How soft are the house prices, and where are they going? (Newton: 2009, to buy)

[clevedark]

I've been poring over the Hammond and Zip reality sites for four years now for houses in Brookline, not apartments (if I included apartments my brain would short circuit). I like Hammond because you can see what's under contract. I like Zip because you see the pricing history of the house and the last sale price if available. Very little is under contract.

I've seen prices drop on some really nice listings in my neighborhood up to 30% and they still haven't moved. These are homes that people would have tripped over themselves to buy two years ago. And I've seen some beautiful properties simply taken off the market.

And while you say the asking and selling percentage is over 95%, that is based on the last listing price, not the first one.

From where I sit, as a potential seller and buyer, the situation doesn't look good. I would hate like hell to have to sell my house now and take a bath, and I'd hate to buy a house and lose value over the next couple of years.

Of course I'd like to believe houses in Brookline are holding their value because it affects my pocketbook. But what I see is a very slow market and dropping prices. And I can't see how it getting any better over the next year with financial sector bonuses being cut in half.

[Meh1tabe1]

I was talking to a real estate agent recently, and asked him about prices in Cambridge. His experience was that prices hadn't declined much, however, houses are on the market for a significant time longer.

[arigold1975]

ohhh a "realtor"... You mean the same people who did not see this coming? To be fair there are hundreds of thousands of realtors and there are some really good ones out there. I have some extended family and acquaintances in that field and they thought I was nuts a few years ago when I said real estate was in for a big correction. I guess it would be hard to make money if you told people the property would be worth 15% - 30% less two years after they bought it and that they could be upside down in their mortgage. I find it interesting that we are looking to the same "experts" for the way out of this mess, banking, stock market, real estate etc., that did not see it coming or were stepping on the accelerator as we were hitting the wall.

[bugelrex]

My advice would be to ignore the realtors and simply do you own research:
- use redfin, mls, trulia, zillow
- find similiar houses within 1 or 2 miles of your target area and look at the CLOSED sales price
- take note of the price per square foot of living area, price per square foot of the land
- compare this to last year information

Once you have this info, you can tell pretty quickly if a house is overpriced.

[smarty]

Originally Posted by bugelrex

My advice would be to ignore the realtors and simply do you own research:
- use redfin, mls, trulia, zillow
- find similiar houses within 1 or 2 miles of your target area and look at the CLOSED sales price
- take note of the price per square foot of living area, price per square foot of the land
- compare this to last year information

Once you have this info, you can tell pretty quickly if a house is overpriced.

Just remember... those data are old... past performance is not a prediction of future performance....and you have no reference point... so u are just comparing the relative price in the same market...

There is a metric that I use to gage expensive... if the house price is higher than 15X yearly rental price... it is too expensive. The basis is rent tracks to income and so should housing prices. For example, I would not pay $600K for a place that could only rent out for $2500/mo.

[bugelrex]

Originally Posted by smarty

There is a metric that I use to gage expensive... if the house price is higher than 15X yearly rental price... it is too expensive. The basis is rent tracks to income and so should housing prices. For example, I would not pay $600K for a place that could only rent out for $2500/mo.

I agree with your pricing analysis, however unfortunately that is not the "current" reality (might be soon though..) but this doesn't help a buyer has might have to buy in the next few months (job relocation, personal/lifestyle reasons etc)..

Sales within the last 3 months should give a good gauge, but note that the world literally changed in October..


How is the job market in Boston area holding up BTW?

[catwings80]

Houses in desirable suburbs that are slightly more affordable with decent schools, like Arlington, are still selling on average within 28 days. They are selling well above their assessed values. But if you look in less desirable, less centrally located towns, prices have come down, or are sitting on the market for a long time. Commuting is a big issue. There are only so many towns within a short commute of downtown.

[jad79]

Selling in avg of 28 days, really? Care to provide a source for that? I see 67 single family homes for sale in Arlington, only 8 of which are pending. In neighboring Winchester, there are 104 single family homes for sale, only 9 of which are pending. Of the 104 homes for sale in Winchester, the median number of days on the market is 101 days. In Lexington, of 159 single family homes on the market, fewer than 20 are pending with median days on market for all for sales homes of over 100 days. Things are even worse when you get further out (Sudbury, Lynnfield, Wayland, etc.) Source: Redfin.

[jad79]

Here is another interesting fact about one high-end market (neighboring Winchester): Since October 15, 2008 there have been 58 single family homes listed for greater than $430k - only one of these homes is currently under agreement (1 Chester Street, listed at $579k - last sold for $588k in 2005). Obviously this excludes home the may have went under agreement right away and already closed (in the middle of winter and the financial collapse), but given how few homes closed in Winchester in Jan / Feb, this could not be many homes.

This is pretty incredible for a town with a median home price of $791k in 2008. Source Redfin - can anybody with access to MLS database find other pending homes that were listed after 10/15/08 for more than $430k?

[Valerie C]

I think it's pretty interesting (and not all that surprising) that Redfin's info is somewhat inaccurate... Currently there are 14 homes pending or active/contingent in Winchester. Of these 14, 3 are listed under 429K, and 11 are 429K or over. Also, 10 of the 14 pendings were listed after 10/15, while 4 were listed prior to 10/15.

FYI, there are currently 80 active listings in Winchester. 3 listings are priced under 425K, and 5 of the 80 are active/contingent (meaning they have accepted offers, but the offer has a contingency written in which needs to be resolved before the property can be sold).

I think it's interesting that in some cases, the pending property was only on the market for a matter of days before an offer was accepted:

3/2/2009 Listed for $1,325,000 -- 3/4/2009 Offer Accepted

1/4/2009 Listed for $1,199,000 -- 2/11/2009 price change to 1,179,000
2/23/2009 Offer Accepted

1/16/2009 Listed for$959,000 -- 2/5/2009 Offer Accepted

1/5/2009 Listed for $579,900 -- 1/30/2009 Offer Accepted

1/19/2009 Listed for $429,000 -- 2/5/2009 Offer Accepted

2/2/2009 Listed for $399,000 -- 2/6/2009 Offer Accepted

2/25/2009 Listed for $349,999 -- 2/27/2009 Offer Accepted

I just checked for home sales in Winchester.
Past 6 months=68 sales.
Past 3 months=28 sales
Last 30 days = 6 sales

December=14 closings (lowest price 464K)
January=9 closings

If you're looking for real and factual information, just ask a Realtor. Redfin only tells a little bit of the story

Originally Posted by jad79

Here is another interesting fact about one high-end market (neighboring Winchester): Since October 15, 2008 there have been 58 single family homes listed for greater than $430k - only one of these homes is currently under agreement (1 Chester Street, listed at $579k - last sold for $588k in 2005). Obviously this excludes home the may have went under agreement right away and already closed (in the middle of winter and the financial collapse), but given how few homes closed in Winchester in Jan / Feb, this could not be many homes.

This is pretty incredible for a town with a median home price of $791k in 2008. Source Redfin - can anybody with access to MLS database find other pending homes that were listed after 10/15/08 for more than $430k?