builders and, in turn, homeowners. Contractors are even delaying closings on new houses for months because they just can't get the material they need to finish a job. Kitchen cabinets that were a wait time of 6 weeks are now at least 10 weeks out from the order to delivery dates; getting a part to fix your fridge or freezer is weeks out, and window blinds I ordered in July aren't expected to arrive until mid-October. According to a study out of Harvard University, home renovations are slowing down as a result of these long delays. Plus, in some cases people are putting out so much money to purchase a house, they don't have the cash to renovate right away and they have to put off project. Of course builders are having a hard time finding help as well which also slows them down.
Outside of houses, we are having fun as a family watching the Olympics and hope you are too. As the mother of a serious gymnast, I see the pressure these athletes take on and the commitment it takes to get to the top. From Simone to the rest of the team, we are continuously inspired by all the competitors. The Olympics once again shows how hard work, determination, and focus can get you where you want to be.
Have a good few weeks. I am taking a summer vacation next week and look forward to connecting after!!
This past week we saw fewer properties go under contract than in the recent past, but in my opinion this is really just a summer break. Even though mother nature tells us differently, it is summer, and many people are on vacation despite the rain.
While you may be reading this from your lounge chair at the beach, we have been busy! Our newest listing at 81 Parker Road Wellesley seems to be the "hot home" of the week with it's picture-perfect renovations and design, attractive price point, and lovely location. It has appealed to so many different buyers- especially those hoping to move from the city to the burbs. We have scheduled dozens of showings in just a few days.
I also continuously study other markets nationally to help look at the big picture. In the Raleigh, Durham, and Wilmington North Carolina markets which I know well, houses sell in literally hours or just a few days. This pattern is being played out all over the country of course. Think about the equity you have built into your home in this market - if you can sell and reap some of the benefits of this real estate frenzy, now is the time.
I found a great article on the future of the market this week put out by, of all organizations, Fannie Mae (the Federal National Mortgage Association). I am including this entire paragraph because the reporter shares with readers his prediction on demand and the future of housing prices. It's a measured view, and one that I agree with.
“While recent home price growth has been historically high, we’re forecasting further home price appreciation to moderate through the remainder of the year and into 2022,” said Mark Palim, Fannie Mae Vice President and Deputy Chief Economist. “On the supply side, we think homebuilders will be able to increase production as supply chain disruptions and labor shortages alleviate, which should add to the inventory of new and existing homes available for sale. On the demand side, we expect the increase in housing demand we saw over the past year to ease, as the impact of unique recent factors lessens, including adjustments to accommodate pandemic-related remote work arrangements, stimulus checks bolstering household savings, and record-low mortgage rates. However, demographic trends remain favorable for a strong housing market over the next few years, and, combined with the chronic undersupply of homes built over the last decade, upward pricing pressure is likely to remain through the forecast horizon – just not at the rate seen this spring. Nevertheless, we expect home price growth to become one of the more persistent drivers of inflation going forward, as other, more transitory factors diminish.”
Never before have we invested so much time and effort trying to predict the future the way that we have been the past year and a half. I suppose living a life with so many highs and lows across multiple sectors does that to you.