2021 Real Estate Observations (Boston, Lexington, Wellesley: top schools, relocate to, kitchen)

[id77]

Originally Posted by maclel

That is just not representative of this housing market. As another poster mentioned, there are 30% cash buyers and very very few put less than 20%. Most banks weren’t even giving out mortgages
that required PMI.

In the jumbo loan market (which most of these $800k+ towns will be now), PMI is a rarity as most lenders require 20% down.

[msRB311]

Yay Dedham

https://www.boston.com/news/local-ne...IN1aXFEIZsaSpM

Totally worth paying 1 million for a cape

[GeoffD]

Originally Posted by maclel

That is just not representative of this housing market. As another poster mentioned, there are 30% cash buyers and very very few put less than 20%. Most banks weren’t even giving out mortgages
that required PMI.

There also haven’t been all that many transactions since the market went totally nuts. With COVID-19 lockdown, nobody had buyers traipsing through their homes for that first year. If 30% to 35% of mortgages written in the last 2 1/2 years were less than 20% down, that’s only a couple percent of the housing stock. The housing market could correct 30% and there wouldn’t be that many people underwater on mortgages. Those who are are locked into 30 year fixed rate mortgages at really low rates so most will just ride it out. If we have sustained 7% inflation for a few years, salaries will align with housing prices.

[id77]

Originally Posted by GeoffD

There also haven’t been all that many transactions since the market went totally nuts. With COVID-19 lockdown, nobody had buyers traipsing through their homes for that first year. If 30% to 35% of mortgages written in the last 2 1/2 years were less than 20% down, that’s only a couple percent of the housing stock. The housing market could correct 30% and there wouldn’t be that many people underwater on mortgages. Those who are are locked into 30 year fixed rate mortgages at really low rates so most will just ride it out. If we have sustained 7% inflation for a few years, salaries will align with housing prices.

If inflation were to drive such a household to the point that the mortgage payment becomes uncomfortable (and that's a big if), the easy solution for most is to throw another wad of cash at the principal and recast the mortgage so the payment goes down to something comfortable.

[GeoffD]

Originally Posted by id77

In the jumbo loan market (which most of these $800k+ towns will be now), PMI is a rarity as most lenders require 20% down.

A conforming loan is up to $970,800 in high cost areas.

[GeoffD]

Originally Posted by id77

If inflation were to drive such a household to the point that the mortgage payment becomes uncomfortable (and that's a big if), the easy solution for most is to throw another wad of cash at the principal and recast the mortgage so the payment goes down to something comfortable.

I guess I wasn’t clear. If someone is underwater on a 30 year fixed rate mortgage at the low 2 1/2% to 3 1/2% rate, a few years of inflation will push prices back up as everyone gets salary increases. You can ride it out.

We have a mortgage on the Beaver Creek condo we bought 13 months ago. Worst case, we can rent it and be cash flow positive. I imagine there are a ton of people in metro Boston who have that option.

[id77]

Originally Posted by GeoffD

A conforming loan is up to $970,800 in high cost areas.

If it is, it's a very recent change. Even Dukes/Nantucket is showing a conforming limit of just over $822k, with everywhere else in the state under $730k. They certainly were when buyers of lower interest mortgages were closing.

https://findmywayhome.com/massachuse...limits-county/

EDIT: Here's some 2022 data for Middlesex county (one of the higher priced ones): https://www.ushousingdata.com/loan-l...esex-county-ma -- it's gone up a bit, but only Dukes/Nantucket are $970k. Definitely not the vast majority of the market we're discussing.

[WestieWhitie]

Originally Posted by msRB311

Yay Dedham

https://www.boston.com/news/local-ne...IN1aXFEIZsaSpM

Totally worth paying 1 million for a cape

All is well, happens everywhere, defundabolish, look that way, a bear!

[msRB311]

It doesn't happen everywhere...

[GeoffD]

Originally Posted by id77

If it is, it's a very recent change. Even Dukes/Nantucket is showing a conforming limit of just over $822k, with everywhere else in the state under $730k. They certainly were when buyers of lower interest mortgages were closing.

https://findmywayhome.com/massachuse...limits-county/

EDIT: Here's some 2022 data for Middlesex county (one of the higher priced ones): https://www.ushousingdata.com/loan-l...esex-county-ma -- it's gone up a bit, but only Dukes/Nantucket are $970k. Definitely not the vast majority of the market we're discussing.

The max jumped $100k in 2022. I hadn't looked at the Massachusetts counties. The five expensive metro Boston counties are $770,500. Dukes and Nantucket are the max $970,800.


The median listing price in Suffolk county was $779k for March. The other counties are a bit lower. So the majority of mortgages in metro Boston could qualify as low down payment conventional mortgages.